South Africa has voiced its concerns over the European Union's plan to implement a carbon border adjustment mechanism (CBAM) on imported goods, arguing that it unfairly places the burden of climate action on developing nations. The CBAM, set to be implemented from October, could pose a significant risk to South Africa's annual exports, amounting to $1.5 billion. As a country heavily reliant on coal for over 80% of its power generation, South Africa fears the adverse impact the CBAM could have on its industries and economy.
While South Africa acknowledges the need to transition to renewable energy sources, it faces challenges in acquiring the necessary financing and managing the impact on workers in the coal industry. The nation's major exports, including coal, platinum, and gold, heavily depend on electricity generated from fossil fuels. Even its manufactured exports, such as cars, rely on coal-derived power. Consequently, South Africa argues that the CBAM overlooks the historical legacy imposed on the country and places unjust burdens on its industries.
South Africa ranks 14th globally in terms of greenhouse gas emissions, and the government reaffirms its commitment to transitioning to cleaner energy and reducing emissions. However, it contends that the EU's CBAM policy is unfair, protectionist, and counterproductive, as it imposes climate mitigation policies on developing nations. Rather than driving climate ambition, South Africa argues that the measure could hinder its ability to achieve its climate objectives.
Moreover, South Africa asserts that the EU's CBAM would disproportionately favor exports from wealthier countries, exacerbating inequality, poverty, and unemployment in developing nations like itself. Other countries, including China and India, have also expressed concerns about the EU's plans, while a Cameroonian aluminum refinery has requested assistance to reduce its emissions.
While the EU argues that the CBAM aligns with international trade rules as an environmental measure, aimed at preventing the outsourcing of emissions as the bloc adopts stricter climate policies, South Africa remains unconvinced. The country warns that the CBAM's proposed reciprocal exemptions for leading industrial nations would violate World Trade Organization non-discrimination rules.
South Africa emphasizes the need to consider historical responsibility for environmental degradation and the ability to address the climate crisis as moral and practical imperatives. The country believes that the EU's CBAM fails to respect these principles, leading to an imbalance in the global response to climate change.