The Carbon Tax forms part of national legislation released in 2019 in response to the commitments made by South Africa toward curbing carbon emissions which are in line with the targets set out in the Paris Agreement of 2016, of which South Africa is a signatory. The Carbon Tax is scheduled to be rolled out in multiple phases – South Africa is currently in Phase 1 of the roll-out, with Phase 2 (applicable to the agricultural industry) originally scheduled to begin on 31 December 2022.
The 2022 Budget proposal announced early in 2022 resulted in a proposal for Phase 2 of the Carbon Tax roll-out in South Africa to be delayed – it proposed that Phase 2 of the Carbon Tax be delayed by three years and become effective on 31 December 2025. Please refer to page 48 of the 2022 Budget Review.
With this delay in mind, and due to the already strong focus from global markets (e.g. via the SDG’s, Paris agreement, UK Green deal, etc.), SIZA aims to encourage members to prepare for the looming Carbon Tax requirement. Recordkeeping of energy usage will assist members with calculating their Carbon Footprint, as a year’s worth of data is needed, and further assists members with illustrating the improvement made towards reducing carbon emissions.
With this in mind, SIZA has recently clarified its stance on the Carbon Footprint requirement of the SIZA Environmental Standard in response to the phased roll-out of the Carbon Tax in South Africa. Our proposed stance still needs to be discussed during the next Audit Reference Group meeting in November 2022 and, thereafter, confirmed by the SIZA Board of Directors.
When compared with the checklist to be completed, our current stance leans towards answering the applicable checkpoints as follows:
Code Requirement 3.2 – Checkpoint (4.2.1)
Yes – The member has begun an annual recordkeeping process to track all direct energy usage.
No – Annual recordkeeping has not been implemented to track all direct energy usage (minor non-compliance).
Code Requirement 3.2 – Checkpoint (4.2.2)
Yes – The member has completed an annual carbon footprint calculation.
No – An annual carbon footprint calculation is not available (observation – until phase 2 of the Carbon Tax is implemented).
Code Requirement 4.1 – Checkpoint (5.1.1)
Yes – The results of carbon footprint calculations are used to create realistic goals for shifting from high emission activities to renewable energy sources.
No – Either: i) An annual carbon footprint calculation is not available (observation – until phase 2 of the Carbon Tax is implemented); ii) A carbon footprint is available, but no realistic goals have been set to shift high-emission activities to renewable energy sources (recommendation).
Please keep an eye out for our communications later this year when we will confirm our final stance on the Carbon Footprint requirement of the SIZA Environmental Standard.