The launch of South African’s carbon tax, which would apply to major emitters including steel giant ArcelorMittal, power utility Eskom and petrochemical group Sasol, was delayed by one year to allow time for planning and consultation with stakeholders. The South African government said major emitters will be allowed to use carbon offsets, which could be generated by investment in domestic or possibly regional clean energy sources, to help meet their tax obligations.
The British grant goes to Johannesburg-based Promethium Carbon. Robbie Louw, a director at Promethium is quoted as aying the funding will assist to fast-track the development of a local carbon trading system in preparation for the carbon tax. Promethium was first selected by the Commission to carry out a 2013 preliminary study as to whether a carbon offset market could complement the tax and help ease costs for industry.
Promethium estimates South African offsets could reach prices of around R80 to R100 ($7.48 to $9.35) per tonne in the first couple of years of the market’s existence – or nearly 20 times the value of credits offsets in the UN carbon market, the world’s largest and most liquid. More than 80% of South Africa’s soaring greenhouse-gas emissions come from its energy sector, which is heavily reliant on coal – one of the country’s major exports.
Expected to be phased in over time, the country’s carbon tax is one of several initiatives, including a biofuels production incentive and higher vehicle emission taxes, which South Africa wants to launch to help reduce its growing carbon footprint.
