Electricity and Control April 2021

ENERGY MANAGEMENT + THE INDUSTRIAL ENVIRONMENT

Carbon budgets and pollution prevention plans

Eckart Zollner, Head of Business Development, EDS Solutions

Although South Africa’s CarbonTax Act requires businesses to calculate their liability and submit their carbon tax return only once a year, compliance with the act is not a once-off accomplishment, nor is it as difficult to achieve as some organisations think. By using suitable monitoring tools, such as a cloud-based carbon tax calculator, along with practical strategies like pollution prevention plans and carbon budgets, organisations can track compliance and determine liability on an ongoing basis.

W ith a clear view of emissions across the organisa- tion’s value chain provided by carbon analytics tools, businesses can monitor their outputs and measure the effectiveness of their carbon reduction efforts, in line with their goals, in real-time. Compliance requires meaningful change The Carbon Tax Act was not intended just to burden businesses with calculating emissions to determine their tax liability on an annual basis. Rather, the act aims to use carbon tax as a means to bring about environmental awareness and urge behavioural change in industry. It has proven to be an effective tool in other countries: Sweden reportedly reduced its greenhouse gas emissions by 26% while growing its economy by 78% between 1990 and 2017; in the same timeframe, France cut emissions by 13% and grew its economy by 51%. For South Africans, meaningful change in business mindset and operational processes is required if we are to play our part in averting climate change to preserve our planet for future generations. South Africa has committed to achieving net-zero emissions by 2050. The Carbon Tax Act was introduced in 2019 and is being rolled out in three distinct phases. The first phase, introduced as a ‘soft phase’, runs until 31 December 2022. Subsequent phases are expected to instate more stringent continuous requirements to move South Africa’s Carbon Tax In 2016 South Africa became a signatory to the Paris Agreement which is a comprehensive framework to guide international efforts to limit greenhouse gas emissions and to address the threat of climate change. The Carbon Tax Act has been designed to target intensive users of ‘dirty energy’, such as fossil fuel-based energy, and it is these industries that will be most affected. The tax is to be implemented in phases. The first phase runs from 1 June 2019 to 31 December 2022 and scope one emitters liable under this phase should already have submitted their first Carbon Tax return to the SARS.

Intensive users of fossil-fuel based energy will be most affected by South Africa’s Carbon Tax Act. towards significant reductions in CO 2 emissions. To make a meaningful contribution in achieving a carbon-neutral economy, organisations need to take seriously their obligations to reduce emissions and examine greener approaches in their businesses. How do they do this when compliance seems like an abstract concept and the target of 2050 seems so far away? The kind of change required for meaningful compliance starts with quantification.

Meaningful change is measurable Once the emissions output is measured and tracked

In the first phase, direct emissions from the stationary combustion of fossil fuels (such as diesel generators) are taxable. The second phase will address scope two emissions (gases that escape through venting or from landfills) and the third phase will address indirect emissions. Waste, agriculture, forestry and other land-use sectors have been excluded from liability in the first phase, as has electricity utility Eskom. It is Eskom’s exclusion together with the tax-free allowances contained in the act that have cushioned the financial impact of the carbon tax for many intensive energy users thus far.

Electricity + Control APRIL 2021

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