The EU’s carbon border mechanism has been in use since October 1, 2023. Importers of imported products are obliged to report information on the emission content of the products covered by the mechanism, both in terms of direct and indirect emissions. The reporting challenges for many companies are significant.
This study evaluates the administrative costs of companies related to the mechanism, makes observations about changes in international trade, and considers alternative implementation methods for the mechanism. The costs incurred by the mechanism for companies are poorly known, and new information can help to more efficiently share the administrative burden between the public and private sectors. International trade data shows how reporting costs and anticipation of the mechanism’s payment phase have already affected the market. This research also considers the wider effects of the mechanism and offers alternatives for its implementation.
