Transcript financial results for the year ended 30 June 2011

National Treasury Carbon Tax Workshop
1 November 2013
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Confidential – not for further distribution
Sasol is committed to engaging in climate change policy
development for a transition to a lower carbon economy
To this end, an effective policy should:
• sufficiently take account of South Africa’s mitigation and socioeconomic challenges
• reflect the constraints of a transition to a lower carbon and climate
resilient South African economy
• be based on analysis that uses clear and accurate information
• effectively contribute to the reduction of GHG emissions
• consider South Africa’s international competitiveness
• achieve alignment between different policy instruments
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2
Confidential – not for further distribution
Sasol has substantially reduced its carbon footprint in
South Africa
GHG emissions (Mt CO2e)/calendar year
75
70
65
60
55
50
2000
2005
actual
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2010
without mitigation
3
Confidential – not for further distribution
carbon tax needs to be seen in the broader policy
context
instrument
Environmental
policy
National Climate Change Response White Paper
Fiscal policy
Carbon tax
Energy policy
IRP 2010 & IEP
International
negotiations
Durban Platform
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4
Confidential – not for further distribution
the current tax proposals are running ahead of the
broader climate change policy formulation
Draft carbon tax
draft policy document
policy document
White Paper
Gazetted
Mitigation
Potential analysis
Design appropriate
policy mix
Sector / company
Carbon budget
WHITE PAPER IMPLEMENTATION
COP21
Durban Platform finalised
COP17
Durban Platform agreed
INTERNATIONAL NEGOTIATIONS
2011
* Page 54 par 187
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2012
2013
2014
2015
5
Confidential – not for further distribution
fiscal instruments need to be specifically designed to
achieve the required mitigation outcomes
current proposal
Tax on all emissions with
discounts
Recycling options not
linked to mitigation
outcomes
Z factor incentivising low
carbon production – even
at cost of higher emissions
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requirements to align with budgets
Targeted measures aimed to ensure
meeting of DEROs
Taxes, incentives & investments
aimed at marginal tons of GHG
Measures to support meeting of
absolute emission targets
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this lack of alignment has consequences for Sasol and
industry
• conflicting policy outcomes create uncertainty and impact
negatively upon investment
• paying a carbon tax on emissions that cannot be mitigated
reduces capital availability for emissions reduction we can
achieve
• multiple carbon prices are being created in the economy –
IRP, DEROs and carbon tax
• increased administrative and regulatory complexity for both
companies and government
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8
we remain with a number of specific concerns
regarding the carbon tax policy
Confidential – not for further distribution
further careful analysis required
Analysis
• micro-economic impacts
• impact upon competitiveness
• impact upon households and labour market
energy sector regulated
Regulated
sectors
• no clarity on price pass-through
• tax effectiveness doubtful
electricity pricing
Energy price
impacts
• industrial competitiveness
• households
guiding principles for mitigation policy required
Policy certainty
• price certainty only provided to 2019
• future thresholds unclear
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thank –you
[email protected]
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