Concerns Raised Over Potential Impact on African Producers and Global Emissions Reduction
A new report by the European Council on Foreign Relations (ECFR) warns that the European Union’s proposed carbon-border adjustment mechanism (CBAM) could inadvertently sabotage global efforts to limit global heating to 1.5°C or 2°C. The CBAM, which would require importers of energy-intensive goods to pay for the environmental damage they cause, could drive African producers to sell their goods in markets with lower environmental standards, the thinktank argues.
The plan, championed by France, mandates that companies importing goods such as iron, steel, aluminium, fertiliser, cement, and electricity into the EU purchase carbon certificates equivalent to the carbon prices faced by European producers under the EU’s emissions trading system. While the measure is intended to prevent “carbon leakage,” where European manufacturers lose out to competitors from countries with lower green standards, it could have unintended consequences.
The ECFR highlights that while countries like China, Russia, and Ukraine will be financially hit hardest, African nations could be disproportionately affected. Countries such as Mozambique, Guinea, and Zambia, which rely on industries like aluminium and steel production, may find their markets shrinking as a result of the levy.
Although the ECFR supports the border levy to tackle carbon leakage, it recommends that the EU consider redistributing CBAM revenues to the low-income countries most affected by the policy.
