For decades, South African goods have travelled far and wide, our exports are part of the country’s DNA. The European Union is a key destination, but fresh winds are blowing in the form of the Carbon Border Adjustment Mechanism, or CBAM.
This isn’t a distant threat. It’s knocking at the door, and it will reshape how we do business with Europe.
At its core, CBAM is the EU’s way of making sure that everyone plays by the same rules when it comes to carbon emissions. Europe already has a strict carbon pricing system, the Emissions Trading System (ETS). Without CBAM, there’s a risk that companies could dodge these rules by moving their production outside the EU to countries with weaker climate laws, a phenomenon called “carbon leakage.” CBAM levels the playing field by putting a cost on the carbon built into imported goods, making sure imports pay the same price as EU-made products.
From 1 January 2026, anyone importing into the EU will need to buy CBAM certificates to cover the carbon footprint of their goods. The price of these certificates is tied to the EU’s ETS. The more carbon in your product, the higher the cost for your EU customer. While it’s the importer who officially pays, the impact will filter right back down to South African producers especially those in sectors that rely on coal-heavy energy.
Let’s be honest: South Africa’s energy mix is still dominated by coal, and our production methods especially in metals, tend to be more carbon-intensive than those in Europe. That puts us in the firing line.
Aluminium: We’re the EU’s eighth-largest aluminium supplier. But there’s a catch our aluminium has one of the highest carbon footprints among EU imports. If nothing changes, experts warn the CBAM levy could slash the value of our unwrought aluminium exports by half. With an average of 18 tonnes of CO2 per tonne of aluminium, we simply can’t ignore this new reality.
Iron & Steel: The EU is a vital customer for our steel. But our industry still leans heavily on the Blast Furnace Basic Oxygen Furnace process and coal-fired power. This means our steel could quickly become too pricey for EU buyers once CBAM hits, sending them searching for greener alternatives.
The bottom line? If you don’t have verified, accurate emissions data and a plan to cut emissions your goods could soon be priced out of one of our biggest markets.
The World Bank says your risk under CBAM depends on two things: how carbon-intensive your products are compared to EU averages, and how dependent you are on EU sales. Even if the overall economic hit is limited, some high-emission sectors could feel it hard. South Africa’s local carbon tax (currently under USD 20 per tonne) is still miles behind the EU’s price, so there’s work to be done.
The transitional phase is already underway. Here’s what you should be doing:
Track Your Emissions EU Style: Since January 2025, only EU-compliant emissions reporting counts. If you’re not collecting data the EU way, you’re already behind.
Get Pre-Verified: If your emissions data can’t be verified, the EU will use default numbers which are much higher and will cost you more. Pre-verification protects your reputation and your bottom line.
Stay Ahead: Industry leaders are urging exporters to start gathering and sharing accurate emissions data now. This isn’t something to leave until the last minute especially for steel, aluminium, cement, fertilisers, and hydrogen.
Plan for the Price Jump: From 2026, CBAM certificates become non-negotiable, and the cost will reflect your carbon footprint. Knowing your numbers is non-negotiable.
It’s not all doom and gloom. Exporters who start adapting now could come out stronger. Accurate emissions data doesn’t just mean compliance it builds trust with EU buyers who increasingly demand transparency and lower-carbon products. Getting ahead now could even give you an edge over competitors.
Navigating CBAM is about more than paperwork, it’s about having a partner who understands the ins and outs of global trade. With DHL, you get more than just a logistics provider. You get access to a global network, deep customs expertise, and a team committed to sustainable, compliant supply chains. We’re here to help you keep your exports moving efficiently, reliably, and in full compliance with new EU rules.
Ready to take charge of your export future? Open a business account with DHL today and make sure your products keep reaching the world, CBAM and all.
CBAM is here, and the clock is ticking. By investing in emissions tracking, securing verification, and working closely with EU partners, South African exporters can not only protect their market share but even turn this challenge into a new competitive advantage.
EU CBAM to halve S African aluminium export value | Latest Market News
CBAM Financial Impacts in 2026: What South African Businesses Need to Know Now
CBAM: What it means for exporters of steel, iron and aluminium | The Carbon Trust
Everything you need to know about the Carbon Border Adjustment Mechanism (CBAM) | Homaio
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Understanding the Carbon Border Adjustment Mechanism - Yellow Tree
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