EU’s carbon border tax: a new report shows Africa stands to lose US$25 billion every year

David Luke

A new European law that imposes the first ever carbon border tax in the world comes into force in October 2023. It will be applied gradually over the next three years before it is fully implemented.

A carbon tax is a type of levy imposed on greenhouse gas emissions. It is meant to encourage companies to adopt clean methods of production.

But firms could get around the tax by moving production units outside the EU to countries with less strict terms, such as those in Africa, and then exporting products back to the EU. That’s why the EU has come up with the Carbon Border Adjustment Mechanism.

At the moment it costs firms operating within the EU around €80 (US$86) to emit one tonne of carbon dioxide. Under the new system, importers will be charged the same for carbon emissions as domestic producers are.

The new policy will