R27 billion a year of South African exports are at risk after the European Union (EU) introduced the Carbon Border Adjustment Mechanism (CBAM).
As reported by City Press, the CBAM is a strategy for reaching the EU’s 2050 carbon emissions goal. It will impact South Africa’s steel, aluminium, iron, cement, fertiliser, electricity and hydrogen exports.
It is a border tax for carbon-intensive products imported into the EU, meaning that South African exporters will have to pay tariffs on carbon prices equivalent to EU manufacturers.
A policy brief by think-tank Trade & Industrial Policy Strategies said that iron and steel exports face significant risk, as about 26% in value of products that are included in the CBAM are exported to the EU.
Iron and steel exports covered the CBAM account for 4% of South Africa’s total exports in 2021. Click here to read full article