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To work out your Carbon Price Relief, you’ll need to:

• work out the effective carbon price
• work out the Carbon Price Relief
• convert the Carbon Price Relief figure

Before you start

Before you calculate your relief,Ìýyou’llÌýneed to check:ÌýÌý

• if your CBAM goods have been subject to a qualifying carbon pricing schemeÌý

• you have a completed carbon pricing verification form that’s independently verified for one of the two calendar years prior to the calendar year in which the CBAM good was imported

• you have the publicly available information you need to calculate your Carbon Price ReliefÌý

Work out the effective carbon priceÌý

FollowÌýtheÌýcalculationÌýstepsÌýto work out the effective carbon price.ÌýDo not include the following in your calculations:Ìý

• emissions subject to greenhouse gas removals with no public priceÌý

• emissions subject to free allowances or thresholdsÌýas theyÌýhaveÌýnoÌýpriceÌý

• any compensation,ÌýrefundsÌýor rebates,Ìýas this is done afterwards

Calculation steps

1. FindÌýthe total installation emissions (tCO2e)ÌýonÌýthe carbon pricing verification form.ÌýYou must check this figure was recorded forÌýone of the two calendar yearsÌýprior to theÌýcalendar year in which theÌýCBAMÌýgood was imported.

2. Identify the number of those emissions in ‘Step 1’ that were subject to different elements of the qualifying carbon pricing scheme, as listed on the carbon pricing verification form.

3. Multiply the emissions subject to each element of the qualifying carbon pricing scheme by the price per tCO2e for each element. For emissions subject to a headline carbon price, greenhouse gas removals or graduate carbon price, the price should be publicly available, from the previous calendar quarter, and where not fixed must be mean average over this period. Add together the resulting figures for each of the relevant elements.

4. Divide the totalled figure in ‘Step 3’ by the total installation emissions that you found in ‘Step 1’. This gives you the effective carbon price.

If there’s compensation

If the installation has received or is due to receive compensation in the same calendar year as the emissions in ‘Step 1’ÌýandÌýit’sÌýlisted in the same carbon pricing verification form,Ìýyou need to adjust the effective carbon price by:Ìý

• dividing the compensation by the total installation emissions from ‘Step 1’Ìý

• subtractingÌýthis from the effective carbon price worked out in ‘Step 4’

This net figure is now the effective carbon price.

For an example where compensation is received or due, read section ‘Example of compensation’.

Example of working out the effective carbon price

The following is an example of an effective carbon price calculation. This example may not apply to every CBAM import.

Example of compensation

The following example will explain how to calculate the effective carbon price if compensation is due in the same calendar year as the emissions.

Work out the Carbon Price ReliefÌý

You’ll need to multiply together the:

• effective carbon price — the amount you’ve worked out in the calculation steps
• embodied emissions subject to a qualifying carbon pricing scheme — the amount of emissions that rate applies to

Do this for each CBAM good you wish to claim relief for. This includesÌýwhere a CBAM goodÌýwasÌýused in manufacture and processing of another CBAM good.Ìý

If your Carbon Price Relief figure is in a foreign currency, you must convert it to sterling (GBP) so you can subtract it from your CBAM tax liability.

Convert your Carbon Price Relief figureÌý

If you do not convert theÌýCarbon PriceÌýReliefÌýfigureÌýinto sterling (GBP), you will not be able toÌýclaim the relief, and you’ll need to pay your full CBAM tax liability.Ìý

You must use exchange ratesÌýwe’ll publish to convert your Carbon Price Relief into sterling (GBP).

The exchange rates will be published from 1 January 2027Ìýand be made available at the beginning of the quarter for which they will apply. Ìý

You must check and use the exchange rate for the calendar quarter prior to the point of import.Ìý

The calendar quarters are:Ìý

• 1 January up to and including 31 MarchÌý

• 1 April up to and including 30 JuneÌý

• 1 July up to and including 30 SeptemberÌý

• 1 October up to and including 31 DecemberÌý

Example

Where a CBAM goodÌýwasÌýsubject to multiple carbon prices in different jurisdictions, including carbon prices on precursor emissions, the correct exchange rate for each currency must be used.Ìý

Following conversion, youÌýmust round down to two decimal places.

The total relief claimed cannot exceed the amount of CBAM liability due.Ìý