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How SA Businesses Can Build Resilience and Gain a Competitive Edge Under CBAM

Gaylor Montmasson-Clair, Senior Economist at Trade & Industrial Policy Strategies

Summary

Gaylor Montmasson-Clair highlights the significance of decarbonisation for South African businesses aiming to enter the European Union Market under the Carbon Border Adjustment Mechanism (CBAM).

Companies that have already decarbonised or are subject to a domestic carbon price will have an advantage in accessing the EU Market. The initial move for businesses is to implement the Monitoring, Reporting, and Verification (MRV) system to demonstrate the carbon intensity of their products and enhance energy efficiency and decarbonise production processes.

The ultimate objective is to decarbonise effectively through energy efficiency, sourcing low-carbon power, and decarbonised energy supply.

Although energy and water industries are not currently targeted by CBAM, Gaylor encourages businesses to begin preparations as CBAM is anticipated to expand to cover most sectors of the economy in the future.