R27 billion in exports under threat

BUSINESS

About $1.5 billion (R27 billion) a year of South African steel, aluminium and iron exports to the eurozone are at risk after the EU introduced the Carbon Border Adjustment Mechanism (CBAM), a strategy for reaching the EU’s 2050 carbon emissions goal.

The CBAM, which was introduced to help EU industries decarbonise and prevent carbon leakages – a situation in which a company decides to move its production from a country with stringent policies to a country that is more lenient, leading to an increase in greenhouse gas emissions – will have far-reaching consequences on global trade and the wider energy transition.