The UK Carbon Border Adjustment Mechanism (CBAM): 2024 updated guide for construction professionals

Recent policy developments

The Autumn Budget 2024 has significantly strengthened the government's commitment to green industries and decarbonisation. The extension of the Climate Change Agreement scheme until 2027 aligns with CBAM implementation, while a substantial £960 million green industry investment package demonstrates serious financial backing for the transition. The government has also taken steps to streamline planning processes for green energy projects, creating a more conducive environment for sustainable development.

Key features and implementation timeline

The UK CBAM distinguishes itself from similar international mechanisms through its broader scope and more comprehensive approach. Unlike its EU counterpart, the UK version includes ceramics and glass from the initial phase, alongside iron and steel products, cement and concrete materials, aluminium products, and fertilisers for landscaping applications. 

The implementation timeline for UK CBAM has been carefully structured to allow industry adaptation:

• 2024-2025: Consultation and detailed design phase.
• 2025-2026: System testing and industry preparation.
• 2027: Initial reporting requirements begin.
• 2028 onwards: Full carbon pricing mechanism activated.

Which materials will be impacted by UK CBAM?

Steel and iron products

The steel sector faces unique challenges under the UK CBAM, impacting products like structural sections, reinforcement bars, and fabricated assemblies. This regulation brings heightened scrutiny to production methods and supply chain practices, especially in two main areas:

1. Production process and emissions
   The distinction between production methods is crucial:
   • Electric Arc Furnace (EAF): Favoured for its energy efficiency and high recycled content, EAF production typically has a lower carbon footprint.
   • Basic Oxygen Furnace (BOF): Produces higher emissions, which pressures BOF operations to improve their energy efficiency and lower carbon output.
     
     
2. Procurement and supply chain optimisation
   Carbon costs related to surface treatments and transportation are now key factors in procurement decisions. To address these:
   • Manufacturers and suppliers are innovating in connection components and secondary steel elements to cut down on embodied carbon.
   • Emphasis is placed on streamlining production and delivery processes to minimise carbon throughout the supply chain, aligning with CBAM environmental targets.

Cement and concrete products

The cement and concrete sector faces transformative changes under the Carbon Border Adjustment Mechanism (CBAM), particularly in light of recent budget announcements supporting industrial decarbonisation. Manufacturers are expected to increasingly integrate carbon intensity measurement methodologies into their production processes, supported by new government funding for industrial energy efficiency. The recent budget's emphasis on green manufacturing has opened doors for cement producers to access support for decarbonisation initiatives, including hydrogen and CCUS technology adoption.

Mix design optimisation has become increasingly critical, with embodied carbon measurement and environmental product declaration (EPD) adoption increasing in procurement decisions. The government's enhanced support for energy-intensive industries is creating new opportunities for innovation in low-carbon concrete development, encouraging manufacturers to explore alternative materials and production methods.

Architectural elements and finishing materials

The inclusion of ceramics and glass from initial implementation sets the UK scheme apart from international counterparts. Recent policy developments have created a supportive environment for manufacturers in these sectors through comprehensive energy efficiency improvement funding and clean technology adoption support. Research and development incentives are driving innovation in production methods, while supply chain resilience programmes help ensure consistent material availability.

UK CBAM: Key action points for construction and manufacturing 

The implementation of CBAM in the UK requires strategic preparation from both construction professionals and manufacturers. The key to successful adaptation of CBAM lies in early planning, systematic implementation, and developing robust processes for carbon management.

For construction professionals:

1. Conduct a comprehensive supply chain audit to identify CBAM-affected materials and assess supplier readiness, focusing particularly on high-carbon materials such as steel, cement, glass, and ceramics.
2. Develop and integrate carbon tracking systems within existing procurement processes, ensuring they can capture and monitor carbon data throughout the project life-cycle.
3. Implement organisation-wide carbon literacy training programmes, ensuring teams understand CBAM requirements and can make informed decisions about material selection and sourcing.
4. Review and update specification templates to incorporate CBAM requirements, including carbon content limits, verification protocols, and alternative material options.
5. Establish strategic partnerships with suppliers who demonstrate clear commitment to carbon reduction and CBAM compliance through transparent standardised documentation of their environmental performance like EPDs, creating long-term relationships that support mutual adaptation to the new requirements.

For manufacturing professionals:

1. Audit current production processes to establish accurate carbon footprints, identifying major emission sources and opportunities for reduction across the manufacturing cycle.
2. Implement robust carbon data collection and verification systems that can provide accurate, timely information about product carbon content to meet CBAM reporting requirements.
3. Develop clear roadmaps for decarbonisation, including investment in energy-efficient technologies and exploration of low-carbon production methods.
4. Create comprehensive documentation systems for carbon content declaration, ensuring compliance with both UK and EU CBAM requirements if serving both markets. Environmental product declarations (EPDs) are standardised transparent documents that showcase your product’s environmental performance throughout its life. 
5. Invest in staff training and system upgrades to ensure the organisation can meet CBAM requirements while maintaining competitive advantage in the evolving market.

Conclusion

The UK CBAM, supported by recent budget announcements, represents a comprehensive approach to industrial decarbonisation and fair competition. The construction industry faces both challenges and opportunities in this evolving regulatory landscape. Preparedness for UK CBAM requires strategic preparation and a proactive approach toward carbon reduction.

How One Click LCA can help meet the requirements of UK CBAM