EU's carbon adjustment rules enter enforcement phase

For African exporters this is also a competitiveness test

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EU's new rules will enforce cleaner production globally.

The EU’s Carbon Border Adjustment Mechanism (CBAM) became fully operational on January 1, marking a shift in how carbon costs are applied to global trade.

After a two-year transitional phase focused on emissions reporting, CBAM has begun enforcing financial obligations on imports of carbon-intensive goods entering the EU.

At its core, CBAM is designed to prevent “carbon leakage”, which is essentially the relocation of emissions-heavy production outside the EU to avoid climate regulation, while also encouraging cleaner industrial production globally. But it is also emerging as one of the most consequential trade and climate policies affecting exporters in developing economies.

CBAM applies to six major product categories, including cement, iron and steel, aluminium, fertilisers, hydrogen and electricity. These sectors were selected because of their high emissions intensity and exposure to international trade.