First experiences with CBAM from selected African countries

The European Union’s Carbon Border Adjustment Mechanism (CBAM), which entered into force on 1st January 2026, marks a fundamental shift in the relationship between climate policy and international trade. By requiring goods that are imported into the EU to bear carbon costs comparable to those incurred by EU producers, CBAM seeks to prevent carbon leakage and promote global decarbonization. However, its implementation presents significant challenges for African economies, whose climate mitigation approaches, industrial structures, and development priorities differ substantially from those of other continents. In addition, the EU is a crucial trading partner for most African economies, given its geographic proximity and economic strength.

Against this backdrop, the Multinational Development Policy Dialogue (MDPD) of the Konrad-Adenauer-Stiftung (KAS) in Brussels cooperated with the TradeExperettes to bring together the analyses of CBAM on various African countries into one publication.

The studies demonstrate that the implications of CBAM extend well beyond direct carbon pricing and affect African economies through multiple channels, such as production costs, export competitiveness, value-chain participation, and institutional readiness. While the mechanism creates incentives for cleaner production and improved emissions monitoring, it also risks imposing disproportionate adjustment costs on developing countries in Africa that rely on carbon-intensive production, limited technological capacity, and evolving regulatory systems.

The Zambia case illustrates that climate mitigation can take forms other than explicit carbon taxes or emissions trading systems. Several Zambian institutions collectively support environmental regulation, certification, accreditation, and Monitoring, Reporting and Verification (MRV). Nevertheless, these context-specific interventions remain largely unrecognised within CBAM's emissions accounting framework, creating the risk that existing mitigation efforts will be overlooked while increasing compliance burdens, particularly for Small and Medium-sized Enterprise’s and vulnerable exporters.

The Uganda analysis highlights the economic trade-offs associated with CBAM-equivalent carbon pricing. Modelling systems indicate that carbon pricing on cement, iron and steel, aluminium, and fertiliser production would reduce carbon emissions, but simultaneously increase production costs and lower industrial competitiveness, effectively reducing the country’s GDP. These findings demonstrate that decarbonization policies must be accompanied by measures that support industrial productivity and development objectives. Investments in cleaner technologies, renewable energy, carbon accounting, emissions reporting, and verification systems are therefore essential to improve compliance while maintaining competitiveness.

South Africa's experience illustrates the commercial risks posed by CBAM for carbon-intensive exporters. Heavy reliance on coal-based energy increases the carbon intensity of exports such as iron, steel, and aluminum, exposing these sectors to higher adjustment costs in EU markets. While trade diversification offers one possible response, it is costly and should remain a secondary strategy. Greater emphasis should instead be placed on strengthening domestic demand, expanding regional integration, deepening trade with emerging markets, improving industrial competitiveness, and preventing domestic carbon leakage while preparing for an increasing global adoption of border carbon adjustments.

Overall, the findings underscore the need for a more inclusive and context-sensitive approach to climate-trade governance. Recognizing diverse climate mitigation pathways, strengthening MRV systems, supporting institutional capacity, promoting low-carbon industrial transformation, and providing targeted financial and technical assistance to developing economies will be essential to ensure that CBAM contributes to global decarbonization without undermining trade, industrial development, and sustainable economic growth across Africa.