Promising Start for SA’s First Carbon Tax

Despite some teething problems, the submission process for SA’s first carbon tax deadline ran smoothly overall, even in respect of the most complex component of the tax, the ‘offset allowance’. This is a new process that allows tax liable entities to acquire carbon tax offsets (CTOs) on the open market to offset part of their taxable GHG emissions and reduce their tax liability.

SA’s first carbon tax has proven to be an incredibly positive step, putting South Africa on a greener economic development path. It has successfully increased awareness among industries about their levels of emissions and substantially developed carbon accounting systems and associated skills, crucial for meeting the 2030 deadline for Paris Agreement climate goals.

In addition, it has also exposed a massive gap between CTO demand (estimated between 7 to 10 million CTOs per year) and supply (just over 3 million CTOs in this first year), creating substantial opportunities for developing the local CTO market. Further key developments advancing the local CTO market include the establishment of a local South African carbon standard; new initiatives like Nature Based Solutions; and an unmatched appetite for domestic and international investment into GHG mitigation projects.

Read the full article that was published on Engineering News HERE.