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).
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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.
The 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 requirements. 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 emissions,” 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, exporting 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 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 overseas countries to adopt cleaner production strategies by focusing on reducing waste and emissions at the source, improving efficiency and lowering costs. But by transitioning and reducing their carbon footprints, companies can also become more competitive,” adds Masipa.
Turning attention to the training offered through the NCPC to the metals and foundry 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 exported. “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, improving profitability,” she says.
Energy efficiency has long been a cornerstone 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 operations that still use simple pen and paper recording processes for each production melt,” notes Dr Masipa, adding that managing data using digital systems makes far more sense for producing data for CBAM reports.
“In South Africa, we now have less than 100 operating foundries, so it is vital that we assist them in terms of moving towards a just, sustainable and more competitive position,” she notes. Along with the cement, aluminium and chemical industries, the foundry industry is likely to face the highest export costs under CBAM if they do not adapt to lower carbon production methods, she adds.
Response strategies
Broadly speaking, CBAM cost mitigation strategies include investing in cleaner furnace technologies, improving energy efficiency, exploring renewable energy sources, and engaging in carbon offset projects.
Additionally, companies can lobby for supportive policies that facilitate the transition to lower emissions. This process could be assisted by metals companies working together to get a better idea of the existing baseline of their carbon footprint. The NCPC is hoping to assist the sector to address this.
“Companies can start to prepare by conducting thorough assessments of their carbon emissions. Quick wins, for example, can be as simple as switching melting times to make use of off-peak power, rather than working only during peak demand times,” she points out.
She says that internal communication and planning are also important: determining how production can be done most efficiently and always striving to use the minimum possible melting times, for example. “Waste management is key, and this simply requires good housekeeping. Foundry operations are often batch-based, so it is vital that the exact quantities of metal and the power required for each melt is accurately calculated and communicated at each and every stage of production. This planning, monitoring and communication can go a long way towards minimising energy and material waste,” Masipa explains, suggesting that huge investments are not always required.
“As with many energy efficiency and emissions reductions initiatives, the starting point is changing behaviour on the production floor. Simple signs reminding operators to switch off equipment that is not being used, keep furnace doors closed, when possible, and make sure any reusable scrap material is collected and stored for a later melt. Most of these things can be implemented after a single audit/walk-through and they immediately give the foundry practical experience and knowledge on how to start the transition for themselves,” Dr Masipa tells MCA.
“In terms of the training we offer, we assist plant managers to identify these quick wins, she continues. “Beyond this, though, we advise on investments in more sustainable technologies that are better aligned with international standards, furnaces that are better insulated and far more accurately controlled, for example.”
Most important for CBAM, though, is to engage in globally acceptable carbon accounting practices, while always looking to adopt cleaner solutions and/or more efficient heating solutions. “South Africa has potential advantages with respect to renewable energy, for example, particularly solar and wind energy, which can help to lower net emissions in the sector. Companies that leverage these resources can position themselves favourably under CBAM compared to both rival exporters and EU producers,” Masipa advises.
“As well as helping to restore the competitive advantage of South African exporters, investing in these technologies can help to accelerate the transition to renewable energy across the whole of South Africa, she continues. “Various companies in the steel and cement sectors are already proactively investing in cleaner technologies, and even exploring carbon capture and storage solutions. Additionally, some firms are collaborating with research institutions to innovate low-carbon production processes. These companies conduct regular emissions assessments, invest in energy-efficient machinery, explore alternative materials, and are developing strategic partnerships to enhance sustainability. They also engage in pilot projects to test new technologies and processes,” she informs MCA.
The NCPC recommends a multifaceted strategic response to CBAM, which includes:
- Assessment: Conduct a comprehensive carbon footprint analysis of the plant and its production processes.
- Investment: Invest in cleaner production technologies and renewable energy sources.
- Collaboration: Form partnerships with stakeholders, including governments and research institutions, to innovate and share best practices.
- Advocacy: Engage with policymakers to shape supportive regulations that promote sustainability.
- Education: Train staff on sustainable practices and the importance of reducing emissions.
- Transparency: Communicate efforts and progress in sustainability to all stakeholders to build trust and enhance the company’s global reputation.
This strategic approach can help mitigate the impacts of CBAM while positioning companies as leaders in sustainability.
“By putting a price on carbon emissions, CBAM is encouraging investments in cleaner energy and more circular production technologies, driving a shift in the energy and production landscape. If we in South Africa respond effectively, it may prove to be a very positive move for the metals industry and the South African Economy as a whole.
“Also, though, let us never forget that it is the sustainability of life on Earth that is really at stake. We must reduce our carbon emission and raise our sustainability levels for our own survival,” Zenzile Masipa concludes.
