GENEVA, 24 May - IETA welcomes the formal launch next week of South Africa’s carbon tax and offset law, the first such measure in Africa.
The tax of R120 (US$8) per tonne of CO2 equivalent will be assessed on greenhouse gas emissions from industrial plants in the country. This obligation can be met partially by surrendering certified carbon credits from approved standards.
“We welcome the climate leadership shown by the government of South Africa, for what is a first of its kind on the continent,” said Dirk Forrister, CEO of IETA. “The flexibility will help to ensure rapid reductions in emissions in a cost-effective manner.”
South Africa’s tax forms part of its Nationally Determined Contribution to achieving the goals of the Paris Agreement, which under which nations have agreed to reach net zero emissions in the second half of the century.
South Africa’s tax will allow emitters to use carbon credits to meet between 5-10% of their obligations under the tax.
In the first phase of the tax, only South African-based credits developed under the UN’s Clean Development Mechanism, Verra’s Verified Carbon Standard or the Gold Standard will be eligible for compliance. A future national carbon standard will also be considered. Carbon credits from projects registered and / or implemented before the introduction of the carbon tax regime will be accepted subject to certain conditions.
The official Act is available here in the government gazette of South Africa.
IETA organised a webinar on this topic in April, with participation from the National Treasury of South Africa. You can access the recording and presentations here on the IETA website.