Beyond the rhetoric: What the EU and UK CBAMs mean for African countries
Carbon emissions trade policies are reshaping global trade rules, and Africa is on the front line. The European Union’s (EU) Carbon Border Adjustment Mechanism (CBAM), fully operational since January 2026, now requires importers to purchase certificates covering the embedded emissions of goods in six carbon-intensive sectors. The mechanism continues to evolve, with more detailed implementation rules recently adopted and planned extensions of its scope to downstream products and new emissions categories.
The United Kingdom, meanwhile, is launching its own CBAM in January 2027, with immediate financial obligations and no transitional phase. Unpacking these dynamics is critical for African countries seeking to navigate evolving requirements while advancing industrialisation and sustainable development objectives. This policy brief unpacks recent developments and how they may reshape countries’ exposure to the EU and UK CBAMs, before examining the mechanisms’ differentiated impact on African countries through granular, country- and sector-specific case studies spanning three time horizons.
In the short term, Morocco and Egypt illustrate how two major African fertiliser exporters face starkly different outcomes. Morocco is better positioned due to its low-carbon phosphate production, while Egypt, whose gas-intensive nitrogen sector has a significantly higher emission intensity per tonne, faces a more challenging outlook. In the medium term, the potential extension of the EU CBAM to indirect emissions would restructure competitive edges along energy lines. In this context, Mozambique’s hydropower-based aluminium production would gain an advantage while Egypt and South Africa would face sharp cost escalations from their fossil-fuel-dominated grids. In the long term, the forward-looking cases of Guinea, Ghana and Namibia reveal that the EU CBAM can catalyse green industrialisation for countries with abundant renewable energy, provided that complementary capital, infrastructure and verification capacity are in place.
Taken together, these case studies show that the EU CBAM produces markedly uneven outcomes across the African continent, driven by differences in production methods, energy sources and institutional readiness. Five cross-cutting findings emerge. First, it is relative competitiveness, not trade exposure alone, that shapes a country’s CBAM exposure and readiness. Second, that trajectory is not static, as evolving requirements and planned scope extensions will redraw exposure profiles. Third, building monitoring, reporting and verification capacity is a near-term priority but must be embedded within wider institutional and infrastructural development to be effective. Fourth, although the EU CBAM can incentivise green industrialisation, realising that potential depends on complementary finance, technology and energy infrastructure. Fifth, differentiated approaches are needed. African countries could combine diplomatic engagement, the adoption of domestic carbon pricing and long-term decarbonisation strategies, while the EU tailors its support to African countries’ specific exposure and vulnerability profiles.
This policy brief is part of the Briefs on Trade and Climate Sustainability 2026 series, published by the LSE Firoz Lalji Institute for Africa and the African Climate Foundation as a resource for African policymakers and stakeholders navigating the intersection of trade and climate. Read the full series here.
