ATAF, in partnership with the University of Pretoria, has released a new technical note analysing the European Union Carbon Border Adjustment Mechanism (CBAM) and its potential implications for African exports. The publication provides ATAF member countries with practical insights on how emerging climate-related trade measures may affect export competitiveness, tax policy, and industrial transformation across the continent.
The European Union introduced the CBAM as part of its climate policy framework aimed at reducing carbon leakage by ensuring that imported goods face a carbon cost comparable to that applied to domestic production within the EU. The mechanism entered a transitional phase in October 2023 and moved into its definitive implementation phase in January 2026, requiring importers of certain products to purchase CBAM certificates reflecting the carbon emissions embedded in those goods.
The technical note highlights that although Africa contributes only about 3–4% of global greenhouse gas emissions, many African economies remain exposed to the economic consequences of carbon border policies because of their reliance on exports to the European market. The EU currently absorbs roughly one-third of Africa’s exports in sectors covered by the CBAM, including iron and steel, aluminium, cement, fertilisers, hydrogen and electricity.
Exposure across African economies
The analysis shows that exposure to the CBAM varies significantly across African countries depending on their export structure, energy mix and industrial profile. Some economies face immediate risks due to their dependence on carbon-intensive exports to the EU, while others may see growing exposure as the scope of the mechanism expands to additional sectors in the coming years.
Countries such as Mozambique, South Africa, Morocco and Egypt already face notable exposure through exports of aluminium, steel and fertilisers. However, the technical note also points to potential opportunities for countries with cleaner energy systems or ongoing decarbonisation strategies. For example, producers using renewable energy sources may gain a competitive advantage as global carbon pricing becomes more widespread.
Policy challenges and strategic choices
The technical note emphasises that responding to the CBAM requires governments to navigate complex policy trade-offs involving climate policy, industrial competitiveness and domestic revenue mobilisation.
African countries face several interconnected challenges, including ensuring fair treatment in global climate policies, maintaining the competitiveness of export-oriented industries, and mobilising resources to support industrial transformation. Carbon pricing mechanisms, such as carbon taxes, are highlighted as one of the potential tools that can simultaneously support emission reduction and generate domestic revenue if designed effectively.
At the same time, governments must strengthen measuring, reporting and verification (MRV) systems, improve emissions data collection, and coordinate policy responses across ministries responsible for finance, trade, environment, energy and taxation.
A critical role for tax administrations
The technical note underscores the important role tax administrations can play in helping countries respond to carbon border adjustment measures. With their expertise in data management, revenue collection and compliance monitoring, tax authorities are well positioned to support the design and administration of carbon pricing instruments and ensure accurate reporting of emissions-related information.
Tax administrations can contribute by mapping firms exporting CBAM-covered goods, assessing potential carbon pricing liabilities, developing reporting frameworks for emissions data, and coordinating with environmental authorities to ensure credible verification systems.
Supporting ATAF member countries
Through this publication, ATAF aims to support member countries in understanding the evolving relationship between climate policy, international trade and taxation. The technical note outlines strategic response options for governments, highlights institutional coordination requirements, and identifies areas where policy reforms and capacity building may be required.
ATAF will continue providing technical support to member countries on issues related to carbon taxation, environmental tax policy, and institutional capacity building, including technical training, peer-learning initiatives and policy dialogue platforms.
Download the Technical Note on the European Union Carbon Border Adjustment Mechanism and the Implications for African Exports – Strategic Options for ATAF Member Countries here.
