Scrolling through most newsfeeds these days, there is a good chance that you will come across an article either on Greenhouse Gas (GHG) emissions or the effect of Climate Change on communities around the world. It’s important to understand what the significance of these Greenhouse Gas emissions is, how they cause Climate Change, how the South African government is implementing measures to reduce GHG emissions and why it is important for the South African Agricultural industry to address these issues.

What are Greenhouse Gas emissions?

Greenhouse Gases are gases naturally found in earth’s atmosphere – GHG’s act like a blanket around the earth, trapping in heat received from the sun. Burning of fossil fuels (e.g., coal, diesel, petrol, and natural gas) leads to higher levels of these gases and therefore heat trapped in our atmosphere – this effect is referred to as Global Warming and causes Climate Change globally. The most significant GHG’s are Carbon Dioxide (CO₂), Methane (CH₄), Nitrous Oxide (NO₂), Perfluorocarbons (PFCs), Hydrofluorocarbons (HFCs) and Sulphur hexafluoride (SF₆) – these GHG’s differ in their global warming potential, with Sulphur hexafluoride (SF6) having the greatest potential.

Why is this important?

Climate Change has numerous significant impacts on the earth, including:

·       more frequent extreme weather events,

·       hotter temperatures,

·       shifting climatic zones and pest ranges,

·       polar and glacial melting,

·       biodiversity loss,

·       rising sea levels and

·       ocean acidification.

What is being done to address this?

The Carbon Tax in South Africa forms part of national legislation released in 2019 in response to the commitments made by South Africa towards curbing GHG emissions (also known as carbon emissions). These commitments were initiated by the targets set out in the Paris Agreement of 2016 (of which South Africa is a signatory) that aims to limit global average temperature rise to 1.5°C by the year 2100. The global average temperature can be seen as a thermometer that measures the health of the earth in relation to GHG emissions and Climate Change.

The Carbon Tax is based on the “polluter pays” principle and focuses on fuel combustion, industrial processes, and fugitive emissions. It is scheduled to be rolled out in multiple phases – South Africa is currently in Phase 1 of the roll-out, with Phase 2 (applicable to the agricultural industry) originally scheduled to begin on 31 December 2022. The 2022 Budget proposal announced early in 2022 resulted in a 3-year delay in Phase 2 of the Carbon Tax roll-out in South Africa which will become effective on 31 December 2025. Once an entity exceeds the set threshold for GHG emissions, the carbon tax will then become applicable and be dependent on the amount of GHG emissions that are emitted.

To simplify carbon tax calculations, GHG emissions are converted to a carbon dioxide equivalent using each GHG’s global warming potential figure – for example, the global warming potential of Carbon Dioxide (CO₂) is 1 whilst Sulphur hexafluoride (SF6) is 23 500. Once the carbon dioxide equivalent amount has been calculated, it is then multiplied by the carbon tax rate. As highlighted in the Taxation Laws Amendment Act 20 of 2022, the current carbon tax rate stands at ZAR 159 per ton of carbon dioxide equivalent (effective 1 January 2023) and is planned to increase towards R308 per ton by 2026 and R462 per ton by 2030.

With the upcoming implementation of Phase 2 of the Carbon Tax, and due to the already strong focus on GHG emissions from global markets (e.g., via the Sustainable Development Goals, Paris Agreement, EU Green Deal, etc.), the SIZA Environmental Standard encourages members to record, monitor and reduce their GHG emissions.

How can the South African agricultural industry ensure that it complies with global market requirements?

Recordkeeping (for example: of energy, agrochemical, and electricity usage) will assist members with calculating their Carbon Footprint as 12 months’ worth of data is required – this recordkeeping will further assist members with illustrating the improvement made towards reducing GHG emissions. SIZA offers a Digital Recordkeeping Programme which is closely aligned with the SIZA Environmental Standard and greatly assists with maintaining compliance with this standard. Members can make use of the SIZA Digital Recordkeeping Programme to calculate their Carbon Footprint via a partnership with the Confronting Climate Change Initiative. The SIZA Environmental standard encourages its members to understand their carbon footprint and to reduce their GHG emissions as outlined under the SIZA code requirements.

For more information, feel free to get in touch with our team at enviro@siza.co.za / +27(0)21 852 8184 or visit our website using the links below:

Distributed by:  SIZA

Written by: Alistair Galloway (SIZA Environmental Specialist). alistair@siza.co.za

Date issued:  May 2023