• EU’s CBAM to charge €65–85/t CO₂ on imports of steel, aluminum, cement, fertilizers, power, hydrogen.
• Africa may lose $27B exports yearly; key sectors hit: Mozambique aluminum, South Africa steel, Morocco & Egypt fertilizers.
• Carbon taxes could retain $28B for Africa, but MRV costs 0.5–1.5% GDP; EU keeps revenues if not recognized.

The Carbon Border Adjustment Mechanism (CBAM), in a transitional phase since October 2023 and scheduled for full implementation in 2026, applies a carbon levy on imports of carbon-intensive products such as steel, aluminum, cement, fertilizers, electricity, and hydrogen. Designed to reduce carbon leakage, it aligns the carbon price paid by foreign exporters with that borne by European industrial producers under the EU Emissions Trading System (ETS).

The CBAM is part of the European Green Deal, which targets a 55% reduction in greenhouse gas emissions by 2030 compared with 1990 levels. According to European market data, the average price of carbon under the ETS ranged between €65 and €85 per ton in 2024. Eurostat reported that in the same year, around 38% of extra-EU imports in the targeted sectors originated from countries without an equivalent carbon pricing mechanism.

According to UNCTAD estimates, exports from Africa to the European Union represented about 34% of the continent’s total exports in 2024. Within this share, several CBAM-covered products remain significant: aluminum exports from Mozambique accounted for approximately 68% of that country’s total exports in 2024; South Africa exported an estimated USD 5.7 billion of iron and steel products to the EU; Moroccan fertilizer exports to the EU reached USD 2.5 billion; and Egyptian exports reached USD 2 billion. Research by the London School of Economics projected that African export losses could amount to USD 27 billion annually if the CBAM is extended to all industrial sectors.

On emissions, Africa produced about 1.5 billion tons of CO₂ in 2024, equivalent to 4% of the global total, according to the Global Carbon Atlas. Per capita emissions stood at 0.9 tons, compared with 6.5 tons in the European Union and 14.7 tons in the United States. These figures highlight the gap between Africa’s low contribution to global emissions and the potential costs it may face under CBAM rules.

Several African countries have introduced or explored domestic carbon taxes. South Africa has applied a carbon tax since 2019, set at approximately €8 per ton in 2024, significantly below the EU benchmark of €65–85 per ton. Nigeria, Ghana, and Kenya announced feasibility studies in 2023 to assess similar mechanisms. At the continental level, the African Continental Free Trade Area (AfCFTA) convened a ministerial session in 2024, calling for a coordinated position on the CBAM and exemptions for the 33 African countries classified by the United Nations as Least Developed Countries (LDCs).

Building the measurement, reporting, and verification (MRV) systems required to comply with European standards carries substantial costs. A World Bank study (2022) estimated that implementing such systems could represent between 0.5% and 1.5% of GDP for developing countries during the initial years. According to OECD estimates, applying a national carbon tax of €50 per ton would reduce GDP by 0.5% to 1% in the short term in Africa’s most industrialized economies but could generate up to USD 28 billion in fiscal revenues if adopted across the continent.

The South African Institute of International Affairs (SAIIA) has underlined that unless African efforts are recognized as equivalent by the EU, CBAM revenues would be collected entirely by European authorities, reducing potential fiscal receipts for African states. At the same time, the European Commission projects that CBAM will cover around 2% of total EU emissions once fully implemented, suggesting a limited impact on global emissions but a direct effect on trade flows.

Looking ahead to 2030, the European Commission estimates that CBAM could generate between €10 and €15 billion annually in revenues. For African economies, the policy implications are twofold: either absorb the additional costs, thereby reducing export competitiveness, or establish national carbon pricing mechanisms to retain at least part of the fiscal proceeds domestically. Several reports, including those from UNCTAD and SAIIA, identify a coordinated continental strategy—linking taxation, negotiation, and industrial policy—as the most viable approach to mitigate economic losses, secure climate finance, and channel investments toward low-emission industrialization.

Idriss Linge