MechChem Africa November-December 2024

CBAM: a call to action for SA’s metals sector

MCA talks to Dr Zenzile Rasmeni Masipa – Project Manager for skills development, resource efficiency and the circular economy at the National Cleaner Production Centre (NCPC) – about South Africa’s metals industries and the impact of the EU's Carbon Border Adjustment Mechanism (CBAM).

changes necessary to steadily reduce their carbon emissions and thus minimise their CBAM costs.” CBAM requires that exporters of iron, steel and aluminium products fully account for the carbon emissions during production. The legislation aims to prevent what the EU calls ‘carbon-leakage’ where EU companies relocate production to countries with less stringent climate policies, undermining efforts to reduce global greenhouse gas emissions. “CBAM aims to motivate over seas countries to adopt cleaner production strategies by focusing on reducing waste and emissions at the source, improving efficiency and lowering costs. But by tran sitioning and reducing their carbon foot prints, companies can also become more competitive,” adds Masipa. Turning attention to the training offered through the NCPC to the metals and found ry industries she says that the NCPC looks at waste minimisation, energy management and water management, for example, all while also focusing on how to measure the carbon footprint of the operation and how to record and allocate a GHG-emissions’ value to the specific products being ex ported. “We can help to enable companies to monitor their input resources and manage them throughout the production process. So as well as reducing resource usage, which in turn reduces emissions, inefficiency within

the production process is reduced, improv ing profitability,” she says. Energy efficiency has long been a corner stone of reducing emissions and improving sustainability and a number of larger iron, steel and aluminium producers have made strides in this area in recent years. But few in the foundry industry have updated their production processes to take advantage. “They are still using old furnace technology with open gas furnaces. And we encounter

T he National Cleaner Production Centre (NCPC) supports South African manufacturers though technical interventions and skills development in resource efficiency, cleaner production and other circular economy methodologies. Alongside the National Foundry Technology network (NFTN), the programmes have a special focus on the metals and foundry sectors. “We look at the skills we can offer to the foundry industry to help them prepare for changes in global sustainable require ments. We are currently offering courses to help position foundry operators, especially those exporting products, to understand the implications of the EU’s carbon border adjustment mechanism (CBAM), which is due to be fully applied in January 2026. “CBAM legislation will impose a tax on imports from carbon intensive industries based on their production-related emis sions,” explains Dr Zenzile Rasmeni Masipa. “This will affect all foundry industry castings being exported from South Africa into the EU,” she adds. The legislation is currently in a two-year transition period that will end in December 2025. By that time, South African exporters from sectors covered by CBAM are expected to report accurate greenhouse gas (GHG) embedded emissions data to EU importers. And from January 2026, export ing firms will, depending on the reported emissions, have to buy CBAM certificates at the EU border for CBAM-covered goods – effectively paying an additional product related carbon tax. “Via training and onsite walk-through audits, we are working to capacitate aluminium, iron and steel companies along the value chain so they can better ready themselves for this change: to help them to both comply and to remain competitive,” she says, adding that rather than being a barrier to trading with the EU, CBAM compliance may open up additional opportunities to trade outside of South Africa. “But this depends on companies putting in place the

Hulamin head of environmental sustainability, Hendrik De Villiers, describes Hulamin’s rolling mill initiatives to meet CBAM requirements at the NCPC Sustainable Industries Conference in September. Hulamin exports 22% of its rolled aluminium into the EU.

De Villiers explains that every 10 to 12 t coil exported into Europe from the Hulamin mill must now be categorised into one of 10 CN codes. The exact Scope 1 emissions embedded per ton of metal must also be reported, and Scope 2 emissions for every kWh of electricity used in the production of the coil must also be accounted for.

4 ¦ MechChem Africa • November-December 2024