CBAM and Africa: A Turning Point for Climate-Conscious Trade
CBAM Weekly – Issue 65
Omnibus Reform
On 30 September 2025, the European Union adopted far-reaching reforms of the Carbon Border Adjustment Mechanism. The aim is not only to simplify administrative processes for European importers but also to strengthen the core principle of the mechanism: the CO₂ content of imported goods should continue to be priced in line with the European Emissions Trading System. The revised regulation introduces a new threshold of 50 tonnes per year. Smaller importers will thus be exempt from extensive reporting obligations, while around 99 percent of embedded emissions in EU imports will still be covered. For European SMEs, this represents significant relief. For many African exporters, however-particularly in CO₂-intensive sectors such as steel, cement or fertilizers-this measure marks a fundamental shift. Access to the EU market is increasingly determined by carbon intensity rather than the monetary value of goods.
New Pressure on Trade Between Africa and Europe
The European Union remains a key export market for African industrial products, with trade volumes exceeding €150 billion annually. The reform now increases the pressure for a climate-friendly transformation of African industry. In countries such as South Africa, Morocco or Egypt, industrial production still relies heavily on fossil fuels. Without investments in low-emission technologies, export losses and rising costs from CBAM certificates are looming. South Africa’s steel exports to the EU amounted to over USD 1.3 billion in 2024. Due to the coal-dependent power grid, CO₂ emissions per tonne of steel are high-and so is the CBAM burden. Morocco’s fertilizer sector and Egypt’s cement and aluminum industries face similar challenges. Without robust emissions data and cleaner production processes, access to the EU market will become increasingly difficult.
Green Opportunity or New Barrier?
At the same time, CBAM also creates opportunities. The mechanism sets a price signal that can incentivize investments in renewable energy, low-emission production, and green logistics. Kenya already benefits from an electricity mix that is over 90 percent renewable. Namibia is pursuing a national hydrogen strategy. In Morocco, industrial solar zones are being developed. These examples show that early movers can secure strategic competitive advantages. However, political voices from Africa are warning of the risks. The AfCFTA Secretariats are calling for concrete support to build CO₂ measurement systems, certification processes, and regional emissions trading markets. Without this infrastructure, CBAM may, in their view, act less as a climate instrument and more as a trade regulatory measure, placing a disproportionate burden on developing countries.
Outlook: Transition, Not Exclusion
The EU has introduced new transitional measures to ensure a smooth start to the regular phase from January 2026. These include, among other things, preliminary authorizations for importers and revised guidelines for emissions calculation. The success of CBAM will depend crucially on whether climate goals can be combined with fair trade and global development cooperation. African governments and companies must now act quickly to integrate sustainability into trade and industrial policy. At the same time, the EU must complement CBAM with targeted financial and technical support for partner countries. Only then can the mechanism become a shared tool for global climate protection.
Support in Implementation
If you need support in strategically assessing CBAM’s impact on your supply chain or in setting up emissions data systems, please feel free to contact us directly at helge@kolum.earth.