SOUTH AFRICAN CARBON TAX

Turn carbon tax risks into innovation opportunities

The carbon tax was implemented in June 2019 and companies had to make payment of the first reporting period by 29 October 2020. The tax payment deadline for the 2020 reporting period is 29 July 2021.

Does your company understand how the carbon tax and its supporting regulations will affect your business in 2021? Have you allocated a budget for the tax? Are you aware that there are various allowances that could be applied to your company’s taxable emissions, thus lowering its tax liability?

If you are unsure of whether or not your business is liable for the carbon tax, missed important deadlines or would like to have an assessment of what your carbon tax liability may look like for the next few years, we can assist you.

2020 Carbon Tax Summary

FOR MORE INFO CONTACT:

Teegan Govindasamy | Carbon Advisor

Teegan works with companies to help them understand and furthermore minimise their carbon tax liability in South Africa.

DISCOVER OUR CARBON TAX SOLUTIONS:

MANDATORY GREENHOUSE GAS REPORTING


The South African Greenhouse Gas Emission Reporting Regulations came into effect in April 2017 with annual submission deadlines by 31 March. The greenhouse gas emissions reported by companies are used as a basis for these businesses’ respective carbon tax calculations.

Companies that exceed a certain activity level threshold, are required to submit emission data in a prescribed format. The calculations of the emissions must be done in line with Technical Guidelines published with the Regulations. Companies should note that the calculation methodologies in the technical guideline differ from the conventional corporate calculation methodologies as GHG Protocol Corporate Standard and ISO14064.

Carbon Market Business Brief – South Africa

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Carbon Tax Summary 2019

CARBON TAX SUMMARY 2019

IMPORTANT CONSIDERATIONS FOR BUSINESSES:


  1. Companies are required to report if they are above the prescribed threshold per emissions source. For example, for energy generation, this is typically 10MW total installed thermal capacity. So if your company has 5 X 2MW coal boilers or 10 X 1MW back up diesel generators, you are above the threshold and have to report.
  2. Only those companies that have to report their emissions to government have to pay carbon tax.
  3. Companies must report their GHG emissions for carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), sulphur hexafluoride (SF6), perfluorocarbons and hydroflurocarbons.
  4. Companies must report on all combustion, process and fugitive emissions. Emissions from most mobile combustion as well as emissions from purchased electricity and refrigerants is excluded.

IN SHORT


South African companies that exceed the thresholds specified for their sectors in Schedule 2 of the Carbon Tax Act are required to report their greenhouse gas emissions to the Department of Environment, Forestry and Fisheries by 31 March 2021. We can assist you with your firm’s entire greenhouse gas reporting process for this period.

CARBON TAX OFFSETS


You can reduce your business’ carbon tax liability even further by investing in carbon tax offsets from our eligible South African offset projects.

Companies that are liable for carbon tax payments are awarded relief when purchasing carbon tax offsets. By doing so, a company can reduce their carbon taxes by up to 5% or 10%.

Last but not least, our various carbon offsetting projects provide you with the opportunity to invest in affordable, clean and safe energy solutions in vulnerable communities. This helps you reach your corporate social responsibility goals.

ELIGIBILITY UNDER THE SA CARBON TAX


All of our carbon tax offsets are eligible for use under South Africa’s future carbon tax, as they are generated under the international carbon standards. These are the Gold Standard, the Verified Carbon Standard (VCS), and Clean Development Mechanism (CDM). All three standards are approved by the South African government.


IN SHORT


Investing in carbon tax offsets can be cheaper than paying carbon tax. Make sure that your company does not miss out on this additional tax relief measure.

MANDATORY GREENHOUSE GAS REPORTING


The South African Greenhouse Gas Emission Reporting Regulations came into effect in April 2017 with annual submission deadlines by 31 March. The greenhouse gas emissions reported by companies are used as a basis for these businesses’ respective carbon tax calculations.

Companies that exceed a certain activity level threshold, are required to submit emission data in a prescribed format. The calculations of the emissions must be done in line with Technical Guidelines published with the Regulations. Companies should note that the calculation methodologies in the technical guideline differ from the conventional corporate calculation methodologies as GHG Protocol Corporate Standard and ISO14064.

IMPORTANT CONSIDERATIONS FOR BUSINESSES:


  1. Companies are required to report if they are above the prescribed threshold per emissions source. For example, for energy generation, this is typically 10MW total installed thermal capacity. So if your company has 5 X 2MW coal boilers or 10 X 1MW back up diesel generators, you are above the threshold and have to report.
  2. Only those companies that have to report their emissions to government have to pay carbon tax in 2020 for the 1 June – 31 December 2019 period;
  3. Companies must report their GHG emissions for carbon dioxide (CO2 ), methane (CH4 ), nitrous oxide (N2O), sulphur hexafluoride (SF6 ), perfluorocarbons and hydroflurocarbons.
  4. Companies must report on all combustion, process and fugitive emissions. Emissions from mobile combustion (emissions from vehicle fleet) as well as emissions from purchased electricity and refrigerants is excluded.

IN SHORT


South African companies that exceed certain thresholds are required to report their greenhouse gas emissions before 31 October 2020. We can assist you with your firm’s entire greenhouse gas reporting process.

CARBON TAXSCAN


Our Carbon TaxScan helps you measure and understand how much carbon tax your business might have to pay. This is based on your most recent carbon footprint report, as well as relevant company emissions data and the most recent carbon tax regulations.

Please note that even if your company is already measuring its carbon footprint, this might not necessarily give you an indication of what your carbon tax exposure would be. This is because the calculation methodology for carbon tax liability differ from the conventional corporate methodologies as per GHG Protocol Corporate Standard and ISO 14064.

OUR CARBON TAXSCAN CONSISTS OF:


1. Determining which activities and/or processes that emit greenhouse gases within your operations will be carbon taxed;

2. Calculating your company’s estimated carbon tax liability, based on historic emissions. This process takes into account any applicable fixed tax-free allowances you would qualify for.


IN SHORT


Our Carbon TaxScan is the first step towards determining your company’s possible future exposure to South Africa’s carbon tax law.

CARBON TAXCOACH


After receiving the results of your Carbon TaxScan, we will help you apply these insights to reduce your future carbon tax exposure.

Should your business be carbon tax liable, then the next step is to identify ways to mitigate your carbon tax payments through variable tax free-allowances provided by the carbon tax regulations. This includes the use of carbon offsets.

This can be done with our Carbon TaxCoach, where we work together on a strategy for reducing your carbon tax exposure.

OUR CARBON TAXCOACH CONSISTS OF:


1. Calculating to what extent your company can reduce its estimated carbon tax liability. It does so by taking into account any applicable tax-free allowances your company would qualify for;

2. Developing a carbon offsetting strategy that addresses crucial questions, such as how and when to purchase which carbon tax offsets.


IN SHORT


Our Carbon TaxCoach helps your company lower its carbon tax liability through a robust carbon tax offsetting strategy.

CARBON TAX OFFSETS


You can reduce your business’ carbon tax liability even further by investing in carbon tax offsets from our eligible South African offset projects.

Companies that are liable for carbon tax payments are awarded relief when purchasing carbon tax offsets. By doing so, a company can reduce their carbon taxes by up to 5% or 10%.

Last but not least, our various carbon offsetting projects provide you with the opportunity to invest in affordable, clean and safe energy solutions in vulnerable communities. This helps you reach your corporate social responsibility goals.

ELIGIBILITY UNDER THE SA CARBON TAX


All of our carbon tax offsets are eligible for use under South Africa’s future carbon tax, as they are generated under the international carbon standards. These are the Gold Standard, the Verified Carbon Standard (VCS), and Clean Development Mechanism (CDM). All three standards are approved by the South African government.


IN SHORT


Investing in carbon tax offsets can be cheaper than paying carbon tax. Make sure that your company does not miss out on this additional tax relief measure.

Thank you for your interest in Climate Neutral Group’s Carbon Tax Fact Sheet. Please provide us with your name and email address in order to view the PDF.

This form collects your name and e-mail address, which allows us to add you to our newsletter recipient list. This means we can keep you up-to-date with relevant Climate Neutral Group info. I hereby accept that Climate Neutral Group collects my name and e-mail address.

Thank you for your interest in Climate Neutral Group’s Carbon Tax Fact Sheet. Please provide us with your name and email address in order to view the PDF.

This form collects your name and e-mail address, which allows us to add you to our newsletter recipient list. This means we can keep you up-to-date with relevant Climate Neutral Group info. I hereby accept that Climate Neutral Group collects my name and e-mail address.

Thank you for your interest in Climate Neutral Group’s Carbon Tax Fact Sheet. Please provide us with your name and email address in order to view the PDF.

This form collects your name and e-mail address, which allows us to add you to our newsletter recipient list. This means we can keep you up-to-date with relevant Climate Neutral Group info. I hereby accept that Climate Neutral Group collects my name and e-mail address.