Pragmatic pathways for aligning climate and trade regimes with African green technology ambition

Summary

Introduction

Africa's vast renewable energy potential, of some 10 TW of solar energy, 350 GW of hydropower and 110 GW of wind power, combined with its abundant critical minerals, positions the continent as a potential global leader in clean energy technologies. The first African Climate Summit in Nairobi, Kenya, in 2023, heralded a call by African leaders for the development of 300 GW of renewable energy on the continent to address the needs of some 600 million Africans. This has spurred initiatives such as Mission 300, supported by the African Development Bank (AfDB) and World Bank, which seeks to provide energy access to 300 million people in Africa by 2030. Africa is also host to 30% of the world’s known critical mineral reserves. These minerals are essential to green technologies, such as solar, batteries and electric vehicles (EVs). Other technologies which build resilience, spur low carbon development and are highly relevant to the African context include climate smart agricultural interventions and precision agriculture technologies, such as drip irrigation, soil sensors, green building technologies and innovative waste recycling technologies that promote a circular economy. Their rollout is not only beneficial for climate action but positions African nations as local manufacturing hubs, driving green industrialisation and potentially creating 60 million new jobs in the green technology sector.¹ Dynamic fluctuations in the global trade environment could help or hinder these objectives.

This thought piece discusses these developments, reflecting on how international tariffs, and unilateral measures such as the CBAM support or undermine African green technology ambitions. The paper also explores how global climate and trade regimes should respond to these important developments.

Unilateral trade measures and access to resources

Many countries have become both frustrated with the effectiveness of the Paris Agreement and disaffected with multilateralism and geopolitical fragmentation. Consequently, as regions enhance their mitigation ambitions, these countries have reprioritised their national interests by increasing their use of unilateral trade instruments to protect their domestic industries.

The European Union’s CBAM is the most well-known of these instruments. Now well into its transitional period, and coming into full operation in January next year, the CBAM seeks to impose a border tariff on carbon intensive goods imported into the EU. The stated purpose of the CBAM is to level the playing field between the EU’s exporters, which are subject to a domestic carbon price, and exporters outside of the EU, which either pay a lower carbon price or none at all. In doing so, the CBAM is also intended to incentivise non-EU countries to develop domestic carbon pricing systems, such as a carbon tax or emissions trading scheme (ETS).

The CBAM also builds on a suite of other measures that will directly affect African trade, including the EU Deforestation Regulations,² the International Maritime Organisation’s carbon levy on shipping (coming into effect in 2028) and the incorporation of the shipping industry into the EU Emissions Trading Scheme. Following in these footsteps,the United Kingdom, Norway and Taiwan plan to introduce a CBAM in 2027.^{3 4} Mark Carney, Canada’s new Prime Minister, has also indicated an interest in developing a CBAM,⁵ as has Australia.

At the same time, the US has imposed sweeping tariff increases during the course of this year. While none of them are tied to climate measures, they do put an abrupt end to the hope that development can be achieved through trade and market access. For example, despite the lowering of the proposed US tariff on goods originating from Lesotho from 50% to 15%, the country said its textile sector was already devastated by the proposals.⁶ There is also considerable uncertainty whether the 25-year-old African Growth and Opportunity Act (AGOA), which grants African exporters preferential access to US markets, will be renewed later this year, and if so, on what terms.

Meanwhile, the US is also increasing its demand for rare earths and critical minerals, using peace deals for this purpose in regions such as the Democratic Republic of the Congo, where ceasefires were exchanged for US strategic access to minerals.⁷ Competition over access to these minerals is driven by the US-China trade war, with China recently restricting the export of rare earths and related products from its borders.

Impacts

The wave of trade and tariff measures over the past few years will have mixed impacts on African green technology ambitions. Potentially, the CBAM will increase the associated costs of African goods produced using fossil fuel intensive processes, and in turn increase demand for renewable energy. Theoretically, this could prompt local green technology production in the African energy sector. In practice, however, even this increased demandwould likely not overcome the significant challenges African exporters will face in complying with the CBAM,⁸ and, more notably, the challenges African countries have faced in accessing affordable, concessional finance for renewable energy deployment.

The greater concern is that the CBAM will place additional fiscal constraints on African countries, restrict fiscal space and thereby limit the ability of governments to invest in green technology innovations and R&D domestically. Although countries are still investigating the impact of the CBAM, early analysis suggests that under one model, the CBAM may reduce Africa’s collective GDP levels by -0.91%, which is equivalent to a USD 25 billion reduction in GDP at 2021 levels.⁹ Moreover, the impact on African countries’ gross domestic product (GDP) would be larger than on all other regions. This could dampen domestic growth and undermine the green industrialisation and technology ambitions of the African countries who are highly CBAM-exposed.

In this context, African nations are compelled to respond on multiple fronts: They must meet national development priorities – particularly those addressing poverty and energy access – pursue low carbon and climate resilient development, and find the resources to prepare for loss & damage. What’s more, they must achieve these goals while facing relatively low levels of climate finance, dwindling levels of overseas development assistance, mounting trade pressures and high levels of debt. The climate finance needed to implement Africa’s last round of NDCs was estimated at USD 2.5-2.8 trillion between 2020 and 2030.¹⁰ The USD 300 billion climate finance target agreed to at COP29 last year is woefully inadequate in this context. Levels of debt in African countries are also colossal. The rising costs of debt service payments are crowding out necessary investments in social development and climate change and further exacerbating the continent’s vulnerability to climate change. Trade inequities and the impact of unilateral trade measures will only exacerbate these pressures.

On the other hand, tariff wars and technology races could have indirect beneficial impacts for African green technology ambitions. Efforts to access Africa’s critical minerals for green and other technologies place the continent at a strategic advantage to command localisation and processing benefits, or trade access to these minerals for strategic access to green technologies available elsewhere. Similarly, tariffs on imports of renewable energy components could harm US green technology manufacturing ambitions, making other destinations, including Africa, comparably more attractive for manufacturing.¹¹ However, relocation is not so simple: African countries will require the right policy and enabling environment as well as the infrastructure and skills capacity to support green technology manufacturing.

The World Trade Organisation and the United Nations Framework Convention on Climate Change

The use of unilateral trade measures in climate and other contexts to achieve national development and a protectionist agenda has not gone unquestioned. Russia, China and Brazil have all objected to the CBAM within the World Trade Organisation (WTO), and India and South Africa have indicated they may still do so. Other African states have yet to voice an objection, with opposition primarily being led by emerging economies.

For many years, developing countries have tried to include the subject of unilateral trade measures within COP discussions, but have been largely unsuccessful. For the first time, they were briefly addressed in the Global Stocktake at COP28,¹² following submissions by developing countries that measures like the CBAM were contrary to provisions in the UNFCCC that prohibit climate response measures from being an ‘arbitrary or unjustifiable discrimination or a disguised restriction on international trade.¹³ Aside from its inclusion in the Global Stocktake, there has been little momentum in including unilateral trade measures as a dedicated agenda item or traction on this topic within the Just Transition Work Programme. Traction on the topic within the Katowice Committee of Experts on the Impacts of the Implementation of Response Measures (KCI) and the UNFCCC’s Forum on Response Measures has also been slow, with participants often citing the issue as one better dealt with within the WTO.

Other forums within the UNFCCC and Paris Agreement held to discuss technology transfer and support have also had a poor track record of success. These initiatives play an enhanced role in the context of unilateral trade measures, particularly when international financial support is lacking. While the Technology Mechanism was originally designed to provide opportunities for enhanced technology support, many of the technology action plans pursuant to the mechanism which have been created in developing countries are heavily outdated and unimplemented, with countries citing financial constraints and lack of technical capacity as the primary reasons. Parties have since initiated the development of the Technology Implementation Programme, which aims to create a more systematic and coordinated approach to addressing technology gaps in climate action. Political will and financial backing are critical to the programme’s successful operationalisation, as is an enabling policy environment.

Responding at a regional level

Following the second African Climate Summit in Addis Ababa in September 2025, African countries showed regional solidarity in redefining the continent’s role as an agenda-setter, pushing for greater agency, autonomy and the opportunity to provide input into key decisions. If African countries intend to shoulder this mantle, they must bolster their positions on unilateral climate measures within the UNFCCC, either through existing workstreams or through dedicated agenda items. It will be essential to have a more structured discussion about the meaning of Article 3 of the UNFCCC and what arbitrary, unjustifiable discrimination and disguised restrictions on trade entail.

At the WTO, African voices have been relatively silent. The countries that are most affected by unilateral trade measures, such as the Gambia, Libya, Gabon and Mozambique, will be particularly impacted by the CBAM.¹⁴ Prior to more formal appeal proceedings, they could launch a formal dispute under the WTO and commence with the 30-day consultations it requires, and potentially also conciliation and mediation. While the WTO lacks a functional appellate body, the Multi-Party Interim Appeal Arbitration Arrangement could address any appeals lodged against panel reports.¹⁵

However, legal appeals will take time. Looking ahead, African countries will have to address barriers in scaling green industrialisation and technology development and transcend the older development model to an investment-driven one which supports their exports. This requires a global solution to African debt, affordable finance, systemic biases in risk assessment and credit, regulatory barriers, and distorted perceptions of risk, as well as more innovative measures such as national investment platforms.

The African Continental Free Trade Area (AfCFTA) also plays a critical role in the regional response. Its accelerated implementation will enable countries to pursue free trade and serve as a platform for growth and development that can fundamentally shift trade structures between African countries. The AfCFTA aims to develop a single continental market, with tariff liberalisation structures seeking to replace or supplement existing Regional Economic Community (REC) tariff arrangements. It has a goal of eliminating 97% of tariffs across the continent. Practical measures that African countries can focus on to pursue green technology ambitions within the AfCFTA and RECs, could include (i) excluding environmental goods and services from the REC tariff liberalisation schedule exemptions (with AfCFTA guidance), and (ii) integrating measures to promote green technology development within AfCFTA protocols on investment, intellectual property, competition and digital trade.

Conclusions

Recent trade developments have both helped and hindered Africa’s green technology ambitions, painting a complex and highly dynamic picture. The CBAM, in theory, could boost demand for renewable energy, but its overall effect could dampen growth and the ability of African governments to spend on R&D and invest in local green industrialisation. Tariffs in some parts of the world could drive green industrialisation and technology R&D to less costly shores on the continent, but access to finance, capital, skill sets and the right policy environments will be determinative. On the other hand, demand for green minerals in Africa and export bans on these minerals in other parts of the world places the continent at a strategic advantage when negotiating localisation and technology access requirements.

These developments warrant an inclusive, open forum for discussion on the intended and unintended impacts of the CBAM and how countries can better support each other. For years, developing countries have pressed to include unilateral trade measures within the UNFCCC’s agenda, but progress has been slow, as has the UNFCCC’s Technology Transfer Mechanism. Ahead of COP30, African countries should prioritise the integration of trade and unilateral response measures within the discussions of the KCI, the Forum on Response Measures and the Just Transition Work Programme, to ensure that the full socio-economic impacts of these measures are accounted for in their design. Moreover, African countries would be well advised to pursue the operationalisation of the Technology Implementation Programme and revive financial and technical assistance for the Technology Mechanism. This will be vital for realising the full potential of these initiatives to support the continent’s green technology ambitions.

Endnotes

About the author

Olivia Rumble

Olivia is a Director of Climate Legal with more than thirteen years’ experience specialising in global and national climate change policy and law, climate finance, and carbon tax.