Minister of electricity Kgosientsho Ramokgopa expects the US government to stop contributing to multilateral projects aimed at helping emerging economies decarbonise their energy sources.
Speaking on the sidelines of the African Energy Indaba in Cape Town this week, he said the Trump administration’s exit from the COP21 Paris agreement comes as South Africa seeks funding to develop up to 420Mt of CO2 equivalent of green energy at a cost of about R1.5-trillion, money the country does not have.
“We need to canvass that money somewhere else. What that stance of the Trump administration will do in the immediate [term is] it might shrink the pool of resources. There is the facility by majorly industrialised powers… and the US was one of the anchors there.
“So, I think in the current dispensation, they might pull out the American component. They haven’t said that, but all indications are that they are moving in that direction.”
Ramokgopa said South Africa’s delegation to the COP30 climate change meeting in Brazil in November will seek clarity on how much of the more than $12.9bn (about R237bn) in green funding from developed economies will come in the form of grants and how much from concessionary loans. The lack of clarity has prevented South Africa from tapping into the fund thus far.
Our commitment to clean transition is not a function of the position of other countries. We think that we have an obligation to our people first and to the South African economy
— Kgosientsho Ramokgopa, minister of electricity
“When we go to Belém in Brazil, the complication is that the Trump administration has really upended that conversation. He’s got a colourful way of characterising it, and [saying the US is going to] pull out of the Paris climate accord. [They are] a major player, so they can’t be discounted.
“Our commitment to clean transition is not a function of the position of other countries. We think that we have an obligation to our people first and to the South African economy. We are a small economy. It matters what others say, but… what determines our attitude is not a major power taking a stand. It’s what we think about the transition,” Ramokgopa said.
The fragmented global community is pulling emerging economies in two different directions on clean energy, with the US abandoning COP commitments to exploit fossil fuels and the EU doubling down on introducing the carbon border adjustment mechanism (CBAM) — a tariff on carbon-intensive goods entering the bloc from next year.
Addressing the US Congress this week, Trump said he had declared a national energy emergency to jolt the US back into fossil fuel exploration. He said the US would use more of its own oil resources to power its economy.
“I terminated the ridiculous green new scam. I withdrew from the unfair Paris climate accord, which was costing us trillions of dollars that other countries were not paying.”
Speaking at the African Energy Indaba, Central Energy Fund CEO Ayanda Noah accused the EU of hypocrisy in implementing its CBAM because its members had imported coal from Africa in 2022 when Russian President Vladimir Putin restricted access to Russian gas for the region.
“If you look at CBAM it really is punitive. It is brutal. It is also unfair and very devastating and there is also an element of being very hypocritical in it.”
Krutham MD Peter Attard Montalto said more tariffs were likely in global trade, presenting a major challenge for Africa and other emerging economies.
“Overall, we are in a different world now after a new administration in the US. We are talking about cyclical tariffs coming up and there is going to be a world where more tariffs are happening, of which CBAM may, if we’re honest, be a tiny forgotten thing on the side, given the scale of tariffs that could come from the US in particular.”
Shaun Nel, director of DG Capital Clean Energy Solutions, said CBAM would immediately affect several industries in Africa — notably steel, fertiliser and electrical components. It was urgent for the countries concerned to reduce the carbon inputs on their goods.
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