Can and should African Article 6 Credits be CBAM eligible?

The report argues that allowing African exporters to use Article 6 carbon credits to reduce their EU CBAM liabilities would address equity concerns, retain climate finance within Africa, and provide policy flexibility. It notes that current CBAM regulations only permit deductions for explicit carbon prices (taxes or ETS), making Article 6 credits ineligible. The document highlights the significant economic risks CBAM poses to African GDP and the specific challenges African nations face in implementing traditional carbon pricing due to their emissions profiles and administrative constraints. It concludes with recommendations for the EU to amend its regulations to include high-integrity international credits, specifically those from Least Developed Countries (LDCs) and Africa, to align with the principle of Common but Differentiated Responsibilities and Respective Capabilities (CBDR-RC).

• The EU's CBAM is expected to have a significant negative economic impact on Africa; one model suggests it could reduce the continent's GDP by -0.91%, which is approximately a $25-billion reduction based on 2021 levels.
• Current CBAM regulations exclude Article 6 credits because they define a 'carbon price' strictly as a monetary amount paid under a scheme in the form of a tax, levy, or emission allowance under an ETS.
• African countries face unique challenges in implementing standard carbon pricing because their emissions are primarily linked to land use and agriculture, which are difficult to estimate and tax compared to formalized fuels.
• In South Africa, the CBAM may inadvertently undermine the domestic carbon market because exporters may choose to pay a higher local carbon tax rather than use offset allowances to maximize their CBAM deductions in the EU.
• Permitting Article 6 credits under CBAM would allow African governments to retain climate finance domestically and provide them with greater policy freedom to determine their own mitigation measures.
• The EU is unlikely to permit international credits within the CBAM or EU ETS in the near future, as it has previously disallowed them due to concerns over environmental integrity and market liquidity, and has already earmarked CBAM revenues for its own 2028-2034 budget.
• To ensure integrity and prevent leakage, the report recommends that any inclusion of credits be limited to high-standard sources, such as the Article 6.4 mechanism, and that deductions be linked to the actual price paid for the credit rather than the volume of GHGs offset.

APA

African Future Policies Hub (2025). Can and should African Article 6 Credits be CBAM eligible? https://img1.wsimg.com/blobby/go/b2d05cc3-7b8c-4f0d-a62a-66af7434f28f/downloads/e6b3b06f-22bf-4841-adcc-bb697153d2b2/AFPH%20Article%206%20and%20the%20CBAM%20-%20report%20v2.2.pdf?ver=1780902965923

Chicago

African Future Policies Hub. Can and should African Article 6 Credits be CBAM eligible? 2025. https://img1.wsimg.com/blobby/go/b2d05cc3-7b8c-4f0d-a62a-66af7434f28f/downloads/e6b3b06f-22bf-4841-adcc-bb697153d2b2/AFPH%20Article%206%20and%20the%20CBAM%20-%20report%20v2.2.pdf?ver=1780902965923.

Wikipedia

{{cite report |author=African Future Policies Hub |title=Can and should African Article 6 Credits be CBAM eligible? |date=August 2025 |url=https://img1.wsimg.com/blobby/go/b2d05cc3-7b8c-4f0d-a62a-66af7434f28f/downloads/e6b3b06f-22bf-4841-adcc-bb697153d2b2/AFPH%20Article%206%20and%20the%20CBAM%20-%20report%20v2.2.pdf?ver=1780902965923 |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{africanfuturepolicieshub2025can, author = {{African Future Policies Hub}}, title = {{Can and should African Article 6 Credits be CBAM eligible?}}, institution = {African Future Policies Hub}, year = {2025}, month = aug, url = {https://img1.wsimg.com/blobby/go/b2d05cc3-7b8c-4f0d-a62a-66af7434f28f/downloads/e6b3b06f-22bf-4841-adcc-bb697153d2b2/AFPH%20Article%206%20and%20the%20CBAM%20-%20report%20v2.2.pdf?ver=1780902965923}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }