Scottish businesses have been warned to start collecting vital information on their carbon footprint with new legislation on the horizon. The Carbon Border Adjustment Mechanism (CBAM) comes into force on 1st January 2027.
“We are urging companies to begin data collection, supply-chain mapping, and emissions reporting preparations immediately, emphasising that professional guidance will be essential,” said Craig Stobo, a partner with Glasgow-based VITA.
The Glasgow-based firm stresses that companies which engage at an early stage to understand the major cost implications of the new tax, which came into force within the European Union on 1 January 2026, will lead the way and gain competitive advantage. The carbon tax system gets underway in the UK from 1 January 2027.
Stobo points out that companies will be forced to ensure that emissions data is provided and verified to avoid swingeing financial and potentially reputational penalties.
VITA, VAT & Indirect Tax Advisors, has launched a new service, the CBAM Compass which will provide user-friendly advice and explanation, set out in simple terms what CBAM is, the thinking behind it and how it will impact businesses.
Stobo, who advises UK and international firms on CBAM readiness, said: “The CBAM Compass is designed to alert companies to the potential impact of the EU and the UK’s wide-ranging initiative to drive decarbonisation and promote less carbon intensive manufacturing.
“It is intended to encourage a proactive approach to managing the new tax, which will keep evolving, with more sectors being brought into its scope and reporting requirements set to become more stringent.
CBAM is designed to put a price on the carbon emissions embedded in imported goods, initially targeting high-emission sectors such as steel, cement, and fertilisers. Its goal is to prevent ‘carbon leakage’ and create a level playing field by aligning costs for imports with existing EU carbon pricing.
The UK Government confirmed in its November 2025 Budget that it will press ahead with implementation of the new rules in 2027 but announced that the inclusion of indirect (Scope 2) emissions in the UK CBAM has been pushed back to 2029 or later.
“The exclusion of Scope 2 emissions will reduce the amount of CBAM payable by importers at a time when the UK carbon price is widely expected to rise sharply due to alignment with the EU trading system and the phase-out of free allowances.
“In the first sign that the scope of the UK CBAM could widen over time, the Budget also revealed that the Government is exploring the feasibility of adding refined oil and fuel products to the CBAM in future.”