Last week, the UK’s new Carbon Border Adjustment Mechanism (CBAM) introduced in Finance Bill 2025‑26 is set to become effective from 1 January 2027 and will have a significant ripple effect across logistics, manufacturing, and mobility sectors. In this article we outline how each sector will be impacted.
Published 10 December 2025
Manufacturing
1. Levelling the field for domestic producers
CBAM imposes a carbon-based tax on imports of aluminium, cement, fertiliser, hydrogen, and iron and steel – sectors with high carbon emissions. This ensures imported goods bear a carbon price comparable to the UK’s Emissions Trading Scheme (UK ETS), defending UK manufacturers from being undercut.
2. Incentivising supply chain decarbonisation
To minimise CBAM charges, manufacturers will increasingly seek low-carbon, traceable inputs. This shift fuels investment in cleaner technologies and tighter emission controls throughout supply chains.
3. Administrative complexity
Companies importing carbon-intensive materials must track and report embedded emissions, either using actual data or default values – adding reporting burdens and compliance costs.
Logistics
1. Cost pass-through and freight optimisation
Logistics providers will face elevated costs on carbon-intensive goods. Clients will likely demand transparency on embedded carbon, forcing logistics firms to optimise transport routes and improve efficiency to stay competitive.
2. Increased demand for data infrastructure
To comply with CBAM, importers must demonstrate carbon content. Logistics companies that implement emissions-tracking systems stand to benefit, creating a strategic opportunity to expand service offerings.
3. Reconfiguring global trade routes
Importers may favour lower-carbon suppliers or invest in partnerships across new geographies. Logistics networks will realign accordingly, affecting shipping patterns and potentially reshaping warehousing footprints.
Mobility
1. Fuel and freight emissions under scrutiny
Indirect emissions such as transport energy won’t be captured until 2029. However, mobility providers will be under pressure to improve efficiency ahead of this expansion and protect client relations.
2. Rise in low-carbon logistics services
CBAM underscores the value of low-carbon transport solutions, like electrification and modal shifts (e.g., rail, inland shipping). Providers offering carbon-efficient services will attract business from manufacturers keen to reduce overall CBAM liability.
3. Competitive advantage through sustainability
Early movers in emissions transparency and decarbonising vehicle fleets can position themselves as strategic partners to heavy industries seeking compliant, carbon-aware mobility solutions.
Holistic sector impacts and strategic implications
CBAM seeks to protect UK industrial competitiveness by preventing carbon leakage while driving decarbonisation across supply chains. It will phase in gradually, starting with direct emissions and adding indirect emissions after 2029, giving industries time to adapt. Levies will be tailored to sectoral UK ETS averages, adjusted quarterly, and offset by any carbon pricing at origin.
For businesses, this means manufacturers must enhance carbon transparency and invest in cleaner production, logistics firms should advance carbon-tracking and sustainable freight, and mobility providers can gain by accelerating low-carbon innovation and partnering with decarbonising supply chains.
Final thoughts
CBAM reshapes the commercial landscape by embedding carbon pricing into international trade. For manufacturing, it reinforces the case for local, low-carbon competitiveness. In logistics, visibility into carbon flows becomes central to value propositions. For mobility, the shift towards sustainable transport is not just environmental - it’s commercial.
Companies across these sectors should start preparing by upgrading data systems, decarbonising operations, and rethinking supply chains, to turn regulation into strategic advantage by 2027.