Mozambique and other low-income countries could be severely affected by the European Union’s Carbon Border Adjustment Mechanism. There is a strong need to ensure that any action taken to achieve the climate goals is equitable, does not increase inequalities and does not undermine the least developed countries’ fight against the climate crisis.
The CDD proposes that the European Union grant a period of exclusion or exemption to least developed countries (LCD) such as Mozambique; and increase financial support and assistance for climate action in LDC, taking into account the resources that will result from this initiative. to prompt you in reaching the peak of accomplishment.
In July 2021 the European Commission proposed the regulation of the Carbon Border Adjustment Mechanism (CBAM), one of the key elements for achieving the European Union’s goal (EU) to reduce net greenhouse gas emissions by at least 55% by 2030 (compared to the 1990 level). On March 15th, the Council of the European Union reached a first agreement on the file.
The CBAM is a tariff on EU imports of electricity, cement, aluminium, fertilisers, iron and steel products, depending on the emission content of production. With this measure, EU importers will be required to purchase carbon certificates corresponding to the price of carbon that would have been paid if the goods had been produced under EU carbon pricing rules. The main objective is to limit carbon leakage, that is, for companies to transport the production of goods to countries with less stringent environmental rules, and to encourage partner countries to establish carbon pricing policies to combat climate change. This mechanism will help accelerate the decarbonisation of European industry and, at the same time, protect it from companies from countries with less ambitious climate targets.
However, while this measure responds to the strategy of accelerating Europe’s green transition, it may have severe side effects on least developed countries (LDC). EU import data indicates that a total of six (6) African countries appear at least once in the list of the 10 most affected importers in each sector, namely: Egypt, Mozambique, Algeria, Morocco, Tunisia and South Africa.
Mozambique, in particular, is the prime example of a LDC that will be severely affected by this measure. As shown in Graph 1, Mozambique is in the group of the 10 largest aluminium exporters to the EU, with an annual export volume well above US$900 million.
