CBAM Impact on Botswana: Coal Grid, Steel Exports and the Carbon Cost Challenge

Botswana presents one of Africa's most challenging CBAM compliance scenarios. The country's electricity grid is almost entirely dependent on the Morupule coal power station, running at approximately 850 gCO₂/kWh — one of the highest grid carbon intensities on the continent. For steel exporters using grid electricity in their production process, this creates a situation where actual embedded emissions may be higher than the EU default emission factor of 1.985 tCO₂/tonne.

Botswana's CBAM-Exposed Sectors

Botswana's primary CBAM exposure is in Steel & Iron. The country's steel sector produces structural steel and construction materials, with a portion exported to EU markets. EU export value in CBAM-scope goods is estimated at EUR 35M/year. While modest in absolute terms, the coal-grid penalty means the CBAM cost per tonne is disproportionately high.

The Coal Grid Penalty

For a steel producer using Botswana's 850 gCO₂/kWh grid, the Scope 2 electricity component of embedded carbon is approximately 0.85 tCO₂/tonne (assuming 1,000 kWh/tonne of steel). Combined with direct process emissions (approximately 1.2 tCO₂/tonne for EAF steel), actual embedded carbon is approximately 2.05 tCO₂/tonne — slightly above the EU default of 1.985 tCO₂/tonne. This means Botswana steel exporters face a situation where verification may not deliver savings. The strategic question is whether to use EU default values (1.985 tCO₂/tonne) or invest in actual measurement. For producers with above-average energy efficiency, actual measurement may still be beneficial — but the coal grid makes this a close calculation.

The Renewable Energy Transition

Botswana has announced ambitious renewable energy targets, including 1,500 MW of solar PV by 2030. If this transition proceeds, the grid carbon intensity will fall significantly, improving the CBAM position for steel exporters. Exporters who invest in actual emissions measurement infrastructure now will be positioned to demonstrate year-on-year improvement as the grid decarbonises.

Compliance Pathway for Botswana Exporters

1. ▸Model actual vs EU default emission values before committing to a verification approach
2. ▸Identify all CBAM-scope goods in your EU export portfolio
3. ▸Appoint an Authorised CBAM Declarant registered in the EU CBAM Registry
4. ▸Register at the Digital Product Passport Registry
5. ▸Submit your first CBAM declaration by 31 May 2027
6. ▸Monitor the renewable energy transition — grid decarbonisation will improve your CBAM position Botswana's coal grid is a genuine CBAM challenge. But it is also a transition opportunity: exporters who build emissions measurement infrastructure now will be best positioned to demonstrate improvement as Botswana's renewable energy programme delivers results.