Europe’s tool to tax imported pollution faces teething pains
Europe’s tool to tax pollution linked to goods made abroad underline the challenges of motivating companies worldwide to go greener.
Slow communication and technical difficulties have held up businesses’ compliance with the European Union’s new Carbon Border Adjustment Mechanism, which is designed to protect local producers against competition from countries with lower environmental standards. In Germany, less than 10% of companies have registered to the platform as of Feb. 28, according to people familiar with the matter.
Given the issues, the European Commission extended its deadline to submit reports for a second time — until the end of March — in an announcement made to member states this week, said the people, who asked not to be named as the details are private.
While the tool aims to level the playing field for domestic manufacturers of energy-intensive goods like cement and steel, it’s the latest example of energy transition policies adding layers of bureaucracy for companies. Officials want to prevent higher pollution outside the bloc as a result of the EU’s stricter climate change mitigation policies, but are facing growing pains to get the system up and running.
Software problems already led to a one-month delay of an earlier Jan. 31 deadline for importers to register for the mechanism. In Germany, where much of Europe’s manufacturing takes place, the authority in charge of implementing the new tool was only announced at the end of last year, giving firms a short notice to sign up.
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