Trade ministers representing the Brics Plus group of countries are taking the fight over a mooted carbon export policy to the EU. The economic bloc wants the policy to be reconsidered in favour of a fairer approach to trade in carbon-intensive products.
Deputy minister of trade, industry, & competition Zuko Godlimpi told Business Times this week that Brics trade ministers meeting in Moscow in July agreed that the EU’s Carbon Border Adjustment Mechanism (CBAM) must be challenged.
“We were able to agree that all of us are united on the need to have the conversation about the reconsideration of CBAM and how it was rolled out, and that unilateral action on the front is unhelpful,” said Godlimpi.
“There must be a discussion about what level of decarbonisation we are vying for and what balanced way we perform that in. So, the principal idea is about shared responsibility for the climate adjustment process, and you cannot wake up one day and say: ‘OK, these ones are not coming in’ because you are totally prejudicing the developing world.”
The CBAM policy, to be introduced in January 2026, proposes a carbon tax on imports — such as hydrogen, steel, fertiliser, iron, and aluminium — whose production is carbon-intensive. Former trade & industry minister Ebrahim Patel was also a vocal critic of the policy.
The scheme seeks to achieve climate neutrality by 2050. According to trade and industrial policy strategies, up to $7.3bn (almost R140bn) in African exports are at risk. South Africa’s most vulnerable sectors are iron ore, steel and aluminium — worth just under 1% of the country’s GDP and nearly 3% of its exports.
There must be a discussion about what level of decarbonisation we are vying for and what balanced way we perform that in
— Deputy minister of trade, industry, & competition Zuko Godlimpi
Godlimpi said in its continued case against CBAM, South Africa recognised the value that other developing countries could bring by assisting the EU in understanding the potential effects of imposing unilateral policies on smaller economies.
He said South Africa still considered the door open for the EU to have constructive discussions with them about the CBAM, but believed that the Brics Plus group could enrich the discussion with a broader range of perspectives from the Global South.
“Our approach is not to antagonise anybody but to be firm on the principle of justice and affordability.”
He said there was merit in bringing the matter before the World Trade Organisation [WTO] as it concerned fair and equitable trade.
“If we bring it to the WTO as the Brics family, it sort of re-engages the WTO as a strategic platform where things are to be resolved and to sort of constrain what appears to be an unmitigated move towards unilateralism. It’s CBAM now, it will be something else on a different day.”
Manufacturing Circle CEO Philippa Rodseth said South Africa needs to fast-track low-carbon energy transitions supported by active diplomacy to provide time and resources to adapt and implement decarbonisation measures.
“[The] industry’s short-term exposure to CBAM is high. An offensive strategy needs to be considered in response, as time is required to decarbonise our heavy manufacturing industries requiring large-scale renewable energy rollout and new production processes.”
GDP Global associate director and independent trade compliance adviser Leon Marais said it was concerning South Africa did not have proper legislation in place to control trade and this was further complicated by these challenges.
“The minister of trade, industry and competition is ... aware that the EU has announced measures to address climate change including an effective ban on the sale of new motor vehicles with internal combustion engines by 2035, complemented by incentives for electric vehicles.”
He said South Africa would not have a strong case at the WTO because it did not have its house in order when it came to implementing other agreements and policies aimed at addressing climate change and environmental priorities.
“We had to impose trade regulations from January 1 2021 on hydrofluorocarbons due to their negative impact on the environment, but South Africa did not do it. If the WTO looks into this, they may find that we are not fully compliant on environmental policies and commitments.”
Trade & Industrial Policy Strategies researcher Seutame Maimele said to mitigate the potential harm portrayed by the introduction of the CBAM, five key pathways have been identified that need urgent attention.
“These pathways include adapting greenhouse gas accounting infrastructure, restructuring the South African carbon tax, technological change, trade policy and continual diplomatic engagements.”
He said South Africa should start exploring different trade markets for expansion, including expanding to the Brics Plus market, boosting demand in the domestic market and regional markets, and especially looking at exploring the African Continental Free Trade Area market.
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