SA Inc should drive its climate ambitions through low-carbon green industrialisation

The global climate agenda has entered a decisive decade. The April 2022, flooding in KwaZulu-Natal overwhelmed economic and social infrastructure and forced Toyota's Prospecton assembly plant to halt production for four months. That kind of disruption is exactly the kind which manufacturing firms face firsthand, and a crude awakening on the what the hard knock of climate impacts on production can and are becoming.

- DAVID JARVIS

The impact affected production lines and logistics routes but also disrupted suppliers across and into the province, demonstrating how physical risks cascade through industrial ecosystems. Similarly, the 2023/24, drought cut national maize yields by roughly 15%, affecting agro-processing and food exports. From agriculture to automotive, the message is clear: climate resilience is now a pillar of economic competitiveness. Building adaptive infrastructure and climate-proof logistics, has to be integral to South Africa’ re-industrialisation agenda.

Across the world, climate strategy has become industrial strategy. Major economies are aligning trade, technology, and climate policy through ambitious industrial packages.

The question is no longer based ona false dichotomy of growth versus industrialisation, but how to decarbonise competitively, preserving industrial capacity, jobs, and market access for trade while building the foundations for a new wave of green growth.

For developing economies, these shifts bring both opportunity and pressure. The EU’s Carbon Border Adjustment Mechanism (CBAM), which begins full implementation in 2026, will apj carbon tariffs to imports of steel, aluminium, cement, and fertilisers. South Africa's CBAM-exposed exports exceed €1.1 billion (R22bn), or about 5% of total exports.

Unless exporters reduce carbon intensity in their products, they risk higher costs, reduced demand, and longterm market erosion, for example, the 2029 list of export products that will be liable for Carbon Border Adjustment Mechanism (CBAM) will be expanded to include much of what SA exports to the EU, requiring exporters to plan for the eventual effect.

Technological Risk: Staying Ahead of a Moving Frontier