Businesses are bracing themselves for the impact of the world’s first carbon border tax, which will impose red tape that will cost millions for those importing into the EU as protectionist trade measures increase around the world.

The carbon border adjustment mechanism (CBAM), which enters a trial phase on October 1, will cost companies up to €27mn a year to administer, according to European Commission estimates laid out when the levy was first proposed.

But several companies and trade bodies have warned that the true cost is impossible to estimate given the extent of the paperwork required and changes to current contracts and procedures. Templates of reporting documents, seen by the Financial Times, include forms with 10 sections to fill in for each importer.