CBAM and
African Exports

Since 1 January 2026, EU importers of steel, aluminium, cement, fertilisers, hydrogen and electricity have owed a carbon price on the emissions embedded in what they buy. The bill lands in Europe. The data it runs on comes from the factories that made the goods, many of them in Africa.

The EU's Carbon Border Adjustment Mechanism (CBAM) is the first EU climate rule that turns a supplier's emissions data directly into its customer's cost. This guide explains how it works now, what it means for African exporters, and what both sides of the trade should be doing before the first payments fall due in 2027.

01: How CBAM works now

Reporting has become paying

CBAM ran as a reporting-only exercise from October 2023 to the end of 2025. Its definitive period began on 1 January 2026.¹ An EU importer now has to buy CBAM certificates to cover the emissions embedded in the covered goods it brings in, priced against the EU Emissions Trading System (ETS).

Source: European Commission CBAM Q&A.¹

02: Who is caught

A 50-tonne threshold, and a licence to import

A 2025 simplification, Regulation (EU) 2025/2083, in force since 20 October 2025, introduced a single threshold: 50 tonnes net mass per importer per year.² Below it, an importer of iron and steel, aluminium, cement or fertilisers has no CBAM obligations. Above it, the whole year's imports are covered. Hydrogen and electricity get no exemption.¹

The Commission aims to keep at least 99% of embedded emissions in scope, so the threshold exempts many small importers but very little carbon. Splitting shipments to stay under it is prohibited.²

Importers above the threshold must be authorised CBAM declarants, approved by their national authority. Customs will not release covered goods to an importer who is not.¹ For an African exporter, that makes CBAM readiness part of whether a European customer can take delivery at all.

03: What it means for African exporters

Steel, ferro-alloys and aluminium carry the exposure

Covered goods include iron and steel products, aluminium, cement, fertilisers, hydrogen and electricity.¹ Within iron and steel, the covered list includes key South African ferro-alloys: ferrochrome, ferromanganese and ferronickel.

Wesgro, the Western Cape's trade and investment agency, estimates that about R43.4 billion of South Africa's 2023 exports to the EU fell under CBAM: R30.79 billion of iron and steel and R12.58 billion of aluminium. That is around 2.13% of all South African exports, but heavily concentrated. The EU took nearly 31% of South Africa's aluminium exports.³

In May 2026 South Africa's trade minister, Parks Tau, warned that steel and automotive exports will suffer unless they are produced in low-carbon facilities.⁴

04: The data your EU buyer will need

Actual verified emissions, or penalising defaults

Embedded emissions can be declared in two ways: actual emissions from the producing installation, verified by an accredited verifier, or the Commission's default values, set per product code and per country.¹

Default values carry a mark-up that rises each year: 10% in 2026, 20% in 2027 and 30% from 2028 (1% for fertilisers).^{1, 5} A producer that performs better than its country default, and can prove it, saves its customer money. A producer that cannot will be priced at the default plus the mark-up.

• Direct emissions are declared for every covered good.
• Indirect emissions from electricity are added only for cement, fertilisers and agglomerated iron ore. Iron, steel and aluminium are declared on direct emissions only.¹
• Verification needs a site visit in the first year, then at least every two years.⁶ Verifiers have been able to register with EU national authorities since 1 September 2026.²

05: Does South Africa's carbon tax count?

Partly, and only what is actually paid

An importer can deduct a carbon price "effectively paid" in the country of origin. Rebates and free allowances reduce the amount that counts.¹ In May 2026 the Commission published a draft implementing act on how to calculate this. It recognises carbon taxes, but requires exemptions and allowances to be netted off, and the carbon price paid to be certified by an independent party.⁷

South Africa's carbon tax is the kind of price CBAM recognises. But its allowances, including the basic allowance and the trade-exposure, performance and offset allowances, reduce the tax effectively paid, and so reduce the deduction. Exporters should expect to document exactly what they paid per tonne, and should not assume the full headline rate will be credited.

06: What is coming next

Downstream products, from 2028

In December 2025 the Commission proposed extending CBAM to about 180 steel- and aluminium-intensive downstream products from 1 January 2028, with new anti-circumvention powers.⁸ EU governments agreed their position in June 2026 and Parliament has proposed a wider list.⁹ None of it is law yet, but manufacturers of components and finished metal goods exporting to Europe should watch it closely.

07: What to do now

For exporters and for their European buyers

If you export covered goods to the EU:

• Measure emissions at installation level, by product, using the CBAM methodology rather than a corporate footprint.
• Engage an accredited verifier early. The first visit must be on site.
• Document the carbon tax you actually pay per tonne, net of allowances.
• Find out which of your EU customers are authorised declarants, and what they need from you, by when.

If you import from African producers:

• Confirm you hold, or have applied for, authorised declarant status.
• Ask suppliers for verified actual emissions now; default values get more expensive every year.
• Budget for certificates from February 2027, and for the 50% quarterly holding requirement.

This article reflects the CBAM rules as published at 7 October 2026. It is general guidance, not legal or tax advice. The rules on deducting carbon prices paid abroad, and the downstream extension, were still being finalised at the time of writing.