In this year’s budget speech, South African Minister of Finance, Pravin Gordhan, indicated that South Africa is considering introducing a carbon tax with the aim of reducing harmful greenhouse gas emissions and moving South Africa to a low-carbon economy. This is especially important considering South Africa is one of the twenty (20) biggest emitters of greenhouse gases worldwide.

The carbon tax is expected to be R120 per ton of CO2e (carbon dioxide equivalent) for emissions above the threshold. The levy is expected to come into effect in 2013/2014, and to be increased by 10% a year until 2020. That said, Treasury is proposing a tax-free threshold (of about 60%) on annual emissions for all sectors, including electricity, petroleum, iron, steel and aluminium, to lesson the impact on industry. A draft policy is currently being drawn up for public comment.

Carbon tax is not an urban legend but in fact a reality; it has already been implemented in the purchase price of new vehicles, which is a cost consumers absorb entirely. The carbon tax of new vehicles has been in place since September 2011, buyers are paying R75 for each g/km of C0²e above a threshold of 120g/km.

The Importance for Companies

Considering that it is highly likely some kind of carbon tax will be introduced in the next year or two, companies should consider reducing their carbon footprint now. This can be done through undertaking a carbon footprint assessment/carbon footprint analysis to obtain a real picture of their CO2e and to devise strategies to reduce their footprint in the near future. Reducing their footprints now will result in them having to pay less tax in the future.

For more information visit our carbon footprint assessments page: http://www.shadesofgreenevents.co.za/carbon-footprint-assessments/ or feel free to contact us.

For more information on the economic implications of introducing carbon taxes in South Africa, as well as why this is necessary, visit the following link: http://www.trademarksa.org/news/economic-implications-introducing-carbon-taxes-south-africa