Finance Minister Mboweni’s supplementary budget speech on 24 June implied that the obligation for companies in terms of the Carbon Tax will not go away, as he did not mention any further postponement regarding the deadline for Carbon Tax payment, which therefore remains 31 October 2020.

Moreover, on 19 June, official publication of regulations have closed the Carbon Tax Act’s three remaining gaps, related to the Trade Exposure- and the Performance allowances, as well as to the Renewable Energy Premiums for different types of renewable energy sources.

Specifically, companies that have implemented measures to reduce greenhouse gas emissions during the first carbon taxperiod (1 June 2019 – 31 December 2019) should reassess the amount of Performance Allowance as the industry benchmark values have been amended for nearly all sectors and sub-sectors and some have been added for the quicklime, aluminium, and ceramic tile sectors respectively.

In respect to the Trade Exposure allowance, National Treasury has responded to the request for publication of the trade and production data per sector, which aids the determination of the trade intensity calculations. The level of allowances for the different sectors remain largely unchanged (apart from tobacco-products and man-made fibre sectors).

Section 6(2)(c) is only applicable to emissions related to the generation from fossil fuels for which the Notice, as of 19 June, has specified the Renewable Energy Premiums for different types of renewable energy that may be deducted from the total taxable emissions.

This means that companies that are in the process of establishing their carbon tax payable, must consider these gazetted versions to assess the applicability thereof and if so the extent of the allowance.
As of 19 June 2020, the Carbon Tax Act, including supporting regulations are finalised.

If you would like more information on these updated Regulations or require assistance with carbon tax calculations, please contact Silvana Claassen or Teegan Govindasamy at Climate Neutral Group. For a full overview of the Carbon Tax Act can be found on the National Treasury website by clicking here.