South Africa signs Carbon Tax into Law

South Africa signed the Carbon Tax into law, which has been under discussion since 2010. The goal is to “provide for the imposition of a tax on the carbon dioxide (CO2) equivalent of greenhouse gas emissions; and to provide for matters connected therewith”. Most of the country’s electricity and around two-thirds of total energy comes from coal. In the electricity sector, there is a priority to tackle rolling blackouts and state-owned utility Eskom’s high debt. With this tax, the government hopes to facilitate the transition towards more renewable energy. It also aims for businesses and households to consider and incorporate the price of greenhouse gas emissions in their production, consumption and investment choices.

As of 1 June, South African industry will be subject to a carbon tax. The tax is to start at 120 rand a tonne of CO2 ($8). In the first phase, polluters will get 60-95% of carbon allowances free, bringing the effective tax rate down to R6-48/t. These rates are to be reviewed before phase two, spanning 2023-30.

The government’s blueprint for the sector to 2030 includes 1GW of coal capacity already in planning, before pivoting to gas, nuclear and renewables. It foresees adding 8.1GW of gas, 2.5GW of nuclear 2.5GW of hydropower, 5.7GW of solar and 8.1GW of wind, in the latest iteration reported by industry publication Go Legal.

This article originally appeared on Climate Home News, you can access it through this link.

The Carbon Tax Bill can be accessed through this link.

You can access the draft rules for collection and administration of the Carbon Tax through this link.