Cabinet Approves Company-Level Carbon Budget Allocation Methodology

Cabinet has approved both Sectoral Emission Targets (SETS) and mandatory carbon budgets, in line with South Africa’s commitments under the Paris Agreement and following the country’s participation at COP26, where the “Just Energy Transition” agreement with leading nations was confirmed.

It entails R131 billion in funding over three to five years from the US, UK, Germany, and France to help South Africa reach its Nationally Determined Contribution (NDC), reduce emissions, and transition from coal to renewable energy sources.

SETS will be allocated after the promulgation of the Climate Change Bill. Eskom, previously exempt from policies like the local carbon tax, would not be exempt from the new SET framework.

The cabinet also approved the implementation of a company-level carbon budget allocation methodology as a mandatory carbon budget system. Expected to be implemented in 2023, it will target all companies with high emissions, including Eskom, and compel adherence to company-level carbon budget allocations.

The proposed company-level carbon budget system can have a significant impact on your business. Investing in a sustainability performance management system, such as EcoMetrix Africa’s Enterprise Performance And Carbon Management (EPCAM™) platform, can streamline regulatory compliance, minimize tax exposure, all while monitoring your organization’s environmental impact continuously to identify reduction and mitigation opportunities.

To discuss the potential implications of the Carbon Budget, please contact Lodewijk.Nell@ecometrix.co.za or henk.sa@ecometrix.co.za.

Credit Image: GCIS