The Financial Times reports that participation in the transitional phase of the European Union’s Carbon Border Adjustment Mechanism, which places import duties on carbon-intensive products including aluminium, steel, iron and fertilisers, has been below expectations to date. In Germany, less than 10% of the 20,000 importing companies expected to report the carbon emissions associated with products had reported by the end of January, while in Sweden the number was around 11% of the expected number.

The reasons are various – some companies are thought to be unaware of the requirement, while others may have found little incentive to report by the end of January, with a month extension having been granted and an automatic fine not to come into effect until mid-July. The European Commission said that 13,000 reports had been received by the end of February, which can be compared to the expectation in 2021 that 239,000 companies would report.

It may also reveal, however, a frustration with the administrative burden of reporting, and the Commission is apparently working on simplifying the system.