Recent revisions to the European Union’s Carbon Border Adjustment Mechanism (CBAM) are expected to have a major impact on African exporters, especially those in high-emission sectors. The latest updates, introduced last month, now account for indirect emissions — those stemming from electricity used during manufacturing processes. This development presents significant hurdles for countries such as South Africa, where the power grid relies heavily on coal. Under the CBAM, originally launched in 2021, non-EU producers must report their emissions and purchase certificates that align with the EU's carbon pricing. With these extended rules gradually taking effect, carbon-reliant industries in Africa are at risk. South African economist Seutame Maimele has cautioned that local infrastructure for reducing greenhouse gas emissions remains underdeveloped, estimating that at least five years are needed for firms to adequately adapt.
In addition to expanding the emission categories covered, the amendments refine the application thresholds, excluding smaller EU importers while placing greater compliance demands on larger ones. Despite this differentiation, African exporters are still likely to bear increased costs, potentially resulting in a $25 billion GDP loss across the continent as carbon-intensive goods become less competitive in the EU market. Although African governments have requested exemptions or delays, the current changes offer no short-term concessions. To navigate these new requirements, exporters are urged to begin monitoring their emissions, collaborate with their supply chains, and pursue cleaner energy investments to secure continued access to European markets.
To help businesses navigate these challenges, CBAM Reports provides support with calculating
embedded emissions, preparing CBAM reports in
XML format, validating data, and ensuring seamless import into the CBAM registry. Contact CBAM Reports today for tailored assistance in achieving CBAM compliance efficiently.
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