European Union’s measure to encourage countries where it sources imports to adopt cleaner manufacturing, Carbon Border Adjustment Mechanism (CBAM), may create bottlenecks for Africa’s export to Europe considering the imposition of a carbon tax.

The CBAM which goes into force on a transitional basis in October introduces a carbon tax on exports to the EU and the measure is already eliciting major concerns in Africa which sees Europe as a major export market.

A member of the European Parliament from the Netherlands, Mohammed Chahim in a statement released by the parliament, had said: “CBAM will be a crucial pillar of European climate policies. It is one of the only mechanisms we have to incentivize our trading partners to decarbonize their manufacturing industry”.

The CBAM is aimed at promoting the importation of only products from hard-to-abate sectors that meet high climate standards and serves to protect EU companies that are meeting such standards while encouraging trading partners to make efforts to reduce emissions.

A study carried out by the African Climate Foundation and the London School of Economics suggests that the CBAM’s economic repercussions will be ‘far-reaching’ and most strongly felt in Africa.

Their modelling based on €87 per ton suggests that the CBAM would lead to around $25 billion in losses based on 2021 GDP levels, nearly four times higher than what the EU gave to Africa in development assistance in 2021.

According to United Nations Economic Commission for Africa, African producers who want to export into Europe will need to prove the emissions of their products even without CBAM, and even if there is no legal basis (requirement?) for pricing imports from Africa, the carbon footprint still becomes important for marketing reasons