This report outlines targeted entry points to be considered for mitigating adverse impacts associated with the rise of Border Carbon Adjustments (BCAs), with a particular focus on managing their effects in South Africa. The proposed interventions aim to safeguard and enhance South Africa’s access to export markets while supporting the country’s transition toward a low-carbon, competitive economy.
Interventions are grouped into four pathways, anchored by a foundational “no-regret” assumption: institutional arrangements must be established, and awareness of climate-trade dynamics must be significantly elevated across government, industry, labour, and civil society. Given the complexity of these interventions, a comprehensive and coordinated approach is essential to engage and align all stakeholders.
The Authors would like to acknowledge the Manufacturing Circle CBAM working group, the NEDLAC trade and industry chamber, PCC’s Climate Finance and Innovation (CF&I) working group, the National Treasury, the Department of Forestry, Fisheries and the Environment, the Department of Trade Industry and Competition (the dtic), the TIPS internal team and the Council for Scientific and Industrial Research (CSIR) for their comments and engagements on drafting this research.
This publication was commissioned by the PCC and has been made possible with the financial support of the African Climate Foundation. The contents of this publication and any events are the sole responsibility of the authors and do not necessarily reflect the views of the funders.
Recommended citation: Maimele, S., Ismail, F., Patel, M., Hector, M. (2025). Border Carbon Adjustments Research: Strategic Pathways to Mitigate Adverse Impacts. Presidential Climate Commission, South Africa.
In the second quarter of 2025, monitoring added 17 projects to the Tracker, 10 of which reported their value, amounting to R26.9 billion. Projects were registered across mining, manufacturing, services and utilities. Employment opportunities were recorded from three projects, with most jobs - 852 jobs - reported under Bid Window 3 (BW3) of the Department of Electricity and Energy Battery Energy Storage Independent Power Producer Procurement Programme (BESIPPPP). In addition, 13 pre-existing projects were updated.
Main Bulletin: The Real Economy Bulletin - Third Quarter 2025
In this edition
GDP growth: The GDP increased by 0.5% in the third quarter of 2025. Growth in the year to the third quarter was 1.9%, but it was somewhat inflated by an extraordinary jump reported for agriculture. Construction and utilities, however, shrank 5.6% over the past year. Read more.
Employment: In the year to the third quarter of 2025, employment grew by 109 000 jobs, or 0.6%. While total employment has risen 4.2% since the 2020 COVID-19 pandemic, it has lagged behind the working-aged population. Methodological changes in the Quarterly Labour Force Survey this quarter have been accompanied by delayed publication of some details, however. Read more.
Infrastructure: Both electricity and freight transport stagnated in the year to the third quarter of 2025. Eskom saw a 4% decline in output, although it remained 4% higher than in the third quarter of 2023. Private generation for the national grid was essentially the same as a year earlier. Read more.
International trade: Both exports and imports rose modestly year-on-year, by 2% and 1% respectively. Quarterly growth was stronger, with exports up 5% and imports 8%. The imposition of high tariffs by the US from early September did not visibly affect South African exports in the quarter. Ferrochrome exports, however, crashed, falling from a quarterly average of R20 billion in 2023 to R5 billion in the third quarter of 2025. Read more.
Investment and profitability: Gross fixed capital formation recovered some 5.4% in the third quarter of 2025, mostly due to a jump in public sector investment. The increase reversed a decline that had begun in mid-2023, at the height of the loadshedding crisis. Still, private investment was almost flat, and the investment rate continued to decline. Profitability increased across the economy outside of mining. Read more.
Foreign direct investment projects: The TIPS Foreign Direct Investment Tracker monitors FDI projects on a quarterly basis, using published information. In the third quarter of 2025 it recorded 20 projects. Eleven of these reported an investment value for a total of R55.8 billion, but much of the proposed spending will take place outside of South Africa. In addition, 15 projects announced earlier were updated. Read more.
Briefing Note 1: Key findings from updates to the National Employment Vulnerability Assessment (NEVA) - by Danae Govender, Michael Hector, Nokwanda Maseko, Muhammed Patel and Kate Rivett-Carnac. TIPS has undertaken an update of the vulnerability assessment for five value chains that are particularly exposed to the climate crisis (petroleum-based transport, coal, metals, agriculture and tourism). The findings will inform updated Sector Jobs Resilience Plans that aim to improve resilience to the impacts of the climate crisis. Read the Briefing Note online: Key findings from updates to the NEVA.
Briefing Note 2: The mining value chain and decarbonisation - by Sakhile Ndlovu and Akhona Myataza. This note draws on a forthcoming TIPS publication, Decarbonising the mining value chain in South Africa: Technological options for a low-carbon future. Read the Briefing Note online: The mining value chain and decarbonisation.
TIPS industry studies provide a comprehensive overview of key trends in leading industries in South Africa. They aim to provide background for policymakers and researchers, and to strengthen our understanding of current challenges and opportunities in each industry as a basis for a more strategic response.
This update reviews changes in the plastics industry, focussing on production, recycling, trade, technology and regulation.
TIPS industry studies provide a comprehensive overview of key trends in leading industries in South Africa. They aim to provide background for policymakers and researchers, and to strengthen our understanding of current challenges and opportunities in each industry as a basis for a more strategic response.
This update of the automotive industry analyses the United States and South Africa trade relationship and the potential impact of the tariff on South Africa’s automotive industry.
The Import Localisation and Supply Chain Disruption study seeks to identify goods from the list of imports identified in the quarterly Import Trackers that South Africa could possibly viably manufacture. Each report focuses on five manufactured items from the list of imports in the corresponding Import Tracker quarterly reports. The five products for the First Half of 2025 are:
Product 1: Self-propelled mechanical shovels, excavators and shovel loaders (excluding self-propelled mechanical shovels with a 360° revolving superstructure and front-end shovel loaders)
Product 2: Radio navigational aid apparatus
Product 3: Overhead travelling cranes, transporter cranes, gantry cranes, bridge cranes, and mobile lifting frames
Product 4: Photovoltaic AC generators
Product 5: Parts and accessories of bodies for tractors and goods, and passenger vehicles
Download: TIPS Import Tracker - First Quarter 2025
Download: TIPS Import Tracker - Second Quarter 2025
Upheaval in the global external environment, including the recent COVID-19 pandemic, infectious disease outbreaks such as the Marburg virus, and the most recent development aid funding cuts, has created a sense of urgency among African nations to relook at health systems resilience and self-sufficiency in the supply of healthcare products. This Working Paper focuses on how South Africa’s strategic engagement in the Group of 20 (G20) could enhance its ability to mobilise international partnerships, influence global pharmaceutical policy, and attract investment for pharmaceutical manufacturing to facilitate export-led sector growth.
The South African government places industrial policy among the key interventions for driving growth. At its core is the manufacturing industry, which faces a rapidly changing global environment shaped by supply chain shifts, climate change, and technological advances. This calls for closer assessment of the implications for South Africa.
TIPS is hosting a three-part Development Dialogue series on key manufacturing subsectors, focusing on sustainability, technological change, and the evolving trade environment.
The first dialogue examined sustainability issues in the iron and steel, automotive, and plastics industries. The second dialogue explored how digitalisation, automation, and innovation are reshaping South Africa’s manufacturing sector. This final dialogue focuses on international trade trends and their implications for the country's industrial developments
Invitation
Agenda
11h00 - 11h10 Welcome and opening remarks: Nokwanda Maseko
Gillian Chigumira (TIPS) - Insights from paper: International trade trends in horticulture
Dr Michael Hector (TIPS) - Insights from paper: International trade trends in food processing
Lucas Mthembu (TIPS) - Insights from Paper: International trade trends in clothing and textiles
Dr Neva Makgetla (TIPS) - Discussant
Resources
Manufacturing Industries and Subsectors: Industry Studies
Industry Studies are available for the following sectors: Automotive, Capital Goods, Clothing and Textiles, Electrical Equipment, Electronics, Food Processing, Horticulture, Plastics, Steel, and Wood and Paper
Through dialogue and collaboration, the conference aims to deepen understanding of the challenges and opportunities associated with South Africa’s Just Transition and the impacts faced by the working class and communities. It aims to highlight critical insights from ongoing, evidence-based research projects and foster discussions on policy frameworks that balance environmental imperatives with social and economic justice. Ultimately, the conference represents a step forward in shaping sustainable and equitable transition pathways for the working class — ensuring that climate action protects livelihoods, promotes decent work, and places social justice at the core of South Africa’s economic transformation.
OPENING AND SESSION 1: COMMISSIONED RESEARCH
Introduction and context of the programme - Matthew Grant (JTLC Manager)
Opening and welcome: Rudi Dicks - Presidency
Annual Report on South Africa and Climate Change - Mamokete Modiba (PBS Development Consulting)
The Future of SASOL - Rod Crompton (Employment Relations Exchange)
Quarterly Tracker on Key Just Transition Policy Development and Debates - Dr Nedson Pophiwa (Fuchsia Africa Consulting)
An Analysis of Structures Promoting Participation in the Development of a Just Transition in South Africa - Lethabo Rametsi and Ntandokazi Masimula (Urban-Econ:NIKELA)
Discussant - Dr Saul Levin (TIPS)
SESSION 2: INTERNAL RESEARCH
Decarbonising the South African economy in response to the impact of climate change and in line with the country's global commitments is already having an impact on the workers and associated communities in the coal value chain. TIPS is conducting research under multiple projects to assess the impact of the energy transition on coal workers and the necessary conditions for a just transition in line with the PCC’s Framework for Just Transition.
Elements of this research were presented at a Learning Event on 5 November 2025.
Nokwanda Maseko (TIPS) - Welcome and Opening Remarks
Chere Monisa (TIPS) - Attitudes of coal workers towards the Just Transition
Muhammed Patel (TIPS) - Coal Sector Vulnerability Assessment
Simbarashe Mhaka and Nothembi Mahlangu (JUST SA) - Existing Industry Provisions for South African Coal Workers in Transition
Gaylor Montmasson-Clair (Southern Transitions) - Discussant