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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.

NO DOUBT

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.

FACTFILE:

  • 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 franz.rentel@climateneutralgroup.com.

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.

 

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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

Where:

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.

Conclusion

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 silvana.claassen@climateneutralgroup.com.

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

Original article was written by  Kelley Hamrick and Melissa Gallant.
Forest-Trends.org 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.

 

Africa sees 1st carbon neutral brewery amid climate concerns

Original article was written by Neil Shaw, associated press. 
Darling, South Africa — Jul 21, 2018, 5:24 AM ET, Click here to view full article.

A South African brewery is said to be the first in Africa to go carbon-neutral as more businesses across the continent adjust to climate change, and as consumers become more careful about the products they buy.

Darling Brewery, in a village near Cape Town, decreased its carbon footprint by using water and energy more efficiently — then brought it to zero in April by purchasing carbon credits at a reforestation project in Zimbabwe.

The brewery’s overhaul comes as South Africa’s Cape region emerges from an extreme drought that saw the city of Cape Town, population 4 million, rationing water and warning of a “Day Zero” when taps would run dry. The crisis has eased amid water conservation efforts.

“I don’t think a lot of people understand what carbon-neutral means or what impact all the businesses around us are having on the environment,” said the brewery’s owner, Kevin Wood. “The damage being done by climate change has a lot to do with our carbon footprint. Just look at the extreme weather here in the Western Cape.”

Greenhouse gas emissions have damaging environmental impacts such as global warming, acid rain and ozone layer damage, according to the sustainability consultant who conducted a greenhouse gas audit on the brewery, Andre Harms.

Darling Brewery was already known for raising environmental issues via the labels on the 17 beers it produces, educating drinkers about Africa’s threatened wildlife.

Now the labels tell drinkers about the brewery’s carbon-neutral status. “They’ll start connecting the dots and change their consumption habits to more environmentally friendly products,” Wood said.

Darling Brewery opened in 2010 as the craft beer sector exploded in South Africa. When the brewery opened there were 30 others and today there are around 215, according to beer journalist Lucy Corne.

She said craft brewery consumers are more likely to be aware of their carbon footprint than regular beer drinkers, as craft beer is a niche product that only South Africa’s middle class and above can afford.

“I think what Darling Brewery has done is really great for the industry,” Corne said, adding that the shift to carbon-neutral could get other breweries thinking about sustainability measures. “They’re leading the way.”

Globally there are only a handful of carbon-neutral breweries, experts say.

Sustainability consultant Franz Rentel confirmed that Darling Brewery is the first carbon-neutral one in Africa. He said he thinks more companies will follow its example.

South Africa will introduce a carbon credit tax by January, which will affect large emitters and is expected to make products from carbon-neutral companies “the cheaper option,” Rentel said.

As more countries put such taxes into place, large breweries could move toward carbon neutrality as well.

Darling Brewery’s brew master, Rene du Toit, said going carbon-neutral is not just about doing the right thing. “A lot of the measures you put in place to reduce your carbon footprint . make economic sense in the long run: You’re paying less for your water, you’re paying less for your energy, you’re putting out less solid waste.”

Sitting at one of Cape Town’s trendy bars, beer lover Nicole McCreedy said choosing to drink a carbon-neutral Darling Brewery beer is about supporting a progressive South African initiative.

“We’ll see far more of (that) globally, I hope,” she said.

Also interested to be a front-runner and make your products climate neutral? Contact us today via franz.rentel@climateneutralgroup.com and receive more information. We will be happy to assist you and walk this journey together with you.

 

Nishanthi Lambrichs, carbon advisor, carbon advisor south africa, carbon tax, climate neutral group, carbon tax, south africa carbon tax, south african carbon tax, implementation carbon tax, south africa carbon tax

CNG in the Event Greening Forum spotlights

The Event Greening Forum interviewed Nishanthi Lambrichs, CNG carbon advisor and Programme Manager for GreenDreams and GreenSeat. Both initiatives were developed by us to help the accommodation and the travel sectors, respectively, take action on climate change.

Q. WHEN AND WHY DID YOU, PERSONALLY, START TO DEVELOP AN AWARENESS ABOUT SUSTAINABILITY, AND A DESIRE TO CHAMPION IT THROUGH YOUR WORK?

Growing up in a country where it’s the norm to separate your waste, cycle everywhere and take public transport on a daily basis, creates a certain awareness for green living and sustainability. Moving to South Africa was a wake-up call in many ways. I worked in the event industry in the Netherlands and the sustainability aspects are important topics on the agenda. When I moved to South Africa, I realised that there is still a lot of work that needs to be done. This inspired me to get involved in the sustainability sector; help set the standard and raise awareness in order to create change.

Q. WHAT IS YOUR ROLE AT CLIMATE NEUTRAL GROUP SOUTH AFRICA, AND WHAT DO YOU LOVE MOST ABOUT IT?

I’m a carbon advisor at CNG and mainly focus on assisting companies within the hospitality industry to gain insight into their carbon footprint, enabling them to reduce and offset their emissions. Our GreenDreams initiative helps hotels, B&Bs and guesthouses in South Africa put measures in place to take responsibility for their environmental impact. [You can read an article on The Maslow’s success with this programme here.] I’m also responsible for GreenSeat: our carbon initiative for the travel sector (we would like to refer to it as the boarding pass to climate neutral flying). We offer several unique tools that help businesses measure, change and finally green their business travel habits.

And, last but not least, there’s Climate Neutral Events. The first step we take to create a carbon neutral event would be to get insights into your event’s carbon footprint in order to set a baseline. The second step is to set targets and reduce your carbon footprint. And, because we, unfortunately, can’t reduce the footprint to zero carbon emissions, investing in offsets is a great way to reduce your climate impact. Assisting companies during this journey and making this world a little greener is what motivates me to go to work every morning.

Q. DOES CLIMATE NEUTRAL OFFSET ITS OWN CARBON FOOTPRINT, AND IF SO, HOW? 

Yes, we do offset our own carbon footprint with a basket of various Gold Standard projects: Biogas Tanzania, Kenya and Cambodia.

Q. DO YOU HAVE A FAVOURITE CARBON OFFSET PROJECT YOU’D LIKE TO TELL US ABOUT?

There are currently two projects within our portfolio that I really like. The Wonderbag and, our latest addition, Boreholes in Africa. The Wonderbag is a non-electric heat-retention cooker that allows food that has been brought to the boil by conventional methods to continue to cook for up to 12 hours without using additional energy usage. The Wonderbag offset has significant sustainable development benefits. Firstly, the program creates employment in South Africa, where the bags are used in large numbers. Secondly, field surveys indicate that users of the bags have reduced fuel bills and finally, there is published evidence that reduced consumption of fossil fuels drives down illnesses caused by fumes, smoke, and soot.

The Boreholes in Africa initiative operates in Uganda, Rwanda, Malawi, and Eritrea. Here, like anywhere else in the world, clean drinking water is vitally important. Offsetting 1 tonne of CO2 translates into 1.405 litres of clean drinking water for rural households. I think this is a great offset project, especially since access to water is one of the highest threats climate change poses.

Q. IF YOU COULD WAVE A MAGIC WAND AND CHANGE ONE THING ABOUT THE SA EVENTS INDUSTRY TO MAKE IT MORE SUSTAINABLE, WHAT WOULD THAT ONE THING BE?

I find it difficult to pin this down to just one thing, as there are still so many aspects we need to work on. Education and creating awareness for what we try to accomplish is very important though. People need to get a better understanding of what will happen if we don’t take action because we are destroying our beautiful planet if we continue like this.

Transport is an important topic as well, especially since people in South Africa are so used to driving by themselves in their own car to events etc. Of course, safety is playing an important role in this, but organizing more shared transport for events would be a great start. On top of that a lot of people are flying in from different cities, therefore, it would be great to make flight offsetting the norm.

Personally, I’m big on plastic, we should really stop using it, and make conscious decisions to do so as event organizers. For example no straws, but supply bamboo straws instead. At the end of the day, it is better to start with something small, rather than doing nothing at all.

CNG partners with Confronting Climate Change

Working together to make agricultural value chains climate neutral

Climate Neutral Group (CNG) and Confronting Climate Change (CCC) have joined hands to assist South African fruit and wine farmers towards achieving climate neutrality for their products, including climate neutral wine. Through this collaboration, CNG and CCC offer a turnkey approach that turns challenges associated with climate change into opportunities for their clients.

Taking 100% responsibility

CCC helps South African fruit and wine farmers calculate and understand the carbon footprints of their operations and value chains by calculating the amount of greenhouse gas (GHG) emissions they generate per year and identifying key emissions sources. Typical GHG sources within agriculture include the use of agrochemicals, cooling, packaging, and freight as well as fuel consumption.

Through the implementation of new technologies and operational strategies, farmers are working hard at reducing the carbon footprints of their operations and/or products. Inevitably, some elements of a product’s carbon footprint are incredibly difficult and costly to eliminate. From here, the best and most cost-effective option is to offset these unavoidable emissions through the purchase of carbon credits from verified carbon offset projects. This allows farmers to take 100% responsibility for their environmental impact whilst labelling their product “climate neutral”

Climate Neutral Guaranteed

Gaining momentum across Europe’s food and beverages sector, Climate Neutral Group’s Climate Neutral Guaranteed standard and associated climate neutral logo ensure that the steps taken by businesses towards climate neutrality have been tested against strict international criteria.

The Climate Neutral Guaranteed standard helps businesses to efficiently and clearly communicate their climate leadership role to consumers, suppliers, partners, and other stakeholders. This is critical in fostering a new generation of socially, environmentally, and economically sustainable businesses.

CLICK HERE TO DOWNLOAD THE FACTSHEET ABOUT OUR EXCITING PARTNERSHIP!

Please contact Anel Blignaut (Blue North Sustainability) or Franz Rentel (CNG) for more information.

Research debunks carbon offsetting myths

What are the main myths are carbon offsetting? The Unlocking Potential/State of the Voluntary Carbon Markets 2017: Buyers’ Analysis has listed four of them and proceeded to debunk them.

CARBON OFFSETTING MYTH 1: Companies that buy offsets are just buying their way out of their obligations.

Our research shows the opposite: companies are purchasing offsets as one of many ways to fulfil their carbon reduction obligations. Those companies that do buy offsets are doing so as part of an overall carbon management strategy and they mostly use offsets to tackle emissions they can’t eliminate internally. Some companies, like Disney and Microsoft, have created an internal “price on carbon,” where the company charges itself for every ton of carbon it produces and uses that income to purchase offsets. The idea is that incorporating carbon into the company’s bottom line will focus attention on emissions and accelerate reductions.

MYTH 2: Offsets don’t represent real reductions. 

In the early days of carbon markets in the early 2000’s, voluntary offset quality was a mixed bag—some projects were well-planned and some were not. A few unscrupulous “carbon cowboys” made headlines after their offsets were found to be double-counted or illegitimate. But carbon markets have come a long way since then. Carbon standards require developers to demonstrate that their emissions are:

MYTH 3: Offsetting barely makes a dent—it’s not sufficient for the large-scale change we need.

This one might be sort of true, but that’s because offsets are designed to be part of an overall reduction strategy and not a substitute for one. Companies surveyed in the report typically offset less than 2% of their total emissions, usually because they’re using offsets to compensate for just one segment of that total, like employee travel or the carbon footprint of a single product. Even the small percentage, however, represents a tangible impact on the climate. As more companies sign on to initiatives like the Science-Based Targets or the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), the percentage of emissions they offset may go up.

MYTH 4: Offsetting is niche or arcane.

A lot of prominent brands use offsetting, including household names like General Motors, Delta Air Lines, and Microsoft, all of whom were among the top five buyers on the voluntary market in 2014.

Of the nearly 2,000 companies who publicly disclosed emissions data to CDP in 2014, 248 (17%) invested in projects to reduce carbon emissions outside of their immediate operations.

Of the 140 MtCO2e in offsets reported to the CDP, companies purchased nearly 40 MtCO2e (with the remaining companies either producing offsets for sale externally or offsetting internally within their supply chain). This is equal to the carbon sequestered by 1 billion tree seedlings grown over 10 years.

Would you like to know how to, incorporate Carbon offsetting into your business, contact Nishanthi on nishanthi.lambrichs@climateneutralgroup.com

Report: carbon offsetting benefits & drivers

Business Leadership on Climate Action: Drivers and Benefits of Offsetting, a 2017 report by the International Carbon Reduction & Offset Alliance (ICROA), looks at the demand for carbon credits, explains what drives businesses to offset their emissions, and goes into the various carbon offsetting benefits for companies in South Africa and beyond. A summary of the report is found below.

ICROA: Understanding Business Leadership on Climate Action

More can be done to increase action on climate change and close the gap on the global goal of a two degree limit. There is a disconnect between where science says we need to be and how far the Paris Agreement will take us, and the voluntary carbon market is crucial in bridging that gap.

This report considers the current demand for carbon offsetting, what drives businesses to use it as one of its solutions to climate change, and what the benefits are.

Its findings were taken from responses to a survey developed by Imperial College London in consultation with the UNFCCC and ICROA and conducted among respondents across a wide range of sectors, including private, public and non-profit / NGOs.

Putting it all together: recommendations

Based on the report’s key findings, the following recommendations can be put forward to further promote the uptake of offsetting as a solution to bridge the ambition gap on the global goal of a 2°C limit:

1. Carbon offset projects make a valuable contribution to the reduction of GHG emissions. Better recognition of this contribution would demonstrate the value to companies in meeting their climate goals and motivate more businesses to invest in voluntary offsetting. Additionally, this research shows that:

  • There is a positive correlation between knowledge of the voluntary carbon market and confidence in its effectiveness to reduce GHG emissions. A broader understanding of the market from the corporate world would help grow demand
  • Better awareness of the role of offsetting within the carbon management plans of climate leaders would also increase demand

2. Offset buyers should measure their return from investing in voluntary carbon offset projects. 49% of respondents in this survey said they have experienced tangible benefits from voluntary offsetting, though in most cases these benefits are not being measured. Better data on these benefits would help build the case for companies to take voluntary action

3. Demonstrating co-benefits, in addition to carbon mitigation, will increase the return on investment. In turn, this will increase the willingness to invest in voluntary offsetting

This article was published on www.icroa.org.


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