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Treasury Plans Greener SA Economy with Carbon Offsets
Information obtained from a media statement by the National Treasury (20 June 2016)
The Draft Regulations on the Carbon Offset was published by the National Treasury for public comment and further consultation. Treasury expects to launch the Draft Carbon Tax Bill in August or September this year, with recent announcements indicating the tax will be implemented early in 2017.
Information obtained from a media statement by the National Treasury (20 June 2016)
The Draft Regulations on the Carbon Offset was published by the National Treasury for public comment and further consultation. Treasury expects to launch the Draft Carbon Tax Bill in August or September this year, with recent announcements indicating the tax will be implemented early in 2017.
- The Draft Carbon Tax Bill makes provision for the carbon offset allowance in terms of Section 13. This enables companies to reduce their carbon tax liability by using offset credits of up to a maximum of 5 or 10 per cent of their total greenhouse gas (GHG) emissions, as specified in Schedule 2 of the draft Carbon Tax Bill.
- Carbon offsets can be generated through investments outside of a taxable entity’s activities that results in quantifiable and verifiable GHG emission reductions. In addition such carbon offset projects should generate sustainable development co-benefits and employment opportunities in South Africa by encouraging investments in energy efficiency, rural development projects, and initiatives aimed at restoring landscapes, reducing land degradation and biodiversity protection.
- The carbon offset mechanism is in line with the proposals contained in the National Climate Change Response White Paper of 2011 and efforts to transition to a low carbon, greener economy as pronounced in the National Development Plan.
Tax Relief Offered for Voluntary Carbon Budgets
By Linda Ensor of Business Day (04 May 2016)
During a media briefing before Environmental Affairs Minister, Edna Molewa’s, budget vote speech in the National Assembly, the following announcements were made:
By Linda Ensor of Business Day (04 May 2016)
During a media briefing before Environmental Affairs Minister, Edna Molewa’s, budget vote speech in the National Assembly, the following announcements were made:
- Companies that participate voluntarily in the Department of Environmental Affairs’ carbon budget plan will qualify for tax relief of 5% under the envisaged carbon tax regime.
- The carbon budget and emission reduction plans for each company will be voluntary until 2020 and will be underpinned by legislation and its enforcement penalties, thereafter.
- The Paris Agreement on Climate Change adopted last year will come into force in 2020.
- The voluntary programme will work alongside the compulsory observance of the Air Quality Act.
- A number of companies that were not included in the category of high emitters had requested to participate in the voluntary programme as they recognised the potential tax benefits.
- The planning and implementation of carbon reducing technologies by business and industry was emphasised.
The Draft Regulations for Carbon Reporting
On the 08th of January 2016, the Minister of Environmental Affairs, published the Declaration of Greenhouse Gases as Priority Air Pollutants (GG 39578, Notice 6, 08 January 2016); as well as the National Pollution Prevention Plans Regulations (GG 39578, Notice 5, 08 January 2016). The draft regulations declare the subsequent six greenhouse gases as priority air pollutants: Carbon dioxide (CO2); Methane (CH4); Nitrous oxide (N2O); Hydrofluorocarbons (HFCs); Perfluorocarbons (PFCs) and Sulphur hexafluoride (SF6).
The regulations further stipulate that the following entities will be required to submit Pollution Prevention Plans:
Companies that are liable to submit Pollution Prevention Plans must comply within three months after the promulgation of the regulations. Companies are further required to submit an annual progress report by 31 March, for the preceding calendar year.
On the 08th of January 2016, the Minister of Environmental Affairs, published the Declaration of Greenhouse Gases as Priority Air Pollutants (GG 39578, Notice 6, 08 January 2016); as well as the National Pollution Prevention Plans Regulations (GG 39578, Notice 5, 08 January 2016). The draft regulations declare the subsequent six greenhouse gases as priority air pollutants: Carbon dioxide (CO2); Methane (CH4); Nitrous oxide (N2O); Hydrofluorocarbons (HFCs); Perfluorocarbons (PFCs) and Sulphur hexafluoride (SF6).
The regulations further stipulate that the following entities will be required to submit Pollution Prevention Plans:
- An entity that emit more than 100 000 tonnes annually of the declared greenhouse gases, measured in carbon dioxide equivalent (CO2e).
- An entity undertaking a production process, as a primary activity, as set out in Annexure A of the Declaration of Greenhouse Gases as Priority Air Pollutants.
Companies that are liable to submit Pollution Prevention Plans must comply within three months after the promulgation of the regulations. Companies are further required to submit an annual progress report by 31 March, for the preceding calendar year.
The Draft Carbon Tax Bill
The Draft Carbon Tax Bill was introduced in the National Assembly on 02 November 2015. The draft bill currently proposes, as the start date, 01 January 2017. The tax will be phased in over a period of time to allow for smooth transition in adopting cleaner and more efficient technologies. The first phase will run from implementation up to 2020.
The proposed tax rate is R120 per tonne of CO2e and will remain fixed during the first phase. The tax base comprises emissions from fossil fuel combustion, emissions from industrial processes, product use and fugitive emissions. During the first phase a basic percentage based threshold of 60% will apply below which tax is not payable. Additional tax-free allowances will further apply to particular sectors. The carbon tax will be administered by the South African Revenue Service.
The Draft Carbon Tax Bill was introduced in the National Assembly on 02 November 2015. The draft bill currently proposes, as the start date, 01 January 2017. The tax will be phased in over a period of time to allow for smooth transition in adopting cleaner and more efficient technologies. The first phase will run from implementation up to 2020.
The proposed tax rate is R120 per tonne of CO2e and will remain fixed during the first phase. The tax base comprises emissions from fossil fuel combustion, emissions from industrial processes, product use and fugitive emissions. During the first phase a basic percentage based threshold of 60% will apply below which tax is not payable. Additional tax-free allowances will further apply to particular sectors. The carbon tax will be administered by the South African Revenue Service.
Emission Standards for Small-scale Char and Charcoal Plants
On the 18 September 2015, the Department of Environmental Affairs published a notice declaring smallscale char and charcoal plants (not exceeding 20 tons of charcoal per month) controlled emitters in terms of the National Environmental Management: Air Quality Act, No 39 of 2004.
The notice establishes emission standards for small-scale char and charcoal plants in terms of the act. Existing and new small-scale char and charcoal plants will be regulated differently. Existing plants are defined as those that were legally authorised to operate as at 01 April 2010 or for which an application for an environmental authorisation had been submitted before this date.
Immediate compliance for existing and new small-scale char and charcoal plants with separate emission standards is required, with the standards for existing plants being less onerous. By 1 April 2020, all existing plants must comply with the minimum emission standards for new plants. Operators of such plants are required to submit at least one emissions report per annum to an air quality officer in the prescribed format. The first emissions report must be submitted within 12 months of the notice.
On the 18 September 2015, the Department of Environmental Affairs published a notice declaring smallscale char and charcoal plants (not exceeding 20 tons of charcoal per month) controlled emitters in terms of the National Environmental Management: Air Quality Act, No 39 of 2004.
The notice establishes emission standards for small-scale char and charcoal plants in terms of the act. Existing and new small-scale char and charcoal plants will be regulated differently. Existing plants are defined as those that were legally authorised to operate as at 01 April 2010 or for which an application for an environmental authorisation had been submitted before this date.
Immediate compliance for existing and new small-scale char and charcoal plants with separate emission standards is required, with the standards for existing plants being less onerous. By 1 April 2020, all existing plants must comply with the minimum emission standards for new plants. Operators of such plants are required to submit at least one emissions report per annum to an air quality officer in the prescribed format. The first emissions report must be submitted within 12 months of the notice.
