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Back You are here: Home Business Carbon Market South African carbon tax to start in 2015

Carbon Market

South African carbon tax to start in 2015

South Africa is set to impose a tax on carbon emissions from January 2015 onwards in a move to alleviate its contribution to climate change.

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The upcoming carbon pricing scheme will levy 120 rand ($14) per ton of carbon dioxide and is subject to a 10 percent increase every year for the first five years, reported Reuters.

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“To soften the impact, a tax-free exemption threshold of 60 percent will be set, with additional allowances for emissions intensive and trade-exposed industries,” said Finance Minister Pravin Gordhan during his 2013 budget speech to parliament.

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Industries to be subject to the carbon tax include electricity, petroleum, iron, steel and aluminum.

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Mr. Gordhan said the government will also support incentives to improve fuel refineries and biofuel production in order to accelerate the use of cleaner fuel in the country.

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The plan for the carbon tax comes in the midst of rising electricity tariffs and slow economic growth for the country, which has averaged just 3.3 percent over the next three years.

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South Africa is the largest emitting country on the continent of Africa and the 13th in the world, according to 2008 estimates by the United States’ Carbon Dioxide Information Analysis Center.

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For 2008, 85 percent of the country’s carbon emissions of 119 million metric tons were from coal while 11.6 percent were from oil. The remainder came from cement and natural gas and coke-oven gas.

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According to the Treasury, South Africa aims to reduce its carbon emissions by 34 percent by 2020 and by 42 percent by 2025.

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An updated carbon tax policy paper subjected for further public consultation will be released by the end of March. – EcoSeed Staff

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