Aluminium industry warns UK firms are running out of time to prepare for carbon border tax

ALFED has issued an urgent briefing to Government setting out key concerns from the UK aluminium industry around the implementation of the UK Carbon Border Adjustment Mechanism (CBAM) ahead of its planned introduction in January 2027.

The briefing has been shared with relevant officials across HM Treasury, HMRC, the Department for Business, Innovation, Science and Trade (BIST) and wider Government, as ALFED calls for greater clarity and sufficient time for businesses to prepare.

While ALFED and its members support the principle of a UK CBAM that protects domestic industry from carbon leakage and helps create a level playing field, the Federation is warning that significant practical questions remain unresolved as the implementation deadline moves closer.

What remains unresolved ahead of the 2027 launch

Key areas requiring clarity include default emissions values, verification and accreditation arrangements, recognition of carbon costs paid overseas, sector -specific technical guidance and the relationship between CBAM and wider UK -EU ETS discussions.

The briefing has been informed by discussions through ALFED’s Trade Committee and the experiences of members already navigating the EU CBAM regime.

ALFED Chief Executive Nadine Bloxsome said: “Our members understand the rationale behind CBAM and the importance of addressing carbon leakage but businesses need certainty if they are going to prepare properly.

“January 2027 is getting increasingly close, and there are still important questions around how the UK scheme will work in practice. Experience from the EU has shown just how challenging implementation can become when methodologies, systems and guidance are finalised too close to the point at which businesses are expected to comply.

“Our message to Government is therefore very straightforward: industry needs clarity, practical guidance and sufficient lead time. We want to work constructively with Government to help get this right but that engagement needs to happen now.”

Industry seeks a clear implementation roadmap

ALFED is calling for Government to provide a clear implementation roadmap and proposed default emissions values, alongside greater certainty around verification and accreditation, treatment of overseas carbon costs and sector -specific technical requirements. The Federation is also seeking continued technical engagement between Government and affected industries as implementation progresses.

The organisation is now encouraging businesses from across the UK aluminium value chain to continue sharing their experiences, questions and concerns so that these can be fed directly into Government discussions.

Uncertainty complicates commercial planning

Rachel Wiffen, Industry & Skills Development Manager for ALFED, said: “ALFED’s call for greater clarity reflects concerns being felt across the wider manufacturing community. While industry supports measures to address carbon leakage and promote fair competition, businesses require sufficient time to adapt systems, engage suppliers and understand compliance obligations.

“Greater certainty around the potential cost impacts of CBAM is critical for commercial planning and the pricing of future contracts. With January 2027 fast approaching, a clear implementation roadmap is urgently needed, alongside ongoing technical engagement, to ensure the UK CBAM is both effective and workable.”

ALFED will continue its engagement with Government in the coming months and is urging policymakers to provide the certainty required for businesses to prepare effectively ahead of January 2027.