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

The carbon border adjustment mechanism (CBAM) is a key policy instrument for the EU to reach its carbon neutrality goal without losing market share or causing carbon leakage. In spite of the CBAM’s focus on products whose production heavily relies on fossil fuels, agri-food 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 EU’s carbon pricing system when entering the EU. The review and analysis in this paper focus on the potential impacts of different conceptualisations of the CBAM, especially on African countries, from a joint economic and legal perspective that includes issues related to World Trade Organisation rules and trade and investment treaties. Our enquiry aims to provide a more holistic perspective on the CBAM than previous works, also by including related policy items within the Green Deal that may have potentially bigger trade impacts on Africa than the CBAM, such as 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, we conjecture that the impact of the CBAM on the food value chain could affect African food trade even more than other regions. We find that the CBAM is a unilateral measure adopted in Brussels without consultations with the EU’s trading partners. We suggest that, initially, the CBAM will likely have only a limited ‘knock-on’ impact on Africa’s agri-food exports. However, the CBAM, the EUDR and other measures aimed at promoting greener production, trade and investment have raised numerous development, efficiency and equity concerns. 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.