GHG Reporting and Carbon Tax

Rayten Engineering Solutions > GHG Reporting and Carbon Tax

GHG Reporting

South Africa is committed to reducing their Greenhouse Gas emissions and meeting its own domestic targets in terms of the National Development Plan of 2012. Having ratified the Paris Agreement in November 2016, convened by the United Nations Framework Convention on Climate Change (UNFCCC), South Africa has set ambitious targets in a global effort to mitigate GHG emissions. The GHG mandatory reporting regulations and the Carbon Tax Act No. 15 of 2019 are integral in ensuring South Africa’s commitment to tackle Climate Change.

Any person, company or entity who undertakes an activity (above a certain threshold) and is responsible for the release of Greenhouse Gas emissions is required to report on their emissions to the Department of Environmental Affairs (DEA) by the 31 March each year. These activities generally include:

Stationary fuel combustion installations (≥ 10 MW).
Fugitive emissions associated with coal mining and oil and gas operations.
Waste disposal and treatment, including wastewater.
Industrial process emissions.
Mineral production and processing activities.
Chemical production activities.
Pulp and paper production activities.
Glass production activities.
Metallurgical industrial activities.

An emitter is liable for a fine up to R10 million or imprisonment up to ten years if they do not comply with the mandatory GHG reporting regulations.

Carbon Tax

The Carbon Tax Act No. 15 of 2019 is implemented using a phased approach, allowing emitters time to transition to cleaner and more efficient technologies resulting in lower GHG emissions. Phase One is effective from 1 June 2019 to 31 December 2022.

The tax rate is R120 per tonnes of CO2-eq (carbon dioxide equivalent) emitted by the generation facility or entity for the relevant reporting period. The carbon tax rate will increase by CPI + 2% during the first phase and thereafter by CPI.

However, there are tax-free allowances that apply that can make the overall effective tax rate much lower between R6 and R48 per tonnes of CO2-eq emitted. Tax free allowances are capped at 95% and include:

A basic tax-free allowance of 60% during Phase One (until December 2022).
An additional tax-free allowance of 10% for process emissions.
An additional tax-free allowance of 10% for fugitive emissions.
An additional tax-free allowance of up to a maximum of 10% for trade exposed sectors.
An additional tax-free performance allowance of 5% based on performance against intensity benchmarks.
An additional tax-free allowance of 5% for companies who participate in the carbon budget system.
An additional tax-free carbon offset allowance of 5% or 10%.

Rayten Engineering Solutions can assist your company with their GHG emissions reporting and carbon tax calculation needs. We have the expertise to assist you with:

GHG emission inventory and reporting.
GHG facility registration.
National Atmospheric Emission Inventory System (NAEIS) GHG reporting.
Pollution Prevention Plans (required if your CO2-eq emissions exceed 0.1 Megatonnes in a reporting year).
Carbon tax calculations.
Monitoring of GHG emissions for point sources (e.g. stacks and vents).