Absa AgriTrends 2022

regulatory reforms on climate Why should we take note of in the EU? With around a third of the total value of fruit exports from South Africa, destined for the European Union, South African fruit producers and exporters would be ill-advised not to take note of policy developments in this region. As mentioned above, the EU is also the leader in driving climate mitigation and although these policies might not be directly relatable to South African agriculture, these policies could shape climate policy beyond the EU which would ultimately affect our local context.

The Green Deal and the Fit for 55 programs for agriculture Within this context, we consider the implication of the Green Deal and the Fit for 55 programs for agriculture in the EU more broadly. Three factors included in the Green Deal has bearing on agricultural production:

A regulated emissions trading system (ETS) for the EU

Emission taxes levied in the EU

Carbon border adjustment mechanisms for imports into the EU

Assigning value to carbon

be implemented. This will ensure that the production of carbon-intensive products is not off-shored to other countries with lower carbon tax rates. The near-term vision for carbon border adjustment mechanisms is that it will only apply to energy-intensive industries and will initially cover six sectors namely iron and steel, aluminum, fertilizers, cement, and electricity. Experts note that these mechanisms are unlikely to extend to

The above factors are important as they will assign a monetary value to carbon in the EU. This will allow

for emitters in the EU to buy credits from carbon capturers and for regulators to tax companies or industries that emit beyond what they can trade to be carbon neutral. To extend this beyond EU borders a carbon border adjustment mechanism (CBAM) will


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