EU carbon border tariffs could knock $16bn off Africa’s yearly GDP

Concern is growing in South Africa and across Africa about the implications of the European Union’s (EU’s) decision to proceed with the implementation of a carbon border adjustment mechanism (CBAM) as a way of preventing so-called ‘carbon leakage’ by imposing a tariff on imports equivalent to the carbon prices being paid by European companies. In terms of an agreement reached in December, the CBAM will be implemented later this year and will initially cover the carbon-intensive sectors of iron and steel, cement, fertilisers, aluminium, electricity and hydrogen, as well as some precursors and a limited number of downstream products.