The EU's Carbon Border Adjustment Mechanism (CBAM) entered a new phase in January 2026, now imposing financial liability on imports of carbon-intensive products. For South Africa, the immediate impact is limited to iron and steel and aluminum exports, which make up about 6% of exports to the EU. But the bigger risk is that CBAM will expand to cover indirect emissions from electricity use, which would directly expose Eskom's coal-heavy grid to trade penalties. South Africa's carbon tax is very low compared to EU prices, so exporters won't get much relief through CBAM's deduction mechanism. If indirect emissions are included in future CBAM reviews, companies relying on Eskom's grid could face much higher costs than competitors using cleaner power. This is already pushing mining and manufacturing firms to pursue renewable energy procurement and private generation projects. The article argues that decarbonization is shifting from an environmental issue to a core business competitiveness factor. For South African exporters, the carbon intensity of electricity supply could become a major cost driver in international markets, not just a compliance checkbox.
