South African manufacturers exporting products such as steel, aluminium, cement, fertilisers, chemicals, electricity and hydrogen will have to provide emissions data by 2026. Photo: File
As global climate regulations tighten and pressure to decarbonise intensifies, manufacturers face mounting international requirements and changing consumer expectations.
At the forefront is the European Union’s Carbon Border Adjustment Mechanism, designed to level the playing field between EU producers subject to strict emissions controls and international exporters. From 2026, South African manufacturers exporting products such as steel, aluminium, cement, fertilisers, chemicals, electricity and hydrogen must provide verifiable emissions data or risk significant barriers to market entry.
Nowhere is this challenge more clearly illustrated than in South Africa’s vehicle industry — a cornerstone of the national economy, employment and exports. Here, Tier 2 and Tier 3 suppliers, crucial to the automotive value chain, are especially vulnerable. Many lack the financial resources, technical skills and infrastructure needed to effectively monitor and manage their emissions.
The good news is that green manufacturing provides a clear pathway forward. Green — or sustainable — manufacturing principles offer manufacturers the means to reduce environmental harm, cut costs and strengthen their competitiveness. At the heart of this transition lies a deceptively simple truth — you cannot manage what you do not measure.
Cost, complexity and context
For many manufacturers across South Africa, especially smaller enterprises, the primary challenge is not a reluctance to improve environmental performance, but rather the high costs and technical complexity associated with traditional emissions monitoring systems, such as continuous emissions monitoring systems. These require expensive equipment, specialised skills and significant ongoing maintenance, placing them beyond the reach of most small and medium-sized enterprises.
While more affordable alternatives do exist, such as proxy-based emissions measurement methods that rely on electricity and fuel consumption data, these too face adoption hurdles. Chief among them is a widespread lack of technical understanding about how to implement these systems effectively.
Compounding the problem is the fact that many off-the-shelf emissions solutions are designed for markets with very different regulatory, infrastructural and operational realities. These systems often require costly customisation or adaptation to fit South African manufacturing conditions and fail to account for the unique energy mix, variable data quality and capacity constraints common across local industries. This gap underscores the urgent need for context-appropriate, accessible solutions that are not only technically sound but also aligned with the realities on the ground.
Digital transformation
Today, digital transformation is no longer optional, it is essential for survival. Manufacturing companies that successfully harness the potential of emerging technologies, including artificial intelligence (AI), machine learning, digital twins, smart sensors and blockchain, can achieve greater transparency, efficiency and regulatory compliance. Companies embracing these innovations position themselves to benefit from cost savings and enhanced market access.
The Council for Scientific and Industrial Research (CSIR) has recognised this need by creating the Greenhouse Gas (GHG) Observatory, a digital emissions monitoring platform designed specifically for South African manufacturers. The Observatory leverages emerging digital technologies, such as internet of things sensors, AI-driven analytics, digital twin scenario modelling and blockchain-enabled data integrity, to deliver accurate, trusted and actionable emissions insights in real time.
A cornerstone of the GHG Observatory is BlockAPI, the CSIR’s blockchain-as-a-service platform. Blockchain, with its inherent data immutability, provides an ideal foundation for ensuring transparency, traceability and trust in emissions data. However, the complexity of blockchain technology and the scarcity of skilled blockchain developers have historically limited its adoption.
BlockAPI addresses this by significantly reducing barriers to blockchain integration, providing the facility to access a blockchain to store and verify data via an application programming interface (API). This means that existing systems can leverage the blockchain as a trust platform without heavy investment in blockchain expertise and blockchain infrastructure.
Within the GHG Observatory use case, BlockAPI securely records emissions data in an immutable ledger, ensuring data integrity critical for regulatory compliance and international reporting systems. BlockAPI can also be used to ensure transparency in supply chains, trigger financial incentives like tax rebates, enable carbon trading schemes and support circular economy mandates such as extended producer responsibility. In short, BlockAPI delivers trusted data where trust is essential.
The value of BlockAPI and the broader GHG Observatory concept was validated in a proof of concept conducted in 2024 at McWade Foundry, a small manufacturer producing aluminium-based electrical components. The pilot successfully demonstrated real-time emissions data collection, analysis and blockchain-backed verification, significantly reducing costs and technical barriers compared to traditional monitoring methods. The project provided McWade with trusted emissions insights and streamlined its compliance reporting, clearly illustrating how digital tools could benefit manufacturers across sectors, including automotive.
To address the industry-wide challenges posed by international compliance regulations, such as the Carbon Border Adjustment Mechanism, the CSIR is collaborating closely with the Manufacturing Circle. This is a prominent industry association representing South African manufacturers across diverse sectors. Its mission is to promote industrial growth, competitiveness and policy advocacy to ensure a robust manufacturing environment in South Africa, supporting economic growth, job creation and sustainable development.
The collaboration aims to develop and support practical digital measurement, reporting and verification standards and systems. This initiative will help companies across all manufacturing sectors, particularly those exporting to markets like the EU, report emissions data reliably and affordably, without the need for costly proprietary technologies.
Beyond compliance
The digital trust enabled by BlockAPI also paves the way for the broader implementation of concepts such as a “digital product passport”. This is a dynamic data tool that records and shares detailed information about a product’s composition, lifecycle and environmental footprint.
Internationally, it is gaining traction as part of efforts to promote transparency and circularity. For example, it is being used within the EU’s Circular Economy Action Plan, where it will soon be mandatory for many products under the proposed Ecodesign for Sustainable Products Regulation.
While initially driven by regulatory compliance, such as proving recyclability, emissions performance and material traceability, digital product passports are increasingly being used beyond compliance. Manufacturers are adopting them to enhance supply chain transparency; support reverse logistics and remanufacturing schemes; improve product design and inform carbon accounting and Environmental, Social and Governance reporting.
They also offer brand differentiation by enabling companies to credibly communicate their sustainability credentials to environmentally conscious consumers. In this way, digital product passports are becoming a strategic asset, supporting regulatory obligations and broader innovation, competitiveness and circular economy goals.
A pilot is under way at the CSIR exploring the use of digital product passports within the South African context. Trusted data via the passports supports companies in transitioning toward circular economy models. It allows manufacturers to design out waste, improve resource efficiency and provide verifiable proof for regulatory frameworks.
The success of digital solutions like the GHG Observatory, BlockAPI and others ultimately depends on collaborative partnerships between government, industry associations, technology research, development and innovation organisations like the CSIR and manufacturers themselves.
South Africa’s manufacturers face an urgent call to action. The regulatory landscape is shifting quickly and market expectations are evolving even faster. Companies that adopt digital innovations like blockchain, internet of things sensors, AI, machine learning and digital twins today will not only navigate regulatory complexities, but they will also thrive.
Digital tools that enable trusted, transparent data collection, monitoring and analysis empower manufacturers to optimise operations, reduce costs, comply with international regulations and access lucrative global markets.
The journey starts with trusted data, builds through digital transformation and culminates in competitive advantage. But it does not stop at data collection. True value lies in the ability to analyse, interpret and act on that data. With the right digital tools in place, manufacturers can uncover hidden inefficiencies, optimise resource use and design more sustainable products and processes.
As South Africa navigates the transition to a greener, more circular economy, now is the time to accelerate, by turning data into insight and insight into action.
Meryl Ford is a digital transformation specialist at the Centre for Robotics and Future Production at the Council for Scientific and Industrial Research.