Border Carbon Adjustments: What risk for South African exporters?

This policy brief analyzes the potential economic risks to South African exporters if the United States and European Union implement Border Carbon Adjustments (BCAs). Using 2009 trade data and a hypothetical carbon price of US$20/tonne, the report estimates significant annual charges for South African exports, particularly in the non-ferrous metals and iron and steel sectors.

• South Africa is highly vulnerable to BCA regimes as proposed in the U.S. America Clean Energy and Security Act (ACESA), because it does not meet the criteria for country-level exemptions, such as being a least-developed country or having binding emissions targets as stringent as those of the U.S.
• Under a hypothetical EU BCA regime, South Africa would face annual charges of approximately €380 million across 71 product categories, representing €5.4 billion in trade. The highest payments would come from iron and steel producers (€104 million), gold (€89 million), platinum (€80 million), and coal (€68 million).
• Under a hypothetical U.S. BCA regime based on ACESA, South Africa would face annual charges of US$210 million across 13 product categories, representing US$2.4 billion in trade. The non-ferrous metals sector (primarily gold and platinum) would make the highest payment at US$159 million.
• The iron and steel and non-ferrous metals sectors are the most exposed, with covered goods representing 21.3% and 27.3% of their total exports, respectively. Other sectors with significant exposure include paper, pulp and print (12%), chemical and petrochemical (11.8%), and textile and leather (11.2%).
• The report suggests that South Africa could avoid BCA charges by signing sectoral emissions reduction agreements with the U.S. and EU. Acceptable measures to demonstrate effort could include a carbon tax, a cap-and-trade scheme, sectoral caps, or a green purchase obligation linking exporters to green power production.
• While South Africa could challenge BCAs through the World Trade Organization (WTO), the report warns that such a process would take years to resolve and the outcome is uncertain, meaning exporters would still face penalties in the interim.

APA

Cosbey, A., & Wooders, P. (2011). Border Carbon Adjustments: What risk for South African exporters? International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/tri_cc_border_carbon.pdf

Chicago

Cosbey, Aaron, and Peter Wooders. Border Carbon Adjustments: What risk for South African exporters? International Institute for Sustainable Development, 2011. https://www.iisd.org/system/files/publications/tri_cc_border_carbon.pdf.

Wikipedia

{{cite report |last1=Cosbey |first1=Aaron |last2=Wooders |first2=Peter |title=Border Carbon Adjustments: What risk for South African exporters? |publisher=International Institute for Sustainable Development |date=August 2011 |url=https://www.iisd.org/system/files/publications/tri_cc_border_carbon.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{cosbey2011border, author = {Cosbey, Aaron and Wooders, Peter}, title = {{Border Carbon Adjustments: What risk for South African exporters?}}, institution = {International Institute for Sustainable Development}, year = {2011}, month = aug, url = {https://www.iisd.org/system/files/publications/tri_cc_border_carbon.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }