South African exporters face new EU sustainability regulations

The European Union is South Africa’s largest trading partner, receiving approximately R430 billion (€23 billion) in goods annually. While the Southern African Development Community (SADC)-EU Economic Partnership Agreement allows roughly 98% of South African exports to enter the European market duty-free, new sustainability regulations are creating strategic risks for local exporters.

Key regulatory shifts include the Corporate Sustainability Reporting Directive (CSRD), which mandates environmental, social, and governance (ESG) performance reporting, and the Carbon Border Adjustment Mechanism (CBAM). The CBAM, which entered its definitive regime in 2026, imposes a carbon price on specific carbon-intensive imports to equalize costs between European producers and foreign suppliers. This mechanism could potentially erode the duty-free advantages currently enjoyed by South African exporters.

According to the 2026 Forvis Mazars C-Suite Barometer, 27% of executives expect new or higher regulatory requirements to significantly impact operations over the next year. Consequently, 22% of respondents are reviewing their supply chains, operations, and procurement processes over the next three to five years to ensure compliance with European sustainability standards.