- Rudi Dicks has warned South Africa’s industry to adapt to the requirements of the Carbon Border Adjustment Mechanism (CBAM) and reduce greenhouse gas emissions.
- Dicks said the line had been drawn in the sand on the standards for the EU exports market, which should also serve as a benchmark for production for the domestic market.
Rudi Dicks, head of the project management office in the Private Office of the President, has warned South Africa’s industry to adapt to the requirements of the Carbon Border Adjustment Mechanism (CBAM) and reduce greenhouse gas emissions or lose more than 550 000 units of exports market to the EU.
The CBAM is a carbon tariff on carbon-intensive products such as steel, cement, and some electricity imported to the EU. It was legislated as part of the European Green Deal and takes effect in 2026, with reporting starting in 2023.
Dicks said the line had been drawn in the sand on the standards for the EU exports market, which should also serve as a benchmark for production for the domestic market.
“If we don’t deal with CBAM, if we do not reduce our carbon emissions, we must forget about the EU markets in 2035,” Dicks warned.
“We export about 550 000 units. Our biggest market is the EU. If we cannot show that we are reducing, then we are in trouble.
“South Africa’s total exports are expected to fall by 10.1% in 2050, and GDP will decline by 9.3% by 2050 if more EU countries adopt a CBAM. This number rises to 2.6 million (units) if all exports are subject to a CBAM.”
Dicks was speaking during the Trade and Industrial Policy Strategies hybrid development dialogue on the role of masterplans in South Africa.
Industry players questioned the coordination of government departments on the master plans, citing the establishment of the sugar tax, which happened while the industry was engaged with the government on stability and growth.
However, Dicks dispelled the thinking about the role of the Presidency in all the government projects as being to provide a silver bullet, saying that departments still had to fulfil their functions.
Dicks pointed out that there were a lot of adaptations that had to be made in directing industries to utilise opportunities for the benefit of the local market, citing the National Transmission Company and South Africa’s target to build up to 14 500km of grid networks by 2030.
He also pointed to Transnet’s more than R100 billion backlog in rail and port developments and the independent power producers’ target to secure 70GW of renewable energy by 2030, saying these initiatives would require a correlation of the various masterplans to benefit the economy.