If SA doesn’t move faster to decarbonise its electricity grid, it risks losing access to key export markets, falling behind global competitors and taking a knock to its export earnings — a scenario that could put hundreds of thousands of jobs on the line, according to a new report by the Net Zero Tracker (NZT).
With 78% of SA’s exports destined for countries that have net-zero commitments the risks are mounting as these nations — particularly the EU, UK and China — begin enforcing carbon border taxes and demand cleaner supply chains.
The NZT, an independent research consortium, is a comprehensive and up-to-date database of public net zero commitments made by nations, regions, cities and major companies.
According to its latest report, more than 422,000 SA jobs are already tied to exports to jurisdictions with incoming or active carbon border adjustment mechanisms (CBAMs), and an additional 89,000 jobs are exposed to countries considering similar policies.
CBAMs are tariffs imposed on imported goods based on their carbon emissions. SA’s dependence on coal-fired power makes its products significantly more carbon-intensive than those of many global peers.
The EU’s CBAM will be fully active by 2026 with the UK to follow in 2027.
“SA has the tools to pivot — proven renewables potential, critical minerals and seats at global tables like the Group of 20 (G20) and Brics,” said John Lang, NZT Lead, adding that the country faced a choice to “climate-proof its exports or remain exposed to rising risks from more lucrative markets where decarbonisation isn’t just a nice-to-have”.
In the EU alone, SA’s export industries — especially basic metals — face billions in potential carbon tariffs. The report notes local metal production generates twice the emissions of its next most carbon-heavy competitor.
The report highlights how at least 323 multinational companies that operate in SA’s 10 biggest export markets — with combined revenues of $11-trillion — have made net zero climate commitments.
Most net-zero commitments aim for carbon neutrality by 2050 in line with the United Nations Framework Convention on Climate Change (UNFCCC) and the Paris Agreement goal of limiting global warming to 1.5°C above pre-industrial levels.
These multinationals’ net zero targets include Scope 3 emissions, which means they are not just cutting emissions from their own operations (such as factories) but also from their supply chains — that includes the goods they import from fossil fuel–dependent economies like SA.
Three of SA’s top exporting sectors face immediate threats:
- Basic metals, which contribute 32% of exports and 14% of GDP, are highly exposed to CBAMs, with more than 80% going to net-zero markets. Already, almost R300bn in exports and 23,000 jobs are subject to CBAM-related risk, the report stated.
- Agriculture, responsible for 22% of export-linked jobs despite making up just 5% of value, emits over three times more CO₂ per dollar of output than competitors such as Spain or Brazil.
- Automotives, SA’s third-largest export sector, send 65% of vehicles to CBAM-active markets. This local sector is the world’s second-most carbon-intensive after India. Global vehicle manufacturers with targets that include Scope 3 emissions are BMW, Toyota and Isuzu. Manufacturers with partial Scope 3 commitments include Volkswagen, Nissan and Mercedes-Benz.
Despite these risks, the report suggests a path forward. As of April this year, SA had 3,897MW of contracted wind capacity installed across 40 utility-scale farms, with 2.5GW under construction and a projected 70GW by 2050, according to the draft Integrated Resource Plan (IRP).
The report calls on developed countries to match carbon trade penalties with enhanced support — including full delivery of the $12bn Just Energy Transition Partnership — to help SA remain competitive in a fast-decarbonising global economy.
Yamkela Fanisi, spokesperson for the department of trade, industry and competition, told Business Day: “As part of the Industrial Policy implementation, the government is working on the decarbonisation strategy in different sectors of the economy, including energy supply.”
He said at an international level, “SA is engaging at bilateral and multilateral levels to deal with trade and investment measures to tackle decarbonisation.”
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