Gazetting of the Carbon Offset Regulations

The long awaited Carbon Offset Regulations were gazetted by National Treasury on the 29th of November 2019 in terms of section 19(c) of the Carbon Tax Act (Gazette No. 42873). Carbon offsetting is one of the allowance mechanisms under the carbon tax and an effective way for companies to pay less carbon tax. The Carbon Tax Act (Act No. 15 of 2019) was signed into law in May 2019 and came into effect from June 2019.

The National Treasury also published for public comment two further sets of regulations, namely the Draft Regulations for the Trade Exposure Allowance and Draft Regulations for the GHG Intensity Benchmarks. Written comments on these two sets of draft regulations must be submitted to by close of business on 17 January 2020.

Carbon Offset Regulations – key points

  • Inclusion of renewable energy
    • All small-scale renewable energy projects up to 15MW for both REIPPPP (from bid window 3, i.e. signed on or before 9 May 2013) and non-REIPPPP projects are eligible as carbon offsets;
    • For projects greater than 15MW, REIPPPP projects from the third bidding window and non-REIPPPP projects, except for technologies with a cost less than R1.09/kWh, will be eligible as carbon offsets.
  • Eligibility of energy efficiency projects
    • Only energy efficiency and co-generation projects which do not also generate thermal energy implemented on activities that are covered by the carbon tax resulting in reduced fuel consumption
  • Clarification of eligible projects and the use of credits generated prior to the implementation of the carbon tax
    • Projects and the resulting offsets issued up to 31 May 2019 will be eligible for offsets
    • Project activities that are covered under the carbon tax, these offsets must be used within the first phase of the carbon tax (up to Dec 2022), except for qualifying renewable energy projects
    • For project activities not covered by the carbon tax in the first phase, these offsets can be used until the end of the crediting period as stipulated under the relevant carbon standard;
  • Other Technical Amendments include the exclusion of temporary credits (tCERs), clarification that offset certificates are non-transferable, specifying the tax period for which the offset will be used, and that the offset certificate should be retained for the duration of the project or 15 years, whichever is longer

Steps carbon tax liable companies should take now

Due to the considerable tax savings to be had as well as the fact that offsets will need to be utilised by 30 June 2020 for the 2019 tax period, companies are advised to develop a carbon offset strategy that addresses the following crucial questions:

  • To purchase offsets, and save tax, or not?
  • If your company has already registered an offset project, are these offsets eligible for use?
  • Linking offsets to broader company objectives?
  • Linking offsets to CSI / social development programmes?
  • Purchasing a function of price and / or project type?
  • Who will manage this process (internally or outsourced?)
  • When to act?

You can read more about how companies can use carbon offsets to pay less carbon tax in the blog by our CNG SA Director, Franz Rentel, here and download the full offset regulations here.

Should you have any questions on these offset regulations, have already implemented a carbon offset project but unsure whether the offsets are eligible or you are ready to purchase carbon offsets from our diverse portfolio, please get in touch.

8 Good Reasons to Offset your Business Flight

Flying is sometimes unavoidable – especially when it comes to business travel. That’s why at Climate Neutral Group we have GreenSeat which assists companies in offsetting the carbon emissions of their air travel. Here are eight reasons that is a good idea:

1.It provides an alternative

Offsetting your company flights provides you with the alternative to not flying at all.

2.It reduces carbon elsewhere

In order to offset your flight carbon emissions your business can invest in emissions-reducing projects that avoid or reduce carbon elsewhere.

3.It doesn’t cost the earth

The investment associated with offsetting an air ticket is about 2-5% of the ticket price. For flights within South Africa this equates to the cost of a cup of coffee at the airport.

4.It’s only a click away

Ask your travel agent today whether they offer GreenSeat. If not, we can arrange it for them.

5.It raises staff awareness

By receiving an offset certificate every time they fly, together with the impact they made possible by supporting clean energy projects, your staff will gain a new appreciation for their climate impact and feel good about travelling on a GreenSeat.

6.It’s a good investment

Offsetting can help your business gain competitive advantage, build brand value, support your CSI policy, improve your BEE scorecard and encourage other emission reduction activities within your company.

7.It’s a powerful tool for sustainable development

By investing in clean energy projects, South African communities can be provided with affordable, reliable and low-carbon energy solutions.

8.It combats climate change

Winning the battle against climate change require the support and commitment of not only governments but also business.

More more information or to offset your business flights please contact

Climate Neutral Group to Offset Flights to World Economic Forum on Africa

When it comes to business travel, visiting congresses and going on holiday, flying has a climate impact. By offsetting your flight’s carbon emissions, you are able to mitigate your climate impact by promoting cleaner energy, enhancing ecosystems and improving the quality of life for vulnerable communities in developing countries.

That’s why, as carbon specialists who provide carbon offsetting services, we are very excited to be teaming up with the World Economic Forum on Africa taking place in early September in Cape Town.

We will be assisting the World Economic Forum by offsetting the flights of all of their employees to the event. We will also be offering the option to all delegates attending the conference to calculate the carbon impact of their air travel and offset it accordingly.

We have created a landing page and carbon calculator in order to enable this.

If you are interested in offsetting the carbon from your personal flights you can do so here. If you are interested in taking responsibility for the carbon impact of your work travels please contact us on

Discerning Offsetting: The Right Projects Can Take You from Carbon-Neutral to Climate+

Article by Sarah Leugers, originally published on Sustainable Brands on 21 June.

By making informed decisions on carbon credit selection, sustainability-minded companies can go beyond simply being carbon neutral — to inspire customers and employees alike with life-changing impacts.

What difference can carbon offsetting make for the planet, its people and your organization’s sustainability objectives? The answer is — a lot. But choice matters: Depending on which carbon credits you select, you may simply be compensating for your carbon footprint or — on the other end of the spectrum — helping drive development in vulnerable communities around the world.

For companies that are new to carbon offsetting, the range of carbon credits available for purchase can seem challenging to navigate. To ensure that the credits you purchase are from highest-quality projects, here are some practical questions to consider:

  • Is the project’s technology compatible with a decarbonized world — for example, not simply switching from one fossil fuel to another?
  • Did the project follow safeguards to mitigate any unintended negative consequences?
  • Have the developers engaged local stakeholders, and reflected their concerns and objectives in the project design?
  • Are the project’s claims around sustainable development or the Sustainable Development Goals (SDGs) measured, monitored and independently verified?
  • What is the economic value created by the specific project?

When projects follow these sorts of best practices, their impact can go beyond cutting carbon to delivering meaningful benefits for communities and ecosystems. This is we at what Gold Standard call Climate+ projects: those that make a positive impact for the climate, plus the broader SDGs.

But just how much impact? To respond to an increasing need to quantify the impact of investments made in sustainability efforts, Gold Standard commissioned an independent research study several years back to calculate the economic value of Gold Standard carbon credits issued from a variety of project types. A more recent study by Vivid Economics revisits these calculations with the latest data available and better geographic specificity, in a new report — Valuating the benefits of improved cooking solutions: Impact data in high resolution — released this month. The study concludes that for every carbon credit from a clean cookstove project, for example, $267 in shared value is created. For biogas, the average value created is $464 per credit. The report breaks down the details of contributions for healthecosystem conservationpoverty reduction and of course, climate protection.

These figures help organizations better understand the full impact of their carbon credit purchases. More than this, by delving into the benefit profiles of different project types, companies can choose projects that are not only high-impact, but align with their own sustainability objectives — from gender equality and clean water access to biodiversity conservation — as well as help meet net-positive goals.

By making an informed decision on carbon credit selection to support more ambitious projects, sustainability-minded companies can go beyond simply being carbon neutral. They can inspire customers and employees alike with life-changing impact — backed with quantified, verified data.

Gold Standard Offsetting Projects at Climate Neutral Group

At Climate Neutral Group, carbon offsetting services through a wide range of carbon offset projects with profound socio-economic impacts. The following projects are verified by Gold Standard:


Seaweed Pods, Anyone? Marathons Get Creative to Stop Littering the Streets

Written by Sarah Mervosh, originally published on New York Times on 30 April 2019.


Months of training. Miles upon miles of pounding the pavement. A careful calibration of diet, sleep and the perfect running gear.

It all ends with one race day. And so much waste.

Marathons and other high-profile running events often leave behind vast trails of trash, with plastic water bottles scattered in the streets and mounds of clothing left behind at the starting line. It can be an ugly sight, and over the weekend, the London Marathon made headlines for trying to address the problem by handing out biodegradable, liquid-filled seaweed capsules at one of its mile markers.

But as more and more marathons take steps to reduce their environmental footprint, you may be surprised to learn that the waste you see on the streets after races is not necessarily the biggest problem.

Here’s a look at how marathons are trying to shrink their environmental impact, and what runners and spectators can do to help.


While the bottles and cups that athletes toss in the streets during marathons seem like a problem, most races do a good job of collecting and recycling that litter, according to the Council for Responsible Sport, which evaluates the environmental and social effects of sporting events around the world and offers certification for those that adhere to best practices.

“No one likes to see a street full of single-use plastic bottles, but as long as that’s getting cleaned up and recycled, what makes that any different from you doing that in your home?” said Shelley Villalobos, the group’s managing director.

Recycling is a strong option, she said, and reducing the amount used is even better. Some marathons have gotten creative to try to limit their single-use plastic and other trash.

This year’s London Marathon, for example, reduced the number of plastic bottles by more than 215,000 compared with last year, by cutting the number of drink stations on the course to 19 from 26.

It was one of several steps the marathon took this year as part of a goal to send zero waste to landfills by 2020, and the marathon was still evaluating whether the pods were effective, according to the event director, Hugh Brasher.

In Connecticut, the Hartford Marathon Foundation worked with an engineering company to create a 40-foot-long drinking fountain for the finish line of its race. The contraption, known as the Bubbler, allows multiple people to drink at the same time and is estimated to have saved about 85,000 plastic bottles and wax cups since 2007, according to the foundation.

Some races also collect tossed clothing for donation and offer composting for bananas, apples and other post-race recovery food.

And what about those metallic blankets that runners wear at the end of races? Those can also be recycled. Heatsheets, a popular brand of the blankets, has a program to donate the used blankets to a company that makes wood-alternative decks and railings.


While N.F.L. games and other popular sporting events create enormous amounts of waste, marathons that snake through neighborhoods and past people’s homes are an in-your-face reminder of human consumption. “It brings it out onto the streets, literally,” Ms. Villalobos said. But perhaps their biggest environmental harm is something you can’t readily see: carbon footprint.

For one thing, races give away thousands of T-shirts and medals, which take up materials and energy to make and ship. “If they are over-ordered, that’s wasteful demand,” Ms. Villalobos said. “Is that any better or worse than having single-use plastic bottles and then recycling them?”

The Chicago Marathon, which is the only one of the world’s six major marathons that has been certified by the Council for Responsible Sport, offers participant shirts that are made from recycled material. The ribbon on the finisher medal can also be recycled, said the race director, Carey Pinkowski.

And the marathon starts and finishes in the same park, which reduces the need for driving on the day of the race. “The majority of our participants can walk from their hotel room,” Mr. Pinkowski said.

But there is still another problem: All the people traveling to the marathon. The world’s biggest marathons, including Chicago, New York and London, have upward of 40,000 runners, and many of them and their loved ones fly or drive to get there.

Climate Neutral Group, which helps organizations limit and offset their emissions, found that 97 percent of emissions from the Cape Town Marathon came from participants’ air or road travel. The marathon invested in local projects to offset those emissions and has been designated as “climate neutral” since 2014, according to the group.

One of the most effective things you can do to make a marathon more eco-friendly is to offset your own travel, Ms. Villalobos said. Some events, including a 10-mile race in Washington, D.C. that is scheduled for around when the cherry blossoms bloom each spring, offer the chance to buy carbon offsets during race registration.

Some airlines, including United and Delta, also offer options to donate money or miles to offset the greenhouse gas emissions from your travel.

“If they are coming from out of town and they are not planning on planting a few trees while they are in town, I’d say that’s probably the best thing they could do,” Ms. Villalobos said.

Climate Neutral Group can assist in making your event carbon neutral. Contact us on


3 Steps to a Climate Neutral Business

In 2018, the world’s leading climate scientists warned us that to avert climate change catastrophe we must cut global carbon emissions by 45% by 2030 and become climate neutral by 2050. In order to do this, government and businesses must make unprecedented changes to implement climate adaptation and mitigation strategies.

Becoming a business on a journey to climate neutrality is no longer a matter of simply “doing the right thing”. It has become a necessary way of future-proofing against environmental risks and threats that will negatively affect business and all people around the world.

Many places around the world are starting to declare a climate emergency whilst many large companies around the world are now addressing these threats by investing in short and long term strategies to mitigate environmental and social risk factors.

How to become a climate neutral business

1: Measure

Like a doctor measuring a patient’s pulse, establishing a baseline carbon footprint provides a valuable indicator of possible areas of where your business needs to improve. By identifying the internal carbon cost and the emission “hotspots” across your business, a clear climate strategy can be defined in order to reduce emissions and ultimately save money too.

At Climate Neutral Group, we use the footprinting software solution CO2management which allows you to set up and be in control of a standardised monitoring system to continuously measure and adjust your targets and strategy.

2: Reduce

Setting science-based targets provides companies with a clearly defined pathway to future-proof growth by specifying how much and how quickly greenhouse gas emissions will need to be reduced while ensuring transformational action is aligned with current climate science.

What is a science-based target?
A science-based target is a greenhouse gas emissions reduction target that is in line with the level of decarbonisation required to keep global temperatures below 2 degrees Celsius compared to pre-industrial temperatures, as described in the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC AR5).

Once science-based targets have been set, potential emissions reductions can be identified and a low-carbon transition plan can be developed.

3: Offset

Not all carbon emissions can be eliminated. The remaining unavoidable greenhouse gas emissions can be offset by financing cost-effective low-carbon energy projects which reduce emissions elsewhere.

By offsetting the impact of your business and purchasing the equivalent amount of carbon credits from certified offset projects, you are taking full responsibility for emissions that can’t be eliminated.

Carbon offsetting should not be the only step in a low-carbon strategy and should only be for the emissions that cannot be eliminated.

At climate Neutral Group, we have a number of offsetting projects worth supporting.

How Climate Neutral Group can Help

We are a leading carbon specialists providing carbon management and offsetting services, as well as being an established carbon tax consultant in South Africa.

Contact us to find out how we can assist to become a low carbon and climate neutral business.

How SA companies can use carbon offsets to pay less carbon tax

Written by Franz Rental, originally published on LinkedIn on February 20, 2019

Yesterday, 19 February, the National Assembly passed the long-awaited carbon tax bill, clearing a key hurdle in keeping the measure on track to enter into force 1 June 2019. The bill will now be submitted to the Council of Provinces before it is sent to President Ramaphosa to be signed into law.

Under the Bill, offsets can be used to help companies pay less carbon tax. And these savings can be considerable. Many companies, including the large emitters most impacted by the tax, are not aware that by using carbon offsets they can pay up to 20% less in carbon tax, while at the same time boost their Corporate Social Investment mandate.


The Bill will apply a marginal tax of R120 rand/tonne of CO2e on virtually all areas of South Africa’s economy, covering greenhouse gases sources from fossil fuel combustion, fugitive emissions, and industrial processes.

The levy will rise annually by 2% plus inflation until the end of the first phase in 2022, and then align with inflation after that.

However, emitters will initially face an effective tax rate of R6 – R48/tonne based on the suite of tax allowances available and the admissibility of offsets, with some companies able to reduce their tax burdens by as much as 95%.

Seeing that the effective tax rate is only R6 – R48 per tonne many people are under the false impression that offsets need to be priced under this rate in order to pay less carbon tax and therefore using offsets will hardly make a difference in reducing a company’s carbon tax.

But this is not the case, as I will explain below.


Carbon offsets, or carbon credits, from projects certified under the CDM, Gold Standard, and Verified Carbon Standard (Verra) will be allowed providing they meet certain criteria.

Some project types have been branded ineligible including HFC-23, N2O adipic acid, nuclear, CCS, and installations that have renewable energy generation capacity in excess of 50 MW.

The regulations also stipulate that projects can only be eligible if they don’t benefit from other government incentive programmes such as the Energy Efficiency Savings Tax Incentive (12L) or the Renewable Energy Independent Power Producers Procurement Programme (REIPPPP).

Carbon offsets generated by activities that are covered under the carbon tax are also not eligible. For example, if a company implements a project that reduces the coal use in their boilers the project activity cannot be registered as a carbon offset project for use under the carbon tax as this project will result in a company paying less carbon tax (i.e. to avoid double counting).


As mentioned above, the marginal tax rate is R120 / tonne, which means that for those emissions you are taxed on, you pay R120 / t. The effective tax rate is calculated if you divide the R120/t by the % allowances.

So for example, if your company has 1000tCO2 of process emissions you do not have to pay tax on the first 70% (tax free allowance) and therefore you only pay tax on 300t (this is your “taxable emissions”). This means you have to pay R36,000 in carbon tax (300t X 120/t).

The effective tax rate is then calculated as follows:

(R120 / 100) X 30 = R36/t.

This means you are paying R36 / t on the full 1000t (and R120 / t on the 300t). From 2022 the basic tax free allowance of 70% falls away, then you are paying R120 / t on the full 1000t.

In terms of offsets, using the above example, a company would be allowed to use 5% of the total 1000t in offsets (process emissions allows 5% offset use). This would be 50t. If this company buys offsets for, say R60, then they would save R60 / t (R120/t tax rate less R60/t offset price). Their carbon tax saving would be calculated as 50t X R60/t = R3000.

So if this company does not make use of offsets they would pay R36,000 in carbon tax. If they use offsets they only pay R33,000 (R36k – 3k). This is a saving of 8%.

As such it can be clearly seen that even though the company paid R60 / t for the offset (much higher than the R36 / t effective tax rate) they still saved carbon tax.

To conclude, as long as a company purchases offsets for less then the price of the marginal tax rate they will still pay less carbon tax.

Generally, how much carbon tax a company can save by using offsets will depend on:

  • price of the offsets – the lower the price, the higher the savings (but offsets are not free!)
  • percentage offset allowance – combustion emissions allow for 10% offset allowance – hence higher the savings compared to using 5% offset allowance for process and fugitive emissions
  • emissions profile – a company with mostly combustion emissions will save more carbon tax when using offsets compared to a company that has mostly process and/or fugitive emissions (this is due to the fact that combustion emissions have a 60% tax free allowance compared to 70% tax free allowance for process and fugitive emissions).

Due to the considerable tax savings to be had, and the fact that there will be more at least 5 times more offset demand than supply, carbon tax liable companies are advised to develop a carbon offset strategy that addresses the following crucial questions:

  • To purchase offsets, and save tax, or not?
  • Linking offsets to broader company objectives?
  • Linking offsets to CSI / social development programmes?
  • Purchasing a function of price and / or project type?
  • Who will manage this process (internally or outsourced?)
  • When to act?

Climate Neutral Group can help your company lower its carbon tax liability through a robust carbon tax offsetting strategy. We also have a large portfolio of eligible South African carbon offsets thereby maximising your carbon tax savings.

Two Important Dates Not to Miss in 2019

2019 is a landmark year for South Africa with Carbon Tax Regulations coming into effect by the middle of this year. Make sure you are in the know and stay up to date with the upcoming deadlines. If any of the following dates apply to your company, be certain to diarise them and start preparing to ensure you are ready when they do arrive.

31 March: Deadline for Mandatory Green House Gas Reporting

What is Mandatory Green House Gas Reporting?
The National Department of Environmental Affairs gathers information from businesses that have the capacity to exceed a certain green house gas emissions threshold. This is in line with international commitments to update and maintain a National Greenhouse Gas Inventory. At the same time this database provides SARS with information regarding carbon tax liable entities. The reports which are due by 31 March 2019, must be submitted in a prescribed format that differs from conventional corporate calculation methodologies such as GHG Protocol Corporate Standard and ISO14064.

Does it Apply to my business?
Companies are required to report if their installed capacity exceeds the applicable threshold for a specified activity. For example, for energy generation, this is typically 10MW total installed 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.

If you are uncertain whether you are required to submit a Mandatory Green House Gas Report, or if you would like guidance throughout the reporting-process, please do not hesitate to contact us.

1 June: Implementation of Carbon Tax Regulations

What are the Carbon Tax Regulations?
A carbon tax is a fee imposed on greenhouse gas emissions, caused by activities including the combustion of fossil fuels, emissions associated with certain chemical processes and fugitive greenhouse gas emissions. A carbon tax is globally recognized as a core policy-instrument for reducing and eventually eliminating the use of fossil fuels. Finance Minister Tito Mboweni introduced the Carbon Tax Bill in the National Assembly in November 2018 after a culmination of eight years’ worth preparing and stakeholder consultation processes. The bill which is aimed at reducing fossil fuel emissions in South Africa will come into effect on 1 June 2019. Businesses who emit beyond a certain threshold will be forced to implement greenhouse gas mitigation strategies, to engage with carbon offset solutions or pay the tax-rate at R120 per tonne greenhouse gas emitted.

Does it Apply to my Business?
Only companies who are required to submit a Mandatory Green House Gas Report will be liable for carbon tax. Companies that are liable can be awarded relief when purchasing carbon tax offsets. By doing so, a company can pay up to  20% less in carbon tax.

Our carbon tax solutions include a Carbon TaxScan which helps you measure and understand how much carbon tax your business might have to pay, a Carbon TaxCoach which helps your company lower its carbon tax liability, and a wide selection of South African Carbon Offsets.

Take a look at our Carbon Tax Q&A to find out more.

Owners of emission reduction projects with a hidden carbon component should act now to be able to meet the expected demand for offsets under the carbon tax. Do you have a project that you think could generate carbon offsets? Or do you have an existing (CDM) project that you are not sure whether you could trade the offsets under the carbon tax? Find out more about our carbon credit purchases and project development services.

Stay on top of your businesses’ role in these upcoming dates. Contact us to find out how we can assist to ensure that you comply with regulations and become a climate leader.


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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

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.