Just Share, a pressure group lobbying for reduction in carbon emissions in South Africa, has opposed Sasol’s appeal against a decision by the National Air Quality Officer (NAQO), which sidelined the petrochemicals group’s application for an “alternative emission limit” on emissions from 17 of its coal boilers at Secunda.
Environment Minister Barbara Creecey will deliberate and make a decision on the Sasol appeal. In its appeal, launched nearly four weeks ago, Sasol argued that “instead of reducing (emissions)” on a per boiler concentration basis, it will “reduce the total number of boilers” it runs as a means of achieving the “same or better result” in its emissions.
The petrochemicals industry in South Africa is faced with new regulations for minimum emissions standards that kick off in March 2025.
Just Share said yesterday that Sasol’s attempts to persuade the minister that the regulations be applied according to a preferential system favouring the petrochemicals company, rather than following what was set out in the law, should be rejected.
In addition to arguing that Sasol’s claims about load-based emissions are incorrect, Just Share also underscored that “the law was clear that no facility could operate in non-compliance” beyond March 31, 2025.
“At its recent results presentation, Sasol said that it would ‘follow due processes to try to resolve the issue, to try and find an amicable solution to both parties’ if the minister does not uphold its appeal. In other words, Sasol will lobby the minister to ensure preferential treatment and essentially an exemption from complying with the law that it has been aware of for over a decade,” argued Just Share.
Sasol said last week that it took an R8.1 billion impairment on its Secunda liquid fuels refinery as at December 2022 after factoring in the negative impacts of “an update in macroeconomic price assumptions, including higher electricity price forecasts and lower gas selling” prices.
“An additional impairment of R27.2 billion was recognised for this CGU, resulting in it now being fully impaired. Sasol continues to advance implementation of its emission reduction roadmap (ERR) in South Africa to achieve a 30% reduction in greenhouse gas emissions by 2030,” the company said as it released its financials for the year to end June 2023.
Sasol said its ERR involved the turning down of boilers, implementing energy efficiency projects, reducing coal usage and integrating 1200MW of renewable energy into its operations by 2030.
But Just Share insisted that Sasol still did not intend to comply with the 2020 emissions stipulations set to start in 2025, having instead applied to the NAQO for its coal boilers to be regulated based on a load-based limit, which would allow it to continue “this non-compliance” indefinitely.
In July, the NAQO rejected Sasol’s application, pointing out that: “To consider any deviation from the MES, including by an alternative emission limit, after the March 2025 compliance deadline, would be contrary to the purpose of the empowering legislation.”
By asking the Minister of Environment to “bear in mind the unique position in which Sasol finds itself, said Just Share, Sasol was “asking the minister to excuse it from complying” with the law.
“It would be neither appropriate nor lawful to provide Sasol with any special treatment in deciding this application,” it said.
For the full year to end June 2023, Sasol’s earnings before interest and tax (Ebit) of R21.5 billion declined 65% compared to the prior year, mainly due to the impairment of assets and the inflationary impact on costs among other headwinds.
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