Few European companies complied with an early deadline to report their carbon-intensive imports, underscoring the challenge of EU efforts to tax CO2-laden products imported into the bloc from 2026.
The EU 's Carbon Border Adjustment Mechanism (CBAM) is the world's first attempt to impose a tax on carbon-intensive imports to prevent the bloc's industries from being undermined by a flood of cheap imports from countries with highly polluting industries. European industries are subject to strict climate regulation. and must pay for greenhouse gas pollution under the bloc's emissions trading system.
However, less than 10% of the 20,000 German companies expected to report emissions did so by the early deadline this year, according to data compiled by Germany's emissions trading authority and shared with the Financial Times.
Sweden's Environmental Protection Agency announced that 11% of the expected reports had been filed.
Ignorance of obligation
"We expect a much larger number of reports than we have received so far," Jürgen Landgrebe of Germany's federal environment agency UBA told the FT. "The most important reason is that most importers do not know about the obligation until now," he said, adding that this was not unexpected given that the process was still in a "transitional period".
Companies in seven sectors, including aluminium, steel, iron and fertilizers, had to submit emissions quantification reports of their imports by January 31, the first stage of a trial period that will run until 2026.
Businesses that fail to declare by mid-July will face a fine of €50 per tonne of carbon emissions.
Many in the industry fear that the bureaucracy involved will add to an already heavy administrative burden that exacerbates concerns that the bloc is losing competitiveness.
"There is a lot of confusion and uncertainty," Sarah Hay, director of climate policy at Norwegian aluminum producer Hydro, told the FT.
Increase in import costs
Citi analysts warned that EU countries "with a larger share of imports from Russia, Turkey, India and China in particular could see import costs for cement and lime, fertilisers, iron and steel and aluminum rise".
After extending the deadline by a month due to technical glitches, the European Commission said nearly 13,000 reports had been submitted by the end of February. The majority of reports concerned imports from China.
In its initial assessment of the levy in 2021, the Commission said it expected 239,000 import transactions to fall under the measure annually. A senior EU official said it was difficult to judge how many reports should have been submitted quarterly as estimates were only made on an annual basis.
EU officials downplayed the apparent reporting lag given the newness of the measure and said proposals to simplify the system would soon be made based on early feedback from companies.
"We need to ask the right questions so that our data becomes more accurate," one official stressed.
source: ot.gr