The European Union’s Carbon Border Adjustment Mechanism (CBAM) has gone from being an administrative promise to a financial charge. And now, Africa faces a major challenge – the continent accounts for only about 4% of global greenhouse gas emissions, but hosts some of the industrial sectors most exposed to the new European regime.
According to estimates of the African Development Bank, the products covered by CBAM represent a small share of total African trade, but they hit specific countries and sectors with disproportionate severity: aluminum and steel producers in North Africa, which are strongly linked to the European market; and economies like Mozambique, whose Mozal foundry exports practically all of its aluminum production to Europe. South Africa, the continent’s most industrialized economy and heavily dependent on coal-fired electricity, is perhaps the most emblematic case: its own central bank has estimated that the current version of the CBAM could reduce total exports to the EU by around 4% by 2030, a blow already weighing on steelmakers.
There is one complaint of substance running through this debate – and it is not just technical: Africa has not been heard. Economists at the United Nations Economic Commission for Africa have been clear that the continent did not participate in the design of the mechanism, was not consulted on its implementation, and saw European climate policy effectively transformed into trade and industrial policy with direct effects on its own industrialization ambitions.
In recent international forums, including COP30, countries as diverse as China, India, Japan, and Saudi Arabia have joined African voices in classifying CBAM as unilateral and potentially incompatible with the World Trade Organization’s non-discriminatory trade principles. South Africa has already signaled, through its trade minister, that a formal complaint to the WTO remains on the table if the negotiation process is exhausted. It is tempting, in the face of this, to reduce the African response to a binary choice between resignation and confrontation. But neither serves the interests of the continent. Resignation means accepting that nascent industrial sectors are suffocated by a carbon bill calculated according to European parameters, without any distinction between a country that deliberately chose not to decarbonize and one whose electricity grid still depends on coal due to a structural lack of alternatives.
Pure confrontation risks leading to years of WTO litigation – a slow process by nature — without African industries preparing themselves for the world ahead, regardless of the legal outcome. The most sensible answer is threefold, and it is also the most difficult: to challenge, to propose, and to adapt at the same time. Contesting means using all available diplomatic and legal avenues — the credible threat of WTO litigation, coordinated pressure through the African Union, the strategic leverage provided by Africa’s critical minerals, essential to the European energy transition itself, give an advantage to the continent at an increasingly fragmented negotiating table. Proposing this means not just criticizing but presenting a concrete reform agenda: differentiated treatment for developing countries, exemptions for low-carbon products manufactured in Africa, and above all, the return to the continent of the revenues that CBAM itself generates at its expense, to finance precisely the energy transition that the mechanism claims to want to encourage.
And adapting means acting now, without waiting for the outcome of any negotiations. Here lies perhaps the most underappreciated idea in this whole discussion: some African countries can turn an apparent weakness into a source of revenue of their own. If Mozambique introduced an internal carbon tax calibrated to European levels, it could retain internally the approximately €78 million annually that Mozal would otherwise pay to Brussels — capital that could finance the country’s own energy transition, rather than financing the… EU budget! The same reasoning applies, with due adaptation, to other economies exporting carbon-intensive products: levying at home what would otherwise be levied at the European border is not capitulation; it is fiscal sovereignty applied to the carbon era.
Added to this is a slower but more lasting path: the real decarbonization of production chains. The example of Egypt, which is building a 1.1 GW solar plant to directly power aluminum production for export, shows that African clean energy can move from being just a climate aspiration to a concrete competitive advantage before CBAM. Added to this is the urgency to diversify markets —through the African Continental Free Trade Area and the BRICS — and to build credible national emissions measurement and verification systems that are not left at the mercy of default values, which are systematically more punitive and imposed by the EU itself in the absence of verified data.
A continent that has historically contributed little to the climate problem should not be called upon to pay, in monetary terms and, at the same rate, for solutions designed in another economic context. But acknowledging this injustice does not dispense with action. On the contrary, it is precisely because the ground is uneven that Africa cannot afford to wait for Brussels. CBAM’s external pressure can, if well managed, become the missing engine for internal changes — fiscal, energy, institutional…
But Africa is not alone in this contest: it joins a growing group of emerging economies questioning the legitimacy and design of CBAM; and Europe also must act now. One question is becoming increasingly difficult to ignore: isn’t CBAM’s design plundering the most vulnerable?
