Sasol Climate Change Report 2022 - Book - Page 15
RISKS AND OPPORTUNITIES
INTRODUCTION
OUR FUTURE SASOL STRATEGY
GOVERNANCE
DATA AND ASSURANCE
RISK MANAGEMENT (CONTINUED)
Our risks
Sasol’s climate change risk analysis is informed by key risk drivers and responses:
Key risk drivers
Key risk responses
CLIMATE CHANGE GROUP
TOP RISKS
• Our ability to develop and
implement an appropriate
climate change mitigation
response
• Undertaking robust scenario analysis
• Undertaking assessments to understand emissions and monitoring
landscape to understand policy developments and target setting
• Enhancing transparency and disclosure
• Implementation of our decarbonisation approach, framed by our threepillar emission-reduction framework
Progressing our risk management efforts
Climate change mitigation and adaptation pressures present both risks and opportunities for our
business. Even though net zero and the need to achieve this goal is gaining momentum, considerable
uncertainty remains regarding the availability and maturity of technology and feedstocks to reduce
emissions, as well as the sequencing and timing of their implementation. This is the reality that we are
dealing with particularly for the post 2030 period.
Given these uncertainties, it is unlikely that our decarbonisation and transformation to a Future Sasol will follow
a linear path. Managing complex short-term risks will continuously be balanced with our assessment of long-term
risks. The Future Sasol strategy creates three interrelated, but distinct phases linked to the three-pillar emissionreduction framework (as shown below). These three phases have risks that we know of today that are being
considered.
RISKS ASSOCIATED WITH OUR POTENTIAL TRANSITION PATHWAY TO A FOSSIL-FUEL-FREE VISION
• Our ability to implement
adaptation responses
to ensure the long-term
resilience of business
operations
• Set a long-term emission-reduction net zero ambition by 2050,
with optionality in the decarbonisation pathway
• Increasing societal pressures
impacting market access and
product competitiveness
• Enhancing and implementing our adaptation response strategy
in a phased approach, focusing on at-risk operational sites
PHYSICAL RISKS
• Tropical storms
(hurricanes and cyclones)
• High rainfall
• Proactive adaptation responses based on downscaled modelling
• Business continuity plans
• Regional weather forecasts and warnings
• Tornadoes
• Existing facility-specific emergency and evacuation protocols
• High winds
People
SHIFT
2023
2025
2030
2035
2040
2050
• Proactive stakeholder engagement, policy advocacy and tracking
of the climate change landscape
• Engineering Design Standards catering for future projected weather
extremes
• Heatwaves
TRANSFORM
• Set interim targets including a 30% scope 1 and 2 emission-reduction
target by 2030
• Project designs that account for operating in extreme temperatures
• Severe lightning
REDUCE
Planet
FUTURE
SASOL
Profit
Our response aims to reduce our risk exposure
and maximise opportunities created in
alignment with our strategy, targets and
roadmaps as we transition towards net zero.
Decision-making is underpinned by our People,
Planet and Profit considerations and in this
way, we enable the proactive identification
of risks and management thereof. We see
opportunities in transitioning to a low-carbon
economy and are progressing our response
as a top priority to enhance shared value.
Potential
to secure
offtakers for
green hydrogen
production
in Sasolburg
Ability to
establish
strategic SAF
partnerships to
enable growth
Ability to find
flexible funding
alternatives to
support SAF
developments
Constraints on
electricity grid
infrastructure
and renewable
energy supply
chains
Ability to meet
Sasol 2.01 and still
decarbonise
Ability to secure
affordable
incremental gas
of 40 – 60 PJ/a
Acceptability of
gas as a transition
feedstock3
Ability to unlock
~6% sustainable
products through
the HyShiFT
project
Likely availability
of incentives for
green hydrogen3
Speed at which
IPPs2 can obtain
licensing for
over 600 MW
renewable energy
Ability to access
markets that can
afford to pay for
green hydrogen
products
Price uncertainty
of green
hydrogen and its
derivatives
Uncertainty of
price premium
for renewable
fuels
Technology
gaps remain
and integrated
technology
leadership
position are yet
to materialise
DAC technology
still not
economically
viable
Ability to safely
transport
hydrogen
Strengthening of
the grid for
additional
renewables
intake
The size of the
green hydrogen
economy to
absorb jobs
Affordability of
green hydrogen
Potential
technology
disruption
Sufficient feedstock
availability
Affordability of DAC
Rate at which
supporting
infrastructure is
developed relative
to green fuel
production
Recognition for use
of industrial fossil
CO2 post 2035 as a
sustainable
carbon source
Feedstock
competition for
sustainable
chemicals and fuels
production
Inability to place
all products
Market size
and growth of
green hydrogen
Structure of the
markets to
sufficiently
transform to use
green hydrogen
Ability to access
affordable
sustainable
carbon feedstocks
Product premiums
fall away too soon
Affordability of
DAC and
availability of
CCUS technologies
1. The Sasol 2.0 transformation programme was introduced to enable the business to become resilient, highly cash generative and able
to deliver attractive returns even in a low oil price environment.
2. Independent Power Producers.
3. Also applicable from 2025 through to 2040.
SASOL CLIMATE CHANGE REPORT 2022 14
