Sasol Climate Change Report 2022 - Book - Page 11
INTRODUCTION
RISKS AND OPPORTUNITIES
OUR FUTURE SASOL STRATEGY
GOVERNANCE
DATA AND ASSURANCE
RESPONDING TO STAKEHOLDERS ISSUES (CONTINUED)
ROLE AND AVAILABILITY OF GAS AS A TRANSITION FEEDSTOCK
Issue
Suitability of natural gas as part of a credible decarbonisation pathway remains a contested area, with
issues expressed relating to methane leakage causing higher warming in the short term and that building
new gas infrastructure risks locking-in emissions. Information was requested on our assessment of gas
and its affordability.
Response
Sasol recognises that the phasing out of gas production forms an important part of global commitments to net
zero. However, gas has a significantly lower-carbon footprint relative to coal. Although coal has a significant role
in our business today, we see an essential role for gas in the transition while green hydrogen and carbon capture
technologies are being advanced. In Sasol’s 2021 CCR , we undertook an analysis that showed the significant GHG
benefit we could realise through the use of gas, which is better than coal, taking a lifecycle view as shown below.
Lifecycle CO2e footprint of coal versus gas
60
CO2 footprint (MtCO2e)
50
40
30
20
10
0
Today
High gas LNG
High gas pipeline
Upstream extraction and processing
LNG storage and shipping
Pipeline
Process phase
Re-gasification
Gas liquefaction
We anticipate introducing LNG in incremental
amounts (~40 – 60 PJ/a) in a manner that allows
us to avoid potential infrastructure lock-in from
pipeline infrastructure, while maintaining plant
production at similar levels and a reduced GHG
emissions profile. We are also implementing a
gas sourcing strategy, aimed at diversifying
sources of gas to enable reliable and affordable
supply and a quick pivot to green hydrogen, once
cost-effective (see page 25). In parallel, we are
undertaking a number of proof-of-concept green
hydrogen projects to play an active role in bringing
down technology cost curves sooner, which
provides optionality into the future (see page
25 – 27). We also recognise that for the power
sector a renewables-dominated energy mix with
gas as a peaking fuel has been assessed to be the
least cost pathway for South Africa. In the coal-toliquid (CTL) sector, gas is a key substitute
feedstock to reduce process emissions in the
short-to- medium-term. Post 2030, our preferred
option is to pursue a fossil-fuel-free pathway (see
Sasol's 2021 CCR , page 13).
CLIMATE CHANGE GOVERNANCE DISCLOSURE
Issue
Response
Questions were raised on our shortand long-term climate-related
remuneration incentives and
assessments of Board competencies
relating to managing climate risks.
In updating our disclosure on how climate-related issues
have been integrated into our governance and management
activities, we have sought to provide information in support
of the latest guidance in the TCFD recommendations, IFRS Exposure
Draft on Climate-related Disclosures and the JSE’s Climate
Disclosure Guidance (pages 45 – 47 and IR page 58). Sasol has
also linked its ESG targets to pay, inclusive of climate change, with
a higher weighting of 25% relative to last year. Additional detail on
Board oversight and our executive remuneration metrics is provided
in this report in the governing climate change (pages 45 – 47)
and remuneration (page 48) sections.
UNCERTAINTIES REGARDING THE FEASIBILITY OF GREEN HYDROGEN AND ROLL-OUT OF NEW TECHNOLOGIES
Issue
Additional disclosure
requested on the risks
and response measures
related to the growth of
a green hydrogen
economy, roll-out of
large-scale renewable
energy, the
development of Direct
Air Capture (DAC) and
CCS technologies.
SASOL CLIMATE CHANGE REPORT 2022 10
Response
Progress is being made on the development of green hydrogen, generation
and storage of large-scale renewable energy and on emerging technologies, such as
DAC and CCS. We are also driving these developments through proof-of-concept
projects and investments in technology. Sasol is choosing not to be a bystander and
is playing an active role in bringing down technology cost curves. Additionally, we
have established a Corporate Venture Capital Fund to gain a competitive advantage
and access new innovative companies with cutting edge technologies (see page 36).
In addition, we support the development of low-carbon and zero-carbon
technologies by establishing and working with the Energy Council of South Africa
and other advocacy forums. While some emerging technologies are untested at
scale and not yet commercially viable, we remain optimistic about the opportunities
in each of our highlighted areas, given global investment and innovation. There does
however remain uncertainty on the nature, timing and costs of these technologies.
As a result, we have built in optionality for our post 2030 roadmap. For an update on
our research and development, investments into renewable energy, green hydrogen,
CCS and other technologies refer to pages 24 – 28.
