Is UK-made steel inside our product exempt from the UK CBAM?
It is left out. HMRC's UK CBAM guidance exempts the emissions in precursor goods produced in the UK, so they do not enter your product's figure. You must give your verifier evidence that the precursor was made in the UK, and the verifier confirms the exemption was applied correctly and is evidenced.
How the exemption works
A precursor is a CBAM good used to make another CBAM good, such as billet rolled into bar. Normally its embodied emissions are added to your figure. Where the precursor was produced in the UK, those emissions do not need to be included. The legal basis is section 147(3) of the Finance Act 2026.
What your verifier will ask for
- Evidence that the precursor goods were produced in the UK, for example the supplier's mill certificate naming the UK mill, with matching purchase invoices.
- The quantity of UK-made precursor used in each production process, kept separate from precursor bought elsewhere.
- Your calculation showing those tonnes were left out.
On the importer's side
Your UK buyer must keep records of evidence of UK origin provided for goods exported and then reimported inside a complex good. Send them the same evidence your verifier saw.
Bars rolled from mixed billets
- Billets used in the year: 6,000 t from a UK mill, 4,000 t from an Indian mill at 2.20000 tCO2e/t.
- Precursor emissions counted: 4,000 x 2.20000 = 8,800 tCO2e. The UK billets add nothing.
- Rolling emissions: 500 tCO2e. Bars produced: 9,600 t.
- Emissions intensity: (8,800 + 500) / 9,600 = 0.96875 tCO2e/t.
Example figures, not HMRC defaults.
What Senseible does here
Senseible reads billet and coil purchase invoices by supplier, so UK-made and other precursor tonnes stay on separate lines. We build the figure from your records and check every figure in-house; for the UK it must then be verified by a verifier accredited for UK CBAM. Have your own verifier? Send it to them.
Sources: HMRC, Carbon Border Adjustment Mechanism (CBAM): Policy summary (updated 2 November 2026), HMRC, UK CBAM monitoring, reporting and verification technical guidance (October 2026)
Last reviewed 2026-11-03.