The Carbon Border Adjustment Mechanism: A First Assessment from Africa and Europe

By Invitation

Konrad Adenauer Stiftung (KAS) Regional Program Economy Africa and the Policy Center for the New South (PCNS) are organizing an expert conference that will bring together stakeholders and experts to exchange and assess first experiences with the Carbon Border Adjustment Mechanism (CBAM) in their respective countries.

CBAM is an EU climate policy that intersects with trade governance and industrial competitiveness. It aims to replace the current system of free allocation of emission allowances to EU-based manufacturers under the EU carbon market, which is a major obstacle to industrial decarbonization in Europe. Replacing free allocation is therefore an essential piece of the EU’s increased climate ambition. CBAM entered into force in January 2026 and is currently applied to a limited set of carbon-intensive sectors, namely cement, steel, aluminum, fertilizers, electricity and hydrogen.

Although intended as an EU climate policy, CBAM affects prices on global markets, particularly for basic carbon-intensive materials with costs that will likely be passed down supply chains. Over the past years, Europe’s global partners have been pointing out administrative burdens, compliance costs, risks of circumvention and legal uncertainty, particularly WTO compatibility as significant implementation challenges. African countries have also highlighted equity concerns, as CBAM applies uniformly to unequal trading partners, potentially affecting development prospects.

However, even aside from CBAM, global carbon taxation is accelerating, particularly as middle-income nations such as India, Brazil or China adopt respective mechanisms. The expansion of carbon pricing mechanisms therefore needs to be interpreted in the context of the EU CBAM implementation, and it becomes clear that the trend of carbon taxes and emissions trading systems (ETS) will accelerate globally over the next years and will consequently become an integral part of international climate goals.

Finally, the “successful implementation of CBAM on 1 January 2026 demonstrates the EU’s capacity to deploy complex climate policy instruments without hindering trade, while reinforcing transparency, fairness, and climate ambition across global supply chains.” In April 2026 the first quarterly price for CBAM certificates was determined at €75.36 per tonne of CO2, marking the beginning of the CBAM's definitive pricing regime.