EU’s CBAM: Africa could lose up to €25b per annum as a direct result

The document highlights the potential negative economic consequences of the EU's Carbon Border Adjustment Mechanism (CBAM) on Africa, particularly for least developed countries (LDCs). It warns of significant GDP and export losses, administrative barriers to market access, and a lack of concrete EU financial commitments to help African manufacturing industries decarbonize.

• The CBAM is expected to negatively impact the competitiveness of African exports and create administrative hurdles for market access, especially if the range of covered products expands.
• The CBAM will begin on 1 October 2023 with a three-year transition period for emissions reporting, followed by a gradual phase-in from 2026 to 2034, initially covering electricity, hydrogen, fertiliser, aluminium, cement, and iron and steel.
• In a hypothetical scenario where CBAM applies to all imported products, 11 African least developed countries (LDCs) could see GDP declines between 1.5% and 8.4%. Across Africa, such a scenario would reduce total exports to the EU by 5.72% and lower GDP by 1.12%, which equals €31 billion based on 2021 levels.
• Specific export sectors from Africa to the EU could see declines: aluminium by up to 13.9%, iron and steel by 8.2%, fertiliser by 3.9%, and cement by 3.1%.
• The EU decided against exempting LDCs and vulnerable economies from CBAM. While the European Parliament suggested providing financial support to LDCs for decarbonizing manufacturing industries equivalent to CBAM certificate revenues, the EU has instead committed these revenues to its own Innovation Fund.

APA

African Climate Foundation (2023). EU’s CBAM: Africa could lose up to €25b per annum as a direct result. https://africanclimatefoundation.org/blog/eus-cbam-africa-could-lose-up-to-25b-per-annum-as-a-direct-result/

Chicago

African Climate Foundation. EU’s CBAM: Africa could lose up to €25b per annum as a direct result. 2023. https://africanclimatefoundation.org/blog/eus-cbam-africa-could-lose-up-to-25b-per-annum-as-a-direct-result/.

Wikipedia

{{cite report |author=African Climate Foundation |title=EU’s CBAM: Africa could lose up to €25b per annum as a direct result |date=9 May 2023 |url=https://africanclimatefoundation.org/blog/eus-cbam-africa-could-lose-up-to-25b-per-annum-as-a-direct-result/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{africanclimatefoundation2023eus, author = {{African Climate Foundation}}, title = {{EU’s CBAM: Africa could lose up to €25b per annum as a direct result}}, institution = {African Climate Foundation}, year = {2023}, month = may, url = {https://africanclimatefoundation.org/blog/eus-cbam-africa-could-lose-up-to-25b-per-annum-as-a-direct-result/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }