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South African govt proposes painful penalties for emitters that exceed carbon budgets

Original article was written by Mike Szabo  Carbon Pulse,
00:33 on November 30, 2018  /  Last updated at 01:07 on November 30, 2018

Companies that exceed their emissions limits set under South Africa’s upcoming climate laws will be forced to pay a penalty of at least five times the country’s carbon tax.

According to consultancy EcoMetrix Africa, the South African Treasury has floated a plan that would levy a penalty rate of 600 rand/tonne ($43.30) for emitters who surpass their company-level carbon budgets. The penalty is well above the R120 base rate of the country’s pending carbon tax.

South Africa is aiming to harmonise the tax with its proposed carbon budgets for the country’s top emitters, with both sets of proposed measures set to become law next year.

The country’s long-awaited carbon tax is scheduled to be implemented on June 1, 2019, with the carbon budgets imposed under a separate climate change bill starting out next year as voluntary before being made mandatory after 2020.

The budgets will feed into sectoral targets that will help South Africa meet its Paris Agreement pledge to peak its GHGs in 2020-2025, plateau them for a 10-year period from 2025 to 2035, and then cut them from 2036 onwards.

The carbon tax’s launch has been delayed by five months to allow the government to explore what level of penalty would help align the levy with the budgets.

Under the tax, emitters will face an effective rate of R6-48/tonne based on the suite of exemptions, or “allowances,” available and the admissibility of offsets, with some companies able to reduce their tax burdens by as much as 95%.

Carbon Pulse was unable to independently verify the Treasury proposal, but it’s understood that companies that exceed their budgets would face a R600/tonne penalty rate and, according to a separate annexure to the draft carbon tax bill introduced last week, no tax-free allowances would apply.

“This interface option will help to ensure a credible price signal to encourage behaviour change over the medium to long term, emission reduction certainty through a carbon budget, and provide the required regulatory policy certainty,” added the document published Nov. 21.


EcoMetrix Africa said officials speaking at a workshop held by the government’s Standing Committee on Finance confirmed that the draft carbon tax bill would be finalised on Dec. 5.

“From the onset it was made clear that there should be no doubt, this bill is going to happen,” the firm said.

“The political drive government demonstrated during this workshop to pass the bill is very strong. The time to act has come for any company that wants to manage and mitigate its exposure under the tax,” added EcoMetrix partner Henk Sa.

The company expects the carbon tax law to be amended to reflect the penalty rate only after the climate change bill has been approved by parliament.

The tax bill’s introduction came a week after the Treasury published new draft regulations to govern the use of offsets against the levy.

The changes are now open for public comment until Dec. 14.

Under the tax bill, companies have an offset usage limit of 5% or 10%, depending on the sector in which they operate.

Sa said he anticipates an over-the-counter (OTC) offset market to develop in the country in the first half of 2019, ahead of the start of the tax.

The proposed rules allow credits from projects certified under the CDM, Gold Standard, and Verified Carbon Standard – now known as Verra – to be used so long as they were generated in South Africa.

The carbon offset system seeks to encourage emission reductions in areas that are not directly covered by the tax, with investment in public transport, agriculture, forestry, and other land-use and waste sectors to be eligible.


  • A national carbon tax was first suggested by South Africa in 2010, a year before it hosted the annual UN climate talks. But progress has been slow, with the government only publishing the first draft in Nov. 2015.
  • The tax will affect virtually all areas of South Africa’s economy, covering most stationary and non-stationary sources and applying to fossil fuel combustion, fugitive emissions, and industrial processes.
  • Waste, agriculture, forestry, and other land-use sectors are exempt from paying it or performing MRV until 2022 due to the difficulty in accurately measuring output from those sources.
  • A basic tax-free allowance of 60% is offered to all emitters, with an additional 10% for having process or fugitive emissions.
  • Another variable allowance of up to 10% is available for trade-exposed sectors, with an additional 5% available for above-average performance relating to sectoral benchmarks.
  • Beyond that, a further 5% can be applied by companies who have developed an annual carbon budget and report it to the government.

At Climate Neutral Group we can assist you to gain more insights in your carbon tax liability. We offer a full range of services from advisory to carbon offsets.  Contact our carbon tax specialist Franz Rentel for information

Tito Mboweni introduces Carbon Tax Bill

Finance Minister Tito Mboweni introduced the Carbon Tax Bill in the National Assembly on Tuesday, marking the culmination of an eight-year process of preparation and consultation with stakeholders.

The tax is due to take effect from June 1 2019, and while parliament’s finance committee expects to process the bill before the end of the year, it does not envisage voting on it before parliament rises in early December for the recess.

A number of tax-free allowances will apply during the first phase of the carbon tax and will be capped at 95%. An initial headline tax rate of R120 per tonne of carbon dioxide equivalent, and various tax-free allowances, will result in an effective tax rate that will vary between R6 and R48 per tonne.

Mboweni said in his speech introducing the bill that it would benefit all South Africans and was SA’s contribution to the world.

“Climate change poses the greatest threat to humanity and SA intends to play its role in the world as part of the global efforts to reduce greenhouse gas emissions. This enables SA to be considered among the positive nations of the world.”

He noted that the process of preparing the bill dated back to 2010 when the carbon tax discussion paper was published. This was followed in 2013 by the carbon tax policy paper; the 2014 carbon offsets paper; the 2015 carbon tax bill; and the 2016 draft regulation on carbon offsets.


The long-awaited updated carbon offset regulations have been published

The Minister of Finance recently announced the implementation of the carbon tax effective from 1 June 2019. The Draft Carbon Tax Bill makes provision for a carbon offset allowance which provides flexibility to firms to reduce their carbon tax liability by either 5 or 10 per cent of their total greenhouse gas emissions by investing in projects that reduce emissions elsewhere in South Africa.

Following the publication of the Carbon Offsets Paper in 2014 and the Final Carbon Tax Bill in December 2017, the National Treasury today published the new updated (second) Draft Regulation on the Carbon Offset. The Draft Regulation on the Carbon Offset sets out the eligibility criteria for offset projects, and details on the administration and procedure for claiming the allowance.

Click here for the Draft Bill and the the Explanatory Note to the Draft Regulation on the Carbon Offset.

Public comments can be made until the 14th of December 2018.


Let’s get more job-intensive, less carbon-intensive

Published on Fin24 on Oct 02 2018 20:15, written by Louise Naude.

Growth in South Africa’s GDP has stalled, yet significant opportunities to drive a deep and sustainable economic turnaround could be missed if we don’t pay attention.

Initiatives spearheaded by the Presidency, including the Jobs Summit this week, the Investment Summit later in the year, and the recently announced stimulus package are an opportunity to re-orientate the economy to deliver reduced inequality, create jobs and livelihoods, and advance industrialisation, while dealing with the geophysical and socio-economic implications of climate change.

The era of policy making with a blind spot around climate change must be brought to a close. We don’t have the money or time to waste on perversely locking the economy further into a carbon-intensive and climate-vulnerable path.

The Jobs Summit takes place on the eve of the release of the Intergovernmental Panel on Climate Change’s Special Report on Global Warming of 1.5 °Celsius on 8 October. Economic modelling in a publicly leaked draft of the full IPCC Special Report shows that the dangers for economic growth, particularly in developing countries, are significantly greater at average global warming of 2°C than at 1.5 °C.

If the greenhouse gas emissions produced by human activity continue on the current trajectory, warming is set to exceed 3°C, by far surpassing the abovementioned 1.5 °C by about 2040. Yet, if we act swiftly and together to make far-reaching changes to be globally carbon neutral by 2050, we can still keep warming below 1.5 °C.

The longer we take, the harder it will be, and the worse and more irreversible the implications.

South Africa will increasingly face trade impacts due to reduced demand for, and trade barriers against, our high-carbon and carbon-intensive exports, such as thermal coal, locally produced iron and steel, and combustion-engine vehicles. Already, the European Union requires a binding reference to the United Nations Paris Agreement in its trade deals.

Redirecting fossil fuel subsidies is an obvious way to start stimulating the emergence of a low-carbon economy and provide for social protection of affected workers. In the liquid fuels sector alone, South Africa’s fiscus hands fossil fuel producers between R6.4bn and R28bn per year, and forgoes between R35m and R4.7bn revenue through indirect subsidies.

This excludes the price support received by Sasol via the regulated fuel price. That’s the President’s stimulus package pretty much funded right there, without having to take monies from education, health, social grants and the like.

Cutting coal is central to a climate solution in the country and globally, and re-skilling and re-deploying workers in high carbon-emitting sectors is critical. We should guard against a new economic path being shaped by the perspectives of carbon-causing companies serving their special interests behind a smokescreen of overnight job losses.

An article published on Fin24 reports that South Africa’s Standard Bank and multinational Standard Chartered Bank have adopted policies to stop funding any new coal-fired power plants. Lower investment risk is starting to swing away from carbon-intensive to lower carbon, and a tipping point will leave the country and investors with stranded fossil fuel assets and business models, and accelerating job losses.

Both the science and economic trends are clear that climate action is urgent. All government programmes and expenditure, including the President’s stimulus package, should pull in a low-carbon direction, and private investors and lenders would be well advised to do so too.

Not to do so is perverse, shoring up economic and business models that undermine development.

The required profound decoupling of development from fossil fuels and other causes of emissions opens up the opportunity to address other deep-seated systemic features of South Africa’s economy. However, there is no guarantee that a transition to a low-carbon economy will do so unless explicitly managed by a developmental state, and driven by businesses and labour with foresight. WWF advocates a Just Transition Taskforce spearheaded by the Presidency, and housed within The National Economic Development and Labour Council (Nedlac).

The flip side of a necessary winding down of the role of fossil fuels in our economy will be the opportunities to be found in a low-carbon economy, which is where the greatest potential for economic development and exponential returns on investment off a low base lie. Decisive and swift action in this direction can create a competitive advantage for South African businesses ahead of the pack.

Here are a few ideas:

•  Focus on the growing market for metals and minerals necessary for manufacturing ‘clean’ technologies.

•  Beneficiate minerals used to make electric and hybrid vehicles, and localise the assembly and manufacturing of these vehicles.

•  Localise production of water treatment and water conservation technologies.

•  Re-use industrial and household waste as inputs for manufacturing. (Moves to formalise waste economies must involve informal waste workers.)

•  Adopt climate-smart agricultural crops and practices which conserve soil carbon and reduce water use, to expand food security and rural livelihoods.

Certainly, cutting coal is central to a climate solution in the country and globally, and fortifying workers in high carbon-emitting sectors, is critical. A Nedlac task team on the carbon tax is focusing on plans for the workforce and businesses in exposed sectors.

We should guard against a new economic path being shaped by the perspectives of carbon-causing companies serving their special interests behind a smokescreen of overnight job losses.

But a fixation on a fossil fallout means we are not facing forward to greenfield job creation and intensification, and risk keeping the economy stuck in the doldrums as the world passes us by.

The workforce must be skilled in anticipation of participation, job creation must be decent, women’s under-employment can be addressed, job-intensive business models need to be pursued. The Jobs Summit needs to build climate considerations into all job creation and investment initiatives. The Summit’s agenda is to align efforts of every sector and every stakeholder behind the imperative of job creation – let that be climate-smart job creation within a just transition.

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Carbon Tax in South Africa – Not much time left to prepare …

Written by Silvana Claassen, Senior Carbon Advisor at Climate Neutral Group

National Treasury presented an update on the status of South Africa’s proposed carbon tax on 13 September during public hearings held by the Standing Committee on Finance. Since the release of the Draft Carbon Tax Bill in December last year, stakeholder comments have been collated and considered whilst final amendments to the proposed Bill are being incorporated. The Bill is now ready to be tabled and enactment is anticipated early 2019. It may be that the projected implementation date of 1 January 2019 is not feasible and might be postponed with a few months (given South Africa’s NDC commitments).

The NDC (Nationally Determined Contribution) is a key document outlining South Africa’s minimal commitments to the international community in terms of its contribution to the global effort to prevent greenhouse gas concentrations in the atmosphere exceeding levels that would cause irreversible and unsustainable impacts to the planet. The NDC is based on a number of elements: greenhouse gas emissions reduction targets; an emissions reduction trajectory; time frames; and a policy framework.

Historically, South Africa’s emission reduction trajectory has been relative to a business as usual scenario. But through the NDC, South Africa has moved away from this and adopted an absolute target framework, in accordance with a so-called Peak Plateau Decline (PPD) trajectory. “The time-frames within the PPD trajectory range are 2025 and 2030, in which emissions will be in a range between 398 and 614 MtCO2e” (South Africa’s NDC). To put in perspective: in 2016, South Africa’s annual emissions were 468 MtCO2e (Global Carbon Atlas).

The NDC presents a mix of measures to be deployed in order to achieve the stated pledges. Among the mix of measures there is the carbon tax, carbon budgets, the obligation for emitters to submit emission reduction plans and strategies, as well as mandatory reporting of annual greenhouse gases by companies exceeding pre-defined emissions thresholds. A number of these measures have already been promulgated and have allowed for government to gain thorough insight in South Africa’s sources of greenhouse gas emissions. In turn this insight has enabled the development of an effective carbon tax proposition and the allocation of carbon budgets.

National Treasury and DEA have explicitly stated that in case the envisaged carbon tax implementation date of 1 January 2019 has to be moved, “it will not be moved too late given South Africa’s NDC commitments”. This is not surprising given that the NDC has laid down a five-year period, 2016-2020 to be specific, for the development and implementation of the proposed mix of measures. This is conforming the Paris Agreement timelines: coming into effect in 2020.

The carbon tax has been designed by taking into account a phased approach, so that companies that emit greenhouse gas emissions can take measures to start reducing their carbon footprint or making provision to utilise allowance-mechanisms such as offsetting. By not acting now, companies can face a situation where they will only be able to options available at the time of the carbon tax being fact: paying tax!

Please visit our page; Carbon Tax in a nutshell if you have any more questions about the carbon tax and click here for an overview of our carbon tax service offerings.

Why your energy project should consider the imminent carbon tax emissions market

Original article was written by  Jay Govender and Adriaan van der Merwe.
Cliffe Dekker Hofmeyr   South Africa September 3, 2018. Click here to view full article.

In 1997 South Africa became a party to the United Nations Framework Convention on Climate Change (1992) (Convention). Directed at regulating human conduct that causes the emission of gases responsible for climate change (so-called greenhouse gases or “GHG”), the Convention sets binding targets for industrialised countries to reduce their GHG emissions. The Kyoto Protocol (1997), adopted under the Convention, goes further and provides market-based mechanisms intended to assist parties in meeting emission reduction targets.

South Africa’s committed contributions to reduce carbon emissions and to meet its emission targets are set out in the Paris Agreement on Climate Change (2015), which comes into effect in 2020. At a country level the South African government has proposed the introduction of a carbon tax, coupled with carbon offsets, to meet these emission reduction targets.

Carbon Credits

The Kyoto Protocol provides three market-based mechanisms intended to minimise carbon emissions. One of these is the clean development mechanism (CDM). It allows industrialised countries with emission reduction targets to undertake GHG reduction projects in developing countries, and to generate Certified Emission Reductions (CERs). Often referred to as carbon credits, CERs can be traded on international markets and thereby used by industrialised countries to meet their respective targets under the Convention.

The procedure for issuing CERs was determined at the 7th Conference of the Parties to the Convention held at Marrakesh in 2001 (the so-called “Marrakesh Accord”). This established the CDM Executive Board and the rules for CDM. The Marrakesh Accord stipulates a procedure by which the CDM Executive Board ultimately approves (or rejects) a project and issues CERs.

It is a requirement that participating countries must identify a designated national authority (DNA), which must consider applications for CDM projects and certify that they comply with national laws and the international law requirements as part of the process for issuing CERs. South Africa has designated its DNA in regulations made under the National Environmental Management Act, No 107 of 1998 (DNA Regulations). The appointed DNA is the Director-General of the Department of Energy (DoE).

The DNA Regulations grant the DNA powers and impose on it various obligations. These include that the DNA is required to:

  • establish a process for CDM project approval;
  • consider project proponents’ applications and endorse that the project complies with international and national criteria for CDM projects; and
  • issue letters of approval to project proponents in respect of CDM projects that meet the international and national substantial development criteria.

Carbon Tax

Carbon tax is not a new concept in the South African energy industry, with the first explicit carbon tax introduced as far back as 2008 by way of an environmental levy on electricity generation from non-renewable sources above 5MW. This levy is still currently in place.

In 2015 Parliament tabled a draft carbon tax bill (2015 Bill), seeking to price carbon emissions in the form of a tax. The 2015 Bill was the predecessor of the current draft Carbon Tax Bill which was published in December 2017 (Carbon Tax Bill), and was open for public comment until 9 March 2018. In the 2018 budget, the then Minister of Finance, Malusi Gigaba announced that the Carbon Tax Bill would be implemented from 1 January 2019.

The Carbon Tax Bill aims to enable South Africa to meet its required contribution commitments as per the 2015 Paris Agreement on Climate Change, rewarding the efficient use of energy and reduction of greenhouse emissions. The Carbon Tax Bill is structured around the “polluter pays” principle to incentivise firms and consumers to proactively consider the cost of carbon emissions in their production, consumption and investment decisions.

The Carbon Tax Bill provides that carbon tax will be levied on a person that conducts an activity as published by the Minister of Environmental Affairs under the National Environmental Management: Air Quality Act, No 39 of 2004. Electricity production (combustion of fossil fuels, excluding the use of back-up generators) is currently listed as such an activity. The taxpayer of such carbon tax will therefore be the energy producer.

The Carbon Tax Bill proposes that the rate of carbon tax will be R120 per tonne of carbon dioxide. This will be subject to the applicable tax-free allowances as stipulated in s7 to s13 of the Carbon Tax Bill, which are limited to a maximum total allowance per listed activity. For example, in the case of the main activity being electricity and heat production, such as in the case of a coal power generation plant, these tax-free allowances include:

  • a 60% allowance for fossil fuel combustion;
  • a 5% carbon budget allowance; and
  • a 10% carbon offsets allowance (which is discussed in greater detail under Carbon Offsets below).

The maximum total tax-free allowance for electricity and heat production is 75%. This would mean that if the coal power plant in the above example utilise all available allowances, it will pay carbon tax on 25% of carbon dioxide produced.

A taxpayer’s carbon tax liability is calculated by reducing the tax base by the allowances provided for above, and then multiplying that amount by the rate of carbon tax. A simplified version of the formula is as follows:

X = (E – D – S) x (1 – C) x R


X = the amount of carbon tax;

(E – D – S) = greenhouse gas emissions as calculated per the provisions of the Carbon Tax Bill;

C = percentage allowances determined in s7 to s13 of the Carbon Tax Bill; and

R = rate of carbon tax.

According to the National Treasury and the South African Revenue Service, as set out in the Draft Carbon Tax Bill 2017: Response Document, the existing environmental levy for electricity generation is currently fulfilling dual objectives of promoting energy efficiency and indirectly pricing GHG emissions. The document states that to effectively price GHG emissions and to ensure that no double taxation occurs, a credit or reduction of the environmental levy for electricity generation is proposed to be implemented upon the introduction of the carbon tax.

Carbon Offsets

Draft Carbon Offsets Regulations (Regulations) was published on 20 June 2016 but apply to the 2015 Carbon Tax Bill. Updated regulations have not been published pursuant to the Carbon Tax Bill.

The Regulations aim to provide an offset mechanism where a carbon offset may be claimed to enable a reduction of carbon tax liability. An offset will be allowed to a taxpayer for CERs from the furtherance of an approved project. Approved projects include projects certified under the CDM, Verified Carbon Standard or Gold Standard verification mechanisms, or a project that complies with another standard approved by the Minister of Energy. The approved project must be a project that is wholly undertaken in South Africa, and in respect of an activity that is not subject to carbon tax.

An allowance for an offset that is carried on, on or after 1 January 2017 can only be utilised for a certain duration of time after the offset is generated, depending on the type of approved project. The Regulations define an offset as “a measurable avoidance, reduction or sequestration of carbon dioxide equivalent (CO2e) emissions in respect of an approved project”. For instance, a CDM project’s offsets may only be utilised for seven years, which period may be extended with two periods of seven years, or for 10 years (which period may not be extended).

The Regulations therefore allow a party to accumulate offsets from an activity that is not subject to carbon tax, which can then be used to reduce carbon tax liability for an activity which is subject to carbon tax. For example, carbon offsets earned under a renewable energy generation project can be used to reduce the carbon tax liability of a coal power generation plant, limited to the 10% carbon offset allowance set out in the Carbon Tax Bill.

Examples of activities that will accumulate carbon offsets include energy efficiency in the residential and commercial sector, energy efficiency in buildings, community-based and municipal energy efficiency and renewable energy, fuel-switching projects, and electricity transmission and distribution efficiency.

The explanatory note to the Regulations provides that it will have to be assessed whether carbon offsets will be traded via over-the-counter or auctioning methods, or even whether a South African trading platform will be established.

The Regulations, however, limit the projects that can accumulate offsets and specifically exclude projects that benefit from other government incentives, as this could lead to double counting of emission reduction benefits. Projects benefitting from the Energy Efficiency Savings Tax Incentive as well as projects with power purchase agreements under the Electricity Regulations on New Generation Capacity (New Gen Regs) -such as independent power producers under the Renewable Energy IPP Procurement Programmes (IPPs) – can therefore not accumulate carbon offsets that can be used to reduce carbon tax liability. Carbon offsets can, however, be claimed by other renewable energy generators that do not have power purchase agreements pursuant to the New Gen Regs.


What is evident from the above is that the intricate legal framework surrounding carbon emissions in South Africa will present a myriad of opportunities to contribute to emission reduction targets and create a market for carbon emissions. Electricity generators should therefore ensure that that they adequately position themselves so as to derive the maximum benefit from the proposed legislative interventions. Importantly, carbon tax risk should also be taken into account in the development of a power project attracting such tax.

At Climate Neutral Group we can assist you with the development of your carbon project. We guide project developers from the project’s inception stage to feasibility assessments, verification processes, and all the way the issuance of carbon credits. Contact our Senior Carbon Advisor Silvana Claassen for information

Climate Neutral Group once again ICROA certified

Climate Neutral Group, with offices in both Cape Town and Johannesburg, is the only Dutch carbon offset provider which is a member of ICROA. As such it is also the only offset provider in South Africa which is an ICROA member.

The ICROA Code aims to define international best practice for offset-inclusive carbon management and represents the minimum requirements that all ICROA members must meet. It is applicable to voluntary carbon management services provided by ICROA members and covers the following four areas; Carbon Footprinting, GHG emission reduction advice, Offsetting and Communication.

We are proud to announce that we once again succeeded our 2017 audit with a positive outcome. Here you can find our certificate and corresponding letter.
In summary, we commit to the following as an ICROA member:

• Perform carbon measurement in accordance with international standards (e.g. WRI/WBCSD GHG Protocols and ISO 14064)
• Encourage clients to set challenging targets to go beyond business-as-usual
• Encourage clients to assess emission reduction opportunities and prioritise cost-effective actions
• Use credible carbon credits in accordance with international standards and programs (refer to next section for list of permitted sources of carbon credits)
• Use third-party registries to retire and remove carbon credits used for offsetting
• Encourage clients to communicate their carbon status and footprints, including emissions associated with the organisation, product, service or event, as well as details about actions to reduce and offset emissions

As an ICROA member we commit to use carbon credits that are or will be validated, verified and registered under the Gold Standard, VCS and CDM standards. These standards offer you the security that our carbon offset projects are accurately monitored on an annual basis. Together with our ICROA membership, this ensures a portfolio of reliable carbon offset projects.

Comply or pay?

The second deadline for reporting your greenhouse gas emissions is steadily approaching (31 March 2019). Why wait until the beginning of the new year with collating your data? Why not put measures in place now? So that you can capture ánd manage the data required for your emissions reporting requirements.

But more importantly, why not ensure compliance nów and mitigate the risk of facing a R5 million penalty due to failing submission of information required by the National Greenhouse Gas Emission Reporting Regulations, that were promulgated on 3 April 2017.

The most important aspect of the Reporting Regulations is to assess whether or not the regulations are applicable to your business. This is determined by the capacity of your company to generate greenhouse gas emissions.

Should the outcome be that the Reporting Regulations are applicable to your company, a number of requirements must be met:

  • Firstly, you must ensure that your company, including all facilities where ‘listed activities’ are exceeding a pre-defined capacity threshold level, are registered within 30 days after the promulgation of these regulations (i.e. before 3 May 2017). If the regulations are applicable to your business and you have not submitted the required information to the Department of Environmental Affairs, you are committing an offence in terms of regulation 16 of the Reporting Regulations and could therefore face a 5 million penalty.
  • Secondly, relevant activity data must be collated for the reporting period (1 January up and until 31 December) to enable quantification of greenhouse gas emissions in accordance with the “Technical Guidelines for Monitoring, Reporting, Verification and Validation of Greenhouse Gas Emissions by Industry”.
  • Finally, you must submit the calculated quantities and activity data for all relevant facilities to the competent authority within the Department of Environmental Affairs before 31 March following the reporting year.

Climate Neutral Group is here to help you assess your reporting obligations and ensure compliance with the regulations. For more information visit our website, or contact me at 010 300 6015 or at

The Race to Net Zero

While many of the top 100 companies listed on JSE Limited are currently calculating their carbon footprints, this is just the tip of the iceberg. Before long, most companies will need to calculate, reduce and disclose their environmental impact as a regulatory requirement. – and not just as part of an energy audit. This will likely lead to organisations requiring a team of carbon footprint reduction champions.

It is ironic that technical people are mostly responsible for calculating carbon footprints, while commerce people are responsible for doing the audits. If we do not find a way to establish a common ground for those calculating the footprints and those checking them, we are setting ourselves up for failure.

The 11th annual Green Building Convention is one of the key annual events that is organised by the Green Building Council of South Africa (GBCSA) that acts as a check in and building of common ground for all major market players and advocates of the green building movement. This year the convention theme is: THE RACE TO ZERO. The focus will be on buildings that achieve net zero carbon emissions, as well as building with net-zero water, waste and ecological impact.

This is in line with one of the latest and most exiting initiatives of the GBCSA: the ‘Net Zero’ Programme. Imagine a world where the built environment does not simply minimize its impact, but achieves neutrality or positive carbon emissions (i.e. a building that absorbs more greenhouse gas pollution compared to what it generates)?
A Net Zero/Net Positive carbon building is a radical idea and is defined by the GBCSA as “Highly energy-efficient buildings, with remaining energy demand supplied by on-site and/or off-site renewable sources, or through offsets”.

However, the GBCSA’s Net Zero Certification Scheme goes one step further by rewarding projects for completely neutralising (Net Zero) or positively addressing (Net Positive) their environmental impacts. This is not only for carbon, but also for water, waste and ecology. Net Zero certification is awarded over and above any project’s Green Star certification.

Should a project make use of carbon offsets to help achieve net zero or net positive status, then only African offset projects that are registered under one of the international carbon standards, the Gold Standard (GS) or the Verified Carbon Standard (VCS) are be eligible. A building project and/or property developer that make use of offsets would also be able to strengthen its CSI mandate, depending on the type of offset project it supports.Just imagine the build environment and world that awaits us!

For help along your climate journey, get in touch or speak with us at the Green Building Convention, 3 – 5 October 2018 at the Century City Conference Centre in Cape Town.

Franz Rentel
Country Director – South Africa at Climate Neutral Group

Dr Marco Lotz
Nedbank Sustainability Carbon Specialist

Voluntary Carbon Market Insights: 2018 Outlook and First-Quarter Trends

Original article was written by  Kelley Hamrick and Melissa Gallant. Jul 27, 2018, Click here to view full article and download the report.

Since trading of voluntary carbon offsets first took off in the late 2000’s, voluntary carbon projects have helped to reduce, sequester, or avoid over 437.1 MtCO2e–equivalent to notconsuming over one billion barrels of oil. These projects are supported by companies, individuals and governments purchasing carbon offsets, whose growing demand resulted in a record-high of 42.8 MtCO2e retired in 2018.

Yet the carbon markets landscape is changing fast. New compliance markets, in the form of domestic carbon pricing schemes, international trading through the Paris Agreement, or the international airline industry’s CORSIA program, may generate unprecedented levels of demand for carbon offsets. How those markets are designed and implemented will determine whether voluntary carbon markets thrive, adapt, or diminish.

To reflect the rapidly changing carbon markets landscape this year, we are excited to announce our new mini-report, Voluntary Carbon Market Insights: 2018 Outlook and First-Quarter Trends, that examines the key trends that have emerged in the first quarter (Q1) of 2018. In this report, we present:

  • Key findings from the last decade of voluntary carbon project activity.
  • New insights about 2018 first-quarter trends of voluntary carbon offset issuances, transactions, and retirements.
  • Upcoming policy decisions that might radically change the voluntary carbon markets in upcoming years – including an extended analysis of CORSIA.