Sasol Climate Change Report 2023 - Book - Page 65
INTRODUCTION
TRANSFORMING FOR RESILIENCE
GOVERNANCE
CLIMATE ADVOCACY AND POLICY
DATA AND ASSURANCE
REGULATORY DEVELOPMENTS
Global
Sasol attended the 27th COP of the United Nations Framework
Convention on Climate Change (UNFCCC) in Sharm el-Sheikh,
Egypt. Being an African COP, financing was a key issue, in
addition to focusing on shifting the global community from
mitigation pledges to implementation at scale and on time.
Financing: Parties agreed to explore reforms to multilateral development
banks and other financial institutions to help stimulate more investment in
low-carbon and climate-resilient infrastructure. Parties decided to continue
deliberations to set a 8new collective quantified goal on climate finance9 by
2024, considering the needs and priorities of developing countries. Sasol
welcomed the integration of developing economy views and the emergence
of innovative financing solutions to de-risk sustainability projects and
lower the cost of capital.
Loss and damage: This topic has been at the forefront of 20239s climate
negotiations, with the final outcome being a landmark agreement to
establish a loss and damage fund. The details of the agreement, such as
the amount of funding and the governance of the fund, will be developed
by a 8transitional committee9 to be put forward at COP28. Sasol has
responded to the call for greater greenhouse gas (GHG) reductions and
we are advancing our emission-reduction roadmaps towards our 2050
net zero ambition.
Article 6 negotiations: The Paris rulebook set out at COP26 was
hotly debated throughout COP27. Some Parties advocated for a nonstandardised reporting mechanism for emissions trading and controversy
surrounded the rushed definition of carbon removal. While some concerns
remain, overall Sasol was encouraged by the robust negotiations to ensure
establishment of a credible global carbon trading system. We believe this
could lead to greater global mitigation ambitions.
United States
The United States legislative and regulatory landscape remains
fluid with several proposed measures, in various phases of the
rulemaking process, aiming to accelerate the clean energy
transition, reduce GHG emissions and increase ESG disclosure
requirements, and appropriations to disadvantaged
communities.
Sasol complies with applicable laws and regulations and advocates
science-based government policies aimed at accelerating deployment of
clean manufacturing technologies and promoting the adoption of
emission-reducing solutions.
Recent federal government climate policies such as the 45Q tax credit
expansion, Energy Act of 2020, Infrastructure Investment and Jobs Act
of 2021 (IIJA), the Science Act of 2022 and the Inflation Reduction Act of
2022 (IRA) have the potential to create new opportunities and emissionreduction pathways across the chemicals value chain. Policies at the state
level hold similar potential.
We continue to evaluate collaboration and partnership opportunities with
our stakeholders as well as local and state partners to access available
financing. For example, the IIJA includes a programme to fund (up to
US$8 billion) the establishment of as many as ten Regional Clean Hydrogen
Hubs to expand the use of hydrogen in the industrial sector. Several
companies in Louisiana and Texas have submitted hydrogen hub
applications for the regional clean hydrogen hub funding opportunity,
with Sasol documenting its support as a potential off-taker of either hub.
Proposed amendments to the Securities and Exchange Commission (SEC)
disclosure rules to enhance and standardise requirements for
environmental, social and governance (ESG) disclosures, will make these
disclosures mandatory, with the new reporting standards needing to be
implemented on a short timeline. We are actively preparing for mandatory
reporting and will do so once implemented.
Just transition: The South African Just Energy Transition Investment
Plan was announced at COP27 by the Presidency and welcomed by the
International Partners Group (IPG). The plan details an investment
requirement of R1,48 trillion to achieve the lower end of the country9s
Nationally Determined Contribution (NDC) range to which the IPG9s
US$8,5 billion funding will contribute. We support priority being given to
decarbonising and transforming the grid and the focus on green hydrogen.
Guerbet alcohol plant, Lake Charles, Louisiana, United States
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