South Africa is to introduce its first general carbon tax from 2015. The Minister of Finance Mr Pravin Gordhan has announced in his budget speech in Parliament that from 1 January 2015 the government will price carbon by way of a carbon tax at the rate of R120 per ton of CO2 equivalent.
"To soften the impact, a tax-free exemption threshold of 60 per cent will be set, with additional allowances for emissions intensive and trade-exposed industries," Mr Pravin Gordhan added. "An updated carbon tax policy paper will be published for further consultation by the end of March 2013."
To ensure that South Africa produces fuel that is more environmentally friendly, support mechanisms for both biofuel production and the upgrade of oil refineries to cleaner fuel standards were to be introduced.
"In addition, government continues to direct spending towards environmental programmes, such as installing solar water geysers, procuring renewable energy, low carbon public transport, cleaning up derelict mines, addressing acid mine drainage, supporting our national parks, and in particular, to save South Africa's rhino population, which remains under threat," Mr Gordhan said.
"We are also encouraging the private sector and smaller public entities to be creative and develop low-carbon projects through the Green Fund. In the first call for proposals, 590 applications were received. The R800 million that was previously allocated is to be topped up with an additional R300 million," the Minister of Finance said.