A decline in European demand for fossil fuels alongside rising demand for cobalt, nickel, and other critical minerals for the energy transition will greatly affect global markets. The European Commission on July 14, adopted a set of intermediate proposals to cut greenhouse gas emissions by 55 percent from 1990 levels by 2030 as part of a broader European Green Deal (EGD) and will impact its 65billion Euros trade with Africa.

According to a report by the Africa Policy Research Institute (APRI), in collaboration with the Africa Programme at the Carnegie Endowment for International Peace, this development will impact African countries in seven main areas: agriculture, biodiversity, energy, critical raw materials (CRMs), circular economy, new technologies, and finance.

Most prominently, a decline in European demand for fossil fuels alongside rising demand for cobalt, nickel, and other critical minerals for the energy transition will greatly affect global markets and, by implication, the economies of oil-dependent and mineral-rich African countries. The EGD offers the promise of overhauling EU-Africa relations from the donor-recipient orientation of the past toward a mutually beneficial partnership – if the right steps are taken to ensure genuine partnership building and representation of African priorities.

“In order to take full advantage of the opportunities presented by the EGD, and mitigate potential risks, African countries must clearly articulate and assert their own climate transition agendas; and, key issues that demand attention include increased transparency surrounding climate finance disbursements, creating a better understanding of the impact of the Carbon Border Adjustment Mechanism on exports from Africa, and updated mapping of Critical Raw Material reserves,” the report said.

The EGD is a set of long-term policy initiatives that define the European Union’s (EU) climate strategy to reach net zero emissions by 2050 and aim to make Europe the first mover in international climate policy. Toward this goal, the EGD provides a road map for a socioecological transition to a low-carbon future and the building blocks for a green economic growth strategy.

Seven Implications of the EGD for Africa

The EGD will demand new agricultural standards as the EU plans to become a leader in setting sustainable global food standards. To access the EU market, African countries must comply with these standards and this could constitute additional non-tariff barriers for African agriculture exports to the EU.

The EU intends to phase out oil by 2050 as part of a shift to clean energy and this could lead to a decrease in oil demand and declining prices for African suppliers, particularly after 2030. The energy transition is already leading to a decline in upstream investments with oil majors like Shell planning divestment.

The report said that Europe’s plans to use decarbonized gas as a transition fuel would present some short-term opportunities for African gas producers. With an increasing European demand for green hydrogen, partnerships are being established with African countries through the European Clean Hydrogen Alliance to secure 40 gigawatts of hydrogen imports from non-EU countries by 2030.

The phaseout of oil will lead to the rising demand for critical raw materials required for clean energy and technologies. The EU sources some of these raw materials like barite, bauxite, and cobalt from Africa, creating opportunities for Africa to replace Asian supply chains.

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