South Africa criticises UK plans to introduce CBAM analogue

South Africa has told the UK that its plans to introduce a cross-border carbon tax on imported goods would deepen global inequality. It is reported by Bloomberg.

The submission, which South Africa sent to the UK Treasury in June this year, also states that this step may violate the rules of the World Trade Organization. South Africa’s reliance on coal to generate much of its electricity makes it particularly vulnerable to the measure.

«CBAM is punitive and excludes industrial development opportunities to meet real socio-economic needs. The United Kingdom should consider cooperation mechanisms, not punishment mechanisms, to encourage third countries to adopt more environmentally friendly technologies, «the Department of Trade, Industry and Competition of South Africa (DTIC) said in a statement.

The parties did not comment on the information on this submission. Britain plans to introduce an analogue of CBAM by 2027.

However, DTIC notes that this measure will be introduced in too short a time for South African exporters to adapt, and the reporting conditions are burdensome to comply with. South Africa called for exemptions or smaller fines for African countries and said the UK’s measures were protectionist.

South Africa’s complaint, which is being considered in the UK along with other statements, repeats last year’s letter to the EU, in which South Africa said CBAM would jeopardize $1.5 billion of its annual exports.

As GMK Center reported earlier, the European carbon tax (CBAM) can harm the economies of developing countries if they do not quickly abandon fossil fuels in favor of “green” energy. This opinion was expressed by the President of South Africa Cyril Ramaphosa.