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The Carbon Border Adjustment Mechanism (CBAM), set to take effect on January 1, 2026, will raise import costs for African products entering the European Union, potentially reducing Africa's GDP by up to 0.91%, or $25 billion compared to 2021 levels. The aluminum sector is expected to be the most affected, with export reductions of 13.9%, while iron and steel may see declines of 8.2%. CBAM aims to create a fairer competitive landscape by imposing taxes based on the carbon intensity of imports, which will vary by country, impacting nations differently based on their energy sources.