Would CBAM promote greener African-EU agri-food trade? Insights from a joint economic-legal assessment

The carbon border adjustment mechanism (CBAM) is a key policy instrument for the EU to reach its carbon neutrality goal without losing market shares or causing carbon leakage. It is a unilateral measure adopted in Brussels without consultations with the EU’s trading partners. Agrifood products are not yet directly subject to carbon pricing at the farm gate. However, on top of agricultural production inputs such as nitrogen fertilisers, all farm-to-fork transport will be subject to the CBAM when entering the EU. This paper focuses on the potential impact of different conceptualisations of the CBAM, especially on African countries, from a joint economic and legal perspective that includes issues related to World Trade Organization rules and trade and investment treaties. It aims to provide a more holistic perspective on the CBAM than previous works, also by including related policy items within the EU Green Deal that may have potentially bigger trade impacts on Africa than the CBAM, namely the EU Deforestation mitigation regulation (EUDR). These Green Deal regulations take on board European producer and consumer food security concerns, yet they fail to account for similar concerns of African farmers, food traders, processors and consumers. Applying a qualitative research approach shows that the impact of the CBAM on the food value chain could affect African food trade even more than other regions. The CBAM, the EUDR and other measures aimed at promoting greener production, trade and investment have raised numerous development, efficiency and equity concerns. The conclusion is that African policymakers and value chain operators, as well as stakeholders with social and environment concerns, will want to adapt production, processing and export standards to maintain market access and profitability.

DOI: 10.1088/2976-601X/adebf3