On 1 February 2027, EU importers will be able to buy their first carbon border certificates. They will use them to pay for the carbon in everything they have imported since 1 January 2026, and the declaration for 2026 is due by 30 September 2027. In other words, the bill for the steel, aluminium or fertiliser bought this year has not arrived yet. It will.
The Carbon Border Adjustment Mechanism, CBAM, entered its definitive phase at the start of the year. It concerns anyone who sells, buys or plans to produce in Africa for the European market.
The principle, in one sentence
A European steel or cement maker pays for its CO2 emissions under the EU Emissions Trading System. CBAM charges the same carbon price on the emissions embedded in imports, so that a European plant is not undercut by one that pollutes for free. The base text is Regulation (EU) 2023/956, simplified by Regulation (EU) 2025/2083, in force since 20 October 2025.
Which goods, exactly
Six families are covered: cement, iron and steel, aluminium, fertilisers based on nitrogen, electricity and hydrogen.
The detail of the customs codes is where Africa's interest lies. In the iron family, only agglomerated ore, pellets and sinter, is on the list. Non agglomerated ore, the fines and lump that leave a mine, is not. Ore from Simandou, whose first cargo left Guinea on 2 December 2025, enters Europe without CBAM. Steel made from it does not.
The same logic applies to aluminium: bauxite and alumina are out, the metal is in. For fertilisers, it is ammonia, nitric acid and fertilisers that contain nitrogen. A straight phosphate is out, a nitrogen compound fertiliser is in.
Who pays, and how much
The EU importer pays, or its customs representative. Since the 2025 simplification, an importer is only caught above 50 tonnes of covered goods a year. According to the EU institutions, that threshold exempts about 90 percent of importers, mostly small businesses, while still covering 99 percent of imported emissions. Above it, the importer needs authorised CBAM declarant status before importing.
The certificate price follows the EU carbon market: a quarterly average in 2026, a weekly average from 2027. At the end of summer 2026, carbon was trading around 80 euros a tonne.
Any carbon price already paid in the country of production is deducted. The importer can declare either the plant's actual emissions, verified by an accredited body, or default values set by the Commission. Those defaults are cautious by design: they are not meant to reward the absence of measurement.
Why 2026 costs little and 2034 costs a lot
European producers still receive free allowances, and CBAM only applies to the share that is no longer free. That share rises every year on a schedule written into the EU ETS directive. Simplified, this is the proportion of carbon actually charged:
| Year | Share charged |
|---|---|
| 2026 | 2.5% |
| 2027 | 5% |
| 2028 | 10% |
| 2029 | 22.5% |
| 2030 | 48.5% |
| 2031 | 61% |
| 2032 | 73.5% |
| 2033 | 86% |
| 2034 | 100% |
To make it concrete, take a tonne of steel whose production emitted two tonnes of CO2, a common order of magnitude for the blast furnace route. At 80 euros a tonne of carbon, the full theoretical charge is 160 euros per tonne of steel. It barely registers in 2026. In 2030 nearly half of it applies. In 2034, all of it.
An investor building an export plant aimed at Europe today will commission it just as the bill becomes serious.
Who is exposed in Africa
The World Bank has measured each country's exposure. The clearest case is Mozambique: 97 percent of its aluminium goes to the EU, and its production emits 7.4 times more CO2 per dollar exported than the average European producer. The extra carbon cost would equal 6 percent of the value of its aluminium exports and 0.6 percent of GDP, the highest level in the world. Egypt follows at 0.2 percent of GDP, mainly because of fertilisers.
The same work shows the opposite for Ghana. Its aluminium, smelted with hydropower, emits less than the European average, and its exposure is negative: the mechanism gives it an edge.
That is the main lesson. CBAM does not penalise Africa as such. It penalises carbon, and it rewards clean power.
What it changes for buyers and investors in West Africa
Where you process sets the price. Ore shipped raw to Europe escapes the mechanism. The same ore turned into steel with coal pays it. Turned into steel with gas, hydro or solar, it pays much less. For an industrial project on the West African coast, the energy choice becomes a line in the income statement.
Measure from day one. A plant that cannot document its emissions will be declared at default values, which means the high price. Installation level emissions data is now part of what a European buyer asks for, next to a certificate of analysis.
Check your Incoterms. Selling DDP into Europe means taking on the import. The seller, acting through a representative established in the EU, then carries CBAM on its own invoice. A DDP price calculated without it is a wrong price. See quoting DDP in West Africa for how we build delivered prices.
Watch the UK too. London has announced its own mechanism from 1 January 2027, on similar sectors.
What we do
When we build a sourcing file for a European buyer, we check the product's customs code first, and therefore whether it falls within CBAM. If it does, we ask the supplier for installation level emissions data before the order, not after. When we quote a DDP delivery, the carbon cost is in the price.
If you buy steel, aluminium, cement or fertiliser from Africa, or you are looking at a processing plant, talk to us before you set your prices for 2027.
Read next: sourcing commodities from Africa and EUDR compliance for African commodities.
Sources: European Commission, Taxation and Customs Union, CBAM definitive regime (start on 1 January 2026, authorised declarants, 50 tonne threshold, certificate pricing, deduction of carbon price paid at origin); Regulation (EU) 2023/956 and its Annex I (covered goods and customs codes); Regulation (EU) 2025/2083, in force since 20 October 2025 (simplification, declaration deadline, certificate sales); European Parliament and Council press releases of 2025 (90 percent of importers exempted, 99 percent of emissions covered); Directive 2003/87/EC as amended (phase out of free allocation); World Bank, Maliszewska, Chepeliev, Fischer and Jung, 2 July 2025 (exposure indices for Mozambique, Egypt and Ghana).