Companies emit more greenhouse gases than they should because they can. South Africa's new(ish) carbon tax system puts a price on carbon that will hopefully bring emissions down.
South Africa's heavy greenhouse gas emitters such as Sasol, ArcelorMittal, Exxaro, PPC and others are scrambling to register for carbon offset projects as the deadline looms for the payment of carbon tax in June.
The Carbon Tax Act came into effect on 1 June 2019 and compels carbon emitters to pay for the pleasure of adding to the atmospheric load of human-caused greenhouse gas (GHG) emissions.
The first filing of the carbon tax returns for the 2019 reporting period was required by 31 July 2020, but was deferred by three months to 31 October 2020 as part of the Covid-19 relief mechanisms for taxpayers.
The tax sees companies taxed on direct emissions at a rate of R127 per CO² equivalent emitted, rising to R134 this year and escalating at 10% per annum over the next five years. An estimated R2.5-billion was raised in the 2020/21 tax year, according to research from Cova Advisory.
However, a carbon offset allowance allows emitters to reduce their carbon tax liability by 5% to 10% of their...