South Africa faces potential export challenges with EU's carbon border adjustment mechanism

AS THE European Commission (EC) gears up to launch plans for a Carbon Border Adjustment Mechanism (CBAM) in early 2026, South African industries are left contemplating the potential ramifications of this new regulatory framework.

- BANELE GININDZA

Affecting key sectors such as aluminium, steel, fertilizers, electrical energy, hydrogen, and cement, the proposed measures aim to mitigate risks of carbon leakage while promoting a low-carbon economy.

The EC announced on Thursday that it was actively working on proposals to support producers in sectors identified as vulnerable to carbon leakage.

Acknowledging the environmental challenges posed by differing climate policies globally, the Commission is keen to ensure that substantial carbon emissions do not simply shift from the European Union (EU) to nations with less stringent regulations.