CBAM and Ferrochrome: Carbon Intensity Calculations for SA Producers
South Africa produces 50% of the world's ferrochrome. CBAM Phase 2 will directly impact SA ferrochrome exporters. This guide covers carbon intensity calculations, compliance pathways, and what to do now.
CBAM and Ferrochrome: Carbon Intensity Calculations for SA Producers
South Africa is the world's dominant ferrochrome producer, accounting for approximately 50% of global ferrochrome output. Ferrochrome is the primary input for stainless steel production, and South Africa's Bushveld Complex — the world's largest known chromite deposit — underpins this dominance.
Why Ferrochrome Exporters Must Act Now
While ferrochrome is not yet formally listed in CBAM Annex I, it is widely expected to be included in the Phase 2 expansion. The European Commission's review process is examining all steel precursors and alloys, and ferrochrome's role as a direct input to stainless steel production makes its inclusion highly likely.
SA ferrochrome producers who begin compliance preparation now will have a significant advantage over those who wait.
South Africa's Ferrochrome Industry
Key SA ferrochrome producers include:
- ▸Glencore Alloys (Lion Ferrochrome, Lydenburg)
- ▸Samancor Chrome (Ferrometals, Witbank; Tubatse Ferrochrome, Steelpoort)
- ▸Hernic Ferrochrome (Brits)
- ▸Merafe Resources (joint venture with Glencore)
These operations produce approximately 4–5 million tonnes of ferrochrome annually, with a significant portion exported to EU stainless steel producers.
Carbon Intensity of SA Ferrochrome
The embedded carbon intensity of South African ferrochrome is significantly higher than that of competitors in countries with cleaner electricity grids:
| Production Stage | Emission Source | Typical CO₂ Intensity | |-----------------|-----------------|----------------------| | Mining (chromite ore) | Diesel, explosives | 0.15–0.25 tCO₂/t ore | | Pelletising/sintering | Electricity, coke | 0.3–0.5 tCO₂/t | | Submerged arc furnace smelting | Electricity (coal grid) | 2.0–2.5 tCO₂/t FeCr | | Total (typical SA producer) | | 2.8–3.5 tCO₂/t FeCr |
The key driver of SA ferrochrome's high carbon intensity is the electricity-intensive submerged arc furnace (SAF) process combined with South Africa's coal-dominated electricity grid (emission factor: ~0.9 kgCO₂/kWh).
Calculating Your CBAM Liability
To estimate your potential CBAM liability when Phase 2 takes effect:
Formula:
CBAM Liability (EUR) = Annual Export Volume (tonnes) × Embedded Carbon Intensity (tCO₂/t) × ETS Price (EUR/tCO₂)
Example:
50,000 tonnes FeCr × 3.2 tCO₂/t × EUR 65.42/tCO₂ = EUR 10,467,200
Use the CBAM Calculator on this site to estimate your specific liability.
Decarbonisation Pathways
The most effective strategies for reducing CBAM liability:
- ▸Switch to renewable electricity — Replacing coal-fired grid electricity with renewable PPAs (power purchase agreements) can reduce embedded carbon by 40–60%
- ▸Improve furnace efficiency — Modern SAF technology can reduce electricity consumption by 10–15% per tonne of product
- ▸Optimise ore blending — Higher-grade chromite ore requires less energy per tonne of ferrochrome produced
- ▸Invest in carbon capture — Emerging technology, but relevant for long-term planning
Complete your CBAM compliance registration at the Digital Product Passport Registry.
Frequently Asked Questions
Complete all three compliance gates — Gate 1 KYC identity verification, Gate 2 CBAM financial authorisation, and Gate 3 Digital Product Passport registration — in one place at the DPP Registry.
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