Jason Gordon: “For Turkish producers, data quality is the real opportunity under UK CBAM”

“The producer’s obligation will be commercial, not legal”

What obligations will steel producers and exporters face when supplying the UK from 2027, and what will be the biggest challenges?

It is necessary to clearly state exactly where the legal obligation lies: the registration and declaration obligation under UK CBAM belongs directly to the UK importer, not to the overseas producer or exporter. However, this does not mean that producers will not be affected; quite the opposite. The importer’s obligation is calculated based on the embedded emissions of the products brought into the country. If the producer cannot provide verified data, HMRC will instead apply the default value determined based on the highest emissions intensity for the sector.

In practice, this means that even if an undocumented supplier’s product has the same price as that of a documented supplier, the undocumented supplier’s product will become more expensive at the UK border. Therefore, the obligation faced by producers is not a legal obligation, but a commercial obligation. However, this obligation is real and will begin to affect which suppliers buyers in the UK prefer to purchase from.

The information that importers in the UK will need from producers will be as follows: the identity of the specific production facility, not only the commercial intermediary; emissions intensity per tonne to five decimal places under the regulation; whether the figure in question is an actual measured value or a default value; and, where necessary, the precursor materials used and their own embedded emissions.

The biggest practical challenge is timing. Properly collecting verified emissions data from a facility overseas generally takes eight to twelve weeks. The correct facility needs to be identified, the data request submitted, the response followed up and the data obtained verified.

HMRC has confirmed that the UK CBAM registration service will not open until early 2028. The first accounting period covers the entire 2027 calendar year, and the declaration will be submitted several months later. However, the fundamental obligation and record-keeping requirement begin when an importer exceeds the threshold, not from the date when the paperwork can be submitted, but from the moment the obligation arises.

This gap between “the obligation exists” and “the system to be used to comply with this obligation exists” is the biggest source of confusion I have encountered. For this reason, the data collection process has already started much earlier than most producers think.

The second important challenge is verification itself. HMRC has now published the accreditation standards that a verifier must meet, but it has not yet published a regular and comprehensive list of individually approved verifiers. If producers delay starting discussions with an accreditation body while waiting for this list, they may find themselves at the end of a long waiting queue when requests from UK importers actually begin.

“Neither side of the supply chain is sufficiently prepared”

How prepared are steel producers and UK importers? What should companies do now?

In general, they are not sufficiently prepared, and I would say that this applies not only to one side, but to both sides of the supply chain. A significant part of the public discussion, including among steel importers themselves, is still focused on whether the regulation is a good idea. However, the real issue should be how to comply with the regulation in practice. This is an understandable reaction to genuinely complex and still evolving legislation. However, this situation is causing actual data collection efforts to start later than they should.

For a UK importer, the most critical step is to trace the supply chain not only to the direct supplier or trader, but all the way to the specific production facility. The obligation is linked to the facility where the products are actually produced, and particularly when products pass through intermediaries or are shipped through a third country, answering this question can be more difficult than people expect.

For the producer or exporter, the priority is to be prepared before the data request arrives. When a UK customer formally requests verified emissions data, the eight-to-twelve-week period already becomes a determining factor in the customer’s own compliance schedule. A producer that can respond within two weeks rather than eight becomes a much more commercially attractive supplier, regardless of its price.

Both sides need to be realistic early on about Carbon Price Relief. This is a genuine mechanism, but it depends not only on whether such a system exists in the relevant country, but on whether a carbon price has actually been paid at the specific production facility. Assuming that the reduction will be available and finding out shortly before the declaration date that it is not applicable would be an avoidable mistake.

“Verified emissions data will change supplier preferences”

How do you expect UK CBAM to affect global steel trade and supply chains?

I would describe this as a reasoned expectation rather than a certain outcome, because the system is still evolving. However, the direction seems quite clear. The mechanism does not change which products need to be made or how they need to be produced. A product requiring a specific production method will still require the same production method. What changes is which supplier producing the same product to the same specifications will become cheaper at the UK border.

This creates a real incentive for buyers to prioritise suppliers that can provide verified and facility-specific emissions data over suppliers that cannot or do not want to provide it. The reason is not that the products of the latter group are of lower quality; rather, the lack of data means that they are priced by default using the sector’s highest emissions value, and once a declaration has been submitted using default values, this cannot be corrected retrospectively.

Over time, I expect this to become a genuine commercial advantage for facilities that invest early in emissions measurement, verification readiness and rapid responses to data requests. In contrast, facilities that view CBAM merely as a compliance cost that should be resisted or ignored may find themselves at a disadvantage.

I also expect some supply chains to become shorter or more transparent. The main reason for this is that, under CBAM, tracing products through multiple intermediaries all the way to the actual production facility is more difficult than it was previously. This traceability requirement itself may encourage some buyers to move towards more direct supply relationships.

“For Turkish producers, the real opportunity is not carbon relief but data quality”

Which areas should Turkish steel producers and exporters prioritise, and where is the competitive advantage?

I want to speak openly here rather than diplomatically, because I think it is more useful for Turkish producers to see an accurate picture rather than an encouraging one.

Türkiye’s own emissions trading system is currently in the pilot phase, and the free allocation rate in trade-exposed sectors, including steel, is quite high. This is a genuine government-run system. However, under the UK CBAM Carbon Price Relief rules, the reduction depends not only on whether such a system exists in a country, but on the carbon price actually paid at the relevant facility. Since the allocation is effectively free during this pilot period, the reduction currently available to most Turkish steel exporters is close to zero. I would prefer to say this clearly now rather than have a producer find this out after spending time on the wrong paperwork.

For this reason, what really matters for Turkish producers is not Carbon Price Relief, but the emissions data itself. HMRC’s default values are determined based on the highest-emitting production route in the sector. A Turkish facility that can prove, through verified and facility-specific data, an emissions intensity genuinely lower than the default value will have a direct and measurable commercial advantage over a facility that cannot prove it, entirely independently of the carbon pricing issue.

I would prioritise three areas. First, companies should become familiar with the accreditation standards published by HMRC in July 2026. These include GACI membership as well as the relevant ISO and IEC standards. Rather than waiting for a list of pre-approved verifiers, companies should start discussions with an accreditation body now.

Second, data on production routes and emissions intensity should be made regular and measurable at facility level. This will allow a UK customer’s request to be answered within weeks rather than months. This ability to respond quickly is itself a competitive advantage.

Third, developments in Türkiye’s own emissions trading system should be closely monitored. Free allocation is expected to decline over time. A producer that measures and verifies its emissions now will be in a much stronger position if a real carbon cost begins to apply.

In short, the opportunity is not currently in the carbon pricing debate. The opportunity lies in being the facility that can prove a better emissions value than the default while most competitors still cannot.