Sasol Integrated Report 2024 - Book - Page 29
INTRODUCTION
ABOUT SASOL
STRATEGIC OVERVIEW
BUSINESSES
ESG
REMUNERATION REPORT
DATA AND ASSURANCE / ADMINISTRATION
STRATEGY continued
Impact of carbon pricing and tax
on our business
A carbon price trajectory is developed and
used in testing individual project robustness
through our Group Economic Model.
SASOL INTEGRATED REPORT 2024
Explore alternative options
27
2
2030
Maintain with investment to transition
4
46
2029
Focus for investment and development
5
42
OVERALL ATTRACTIVENESS FOR INVESTMENT
>3
2–3
1,5 – 2
~1,5
APPROXIMATE
TEMPERATURE
TARGET (°C)
7
2028
Treasury announced South African carbon
tax rate (ZAR/tCO2e) before allowances
applied in nominal terms.
9
Sasol International Chemicals’ solutions – many based on our proprietary alcohol technologies – enhance efficiency, reduce waste,
and conserve resources. International Chemicals also offers its own customers, and ultimately end-users, optionality for
sustainable product selection ranging from biosurfactants to natural, palm-free options, to synthetic alcohols with lower-carbon
intensity. However, demand for these sustainable solutions may be impacted by customer and end-consumers’ focus on costs
and reluctance to pay premiums for them. With declining oil and liquid supplies in the Net Zero and Cooperative World scenarios,
the need for alternative chemical feedstocks increases, some of which are not currently available affordably, at scale. International
Chemicals engages with its customers and suppliers to understand these impacts and develop solutions. Generally, management
of climate change impacts are more robust in developed countries, where local support for recovery from adverse weather
impacts is stronger.
38
INTERNATIONAL
C HEMICALS
Megatrends like population growth, urbanisation and evolving middle-class needs drive global chemical demand in all scenarios.
In the Net Zero and Cooperative World scenarios, there is a stronger focus on material efficiency, sustainable feedstocks,
and product carbon footprint, which may change the ways we source and produce products.
Some issues that could change include
development of a regulated carbon tax rate
from 2030 to 2050 and company allowances.
Sasol is actively monitoring this space and will
build in information as it becomes available.
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These opportunities yield returns over the medium to longer term. Supportive policies and regulations are required, especially
to shape markets in the short to medium term. The Cooperative and Net Zero scenarios may face more competition for skills
and hardware.
Although the carbon tax rate is set to 2030,
external circumstances change, and it cannot be
assumed that the rate will remain unchanged.
2027
• Sustainable feedstocks and utilities reduce the carbon footprint of South Africa's value chain and create new revenue
opportunities, enhancing investor sentiment. In the Fragmented World, extra effort is needed to find supportive partnerships.
30
8
• FT technology licensing through international partnerships. The joint venture with Topsoe in Zaffra aims to be a key player in
SAF development, capitalising on international opportunities, partnerships and funding, while remaining resilient across scenarios.
Carbon budget penalty rates have been
indicated to apply only for emissions that
exceed the mandatory carbon budget from
~ 2025/2026 at a rate of R640/tCO2e, at
which point the carbon budget allowance
could fall away. The SA Climate Change Bill
was signed into law on 23 July 2024. Sasol
is monitoring the development of the subordinate regulations for future reporting.
2026
Sasol has competitive advantages including our unique FT technology, our market reach, our existing asset base and distribution
channels, an anchor demand for sustainable opportunities, as well as our spread of skills and capabilities. This provides a strategic
advantage for new emerging business opportunities. Some of these include:
95% of available carbon tax allowances
apply as per National Treasury’s October
2022 announcement indicating there
is no ‘sunset clause’ for the allowances
in the period to 2030.
6
NEW BUSINESS
BUILDING OPPORTUNITIES
Petrol demand is flat to declining across the scenarios until 2030. The most pressure is faced in the Net Zero and Cooperative World
scenarios where global cooperation boosts electric vehicle adoption and charging infrastructure. Diesel demand stays strong in all
scenarios to 2030 and beyond, given the country’s infrastructure challenges. Our South African chemicals are exported globally and
are impacted by similar trends to those listed in the International Chemicals section. Examples of product uses include comonomers
for solar panels, food-grade waxes for packaging and ultra-pure solvents for pharmaceuticals. International policies, like carbon
border tax adjustments, could raise costs for exported chemical products. The just energy transition will be tough in all scenarios,
especially in creating new manufacturing jobs in South Africa. This is particularly concerning in the Net Zero and Cooperative
World scenarios due to the rapid transition required and limited time to develop local industry. Physical climate risks are higher in the
Current Pathway and Fragmented scenarios due to slower transitions.
Carbon tax rates are as per National
Treasury’s October 2022 announcement
(see below).
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SOUTHERN AFRICA
ENERGY AND CHEMICALS
The energy transition in South Africa is expected to lag due to nationally determined development pathways for developing
countries. In the Net Zero and Cooperative World scenarios, there are higher expectations to lower the use of carbon intensive
feedstocks, leading to lower scores. Conversely, the Current Pathway and Fragmented World scenarios face less pressure to cut
emissions and coal use, offering more job opportunities in value chains, which benefits robustness testing outcomes.
2025
QUALITATIVE ROBUSTNESS TESTING TO 2030
19
0
2030
Sasol’s high GHG emissions profile in
South Africa attracts a high carbon tax liability
as compared to our other international
operations. As such, the following carbon
pricing assumptions apply:
2024
Fragmented
World
Current
Pathway
Cooperative
World
Net Zero World
Quantitative robustness testing to 2030 (with mitigation)
15
continued
2023
RESILIENCE OF OUR PORTFOLIO
