Responding to the EU Green Deal: A Proactive Approach to Trade and Green Industrial Policy in Africa

Since the adoption of the European Union’s Green Deal in 2020, the EU has introduced a series of green trade measures that are reshaping its external economic relations. These include the Carbon Border Adjustment Mechanism (CBAM), the Deforestation-free Products Regulation (EUDR), the Corporate Sustainable Due Diligence Directive (CSDDD), the Ecodesign for Sustainable Products Regulation (ESPR) and the Critical Raw Materials Act (CRMA). While differing in design and objectives, these instruments combine offensive and defensive rationales: incentivizing greener production abroad, preventing carbon leakage and competitive disadvantages, accelerating the EU’s circular economy transition, and securing sustainable supply chains for critical raw materials (CRMs). Collectively, they are expected to influence supply and demand patterns, raise trade costs and reshape international value chains, with differentiated impacts across trading partners. Countries with greener production structures may benefit, whereas developing countries and least developed countries (LDCs) risk facing adjustment challenges and compliance constraints.

This paper argues that, although concerns voiced by developing countries regarding capacity constraints and insufficient recognition of development principles are legitimate, a purely reactive response would be insufficient. Focusing on the ESPR and the CRMA, it examines their trade implications for Africa and advocates for a proactive strategy. Broadly, a proactive strategy would entail linking a changing EU market economy that is increasingly focused on sustainability objectives, to development and climate priorities in the EU trading partner. For the circular economy transition, the risk of new non-tariff barriers under the ESPR calls for greening key export sectors and addressing compliance gaps. Rising EU demand for CRMs under the CRMA risks locking African countries into its position as raw material exporter and worsening human rights and sustainability concerns, but could create opportunities for value addition and processing, while safeguarding sustainability standards including through efforts to align domestic international efforts. The paper underscores the importance of leveraging the African Continental Free Trade Area (AfCFTA), the EU–Africa partnerships and technical assistance, and of embedding responses within holistic green industrial policies aligned with climate, trade and development priorities.