If South Africa is serious about building an indigenous EV industry, the effort must be treated as a long-term national project rather than a short-term political initiative, writes the author.
The core problem is this: South Africa has a domestic carbon tax, and the European Union has its own Carbon Border Adjustment Mechanism (CBAM). South African manufacturers exporting to Europe now have to contend with both. Former Trade Minister Rob Davies has called this a "double penalty." Mineral and Petroleum Resources Minister Gwede Mantashe made the same point bluntly at a recent industry gathering, noting that the US, China, India, and the Middle East have no carbon tax, South Africa is the only country outside the EU carrying this burden, and it is linked directly to European standards.
South Africa's domestic carbon tax currently sits at R190 per tonne of CO₂ equivalent and is projected to rise to around R400 per tonne by 2030. On top of that, CBAM certificates, which EU importers must purchase from January 2026 are priced in line with the EU Emissions Trading System, currently around €70 to €100 per tonne. South African exporters can theoretically receive credit for carbon taxes already paid domestically, but the DTIC has acknowledged the country lacks the technical capacity to implement the monitoring, reporting, and verification methodologies that CBAM demands. In other words, the credit exists on paper. Claiming it is another matter entirely.
