Current Policy Projections
Current policy-based projections are estimated to reach emissions levels of 595 MtCO2e in 2020 excl. LULUCF. This is equivalent to a 71% increase in emissions from 1990 levels excl. LULUCF. For 2030, the current policy analysis suggests a further increase in emissions to 647 MtCO2e, excluding LULUCF, representing a 82% increase in emissions above 1990 levels. South Africa thus gets close to achieving its NDC targets.
If South Africa implemented the targets for the electricity sector as suggested in the Draft IRP 2018, it could reach the upper end of its NDC range in 2030: Total emissions in 2030 would be 19–24 MtCO2e lower than under current policies.
Historically, South Africa’s emissions have steadily increased. Its economy relies significantly on mining and heavy industry. Energy consumption in the industrial and building sectors relies largely on electricity as an energy source, which is produced with high carbon intensity using domestic coal: 92% of South Africa’s electricity was generated from coal in 2015 (IEA, 2017c). Large amounts of coal are also liquefied: over 30% of South African gasoline and diesel needs are covered by liquefied coal (World Coal Association, 2015). Additional emissions come from industrial-process emissions, especially steel and cement production.
The Republic of South Africa’s National Development Plan (NDP) provides a 2030 vision on sustainable development, eliminating poverty and reducing inequalities. The 2011 National Climate Change Response Policy (NCCRP) further elaborates this 2030 vision. There are various sectoral plans, of which the Integrated Resource Plan (IRP) for electricity is South Africa’s main policy affecting greenhouse gas emissions (see ‘Energy supply’ section below).
South Africa is planning on introducing a carbon tax covering fossil fuel combustion emissions, industrial processes and product use emissions, and fugitive emissions (e.g. fugitive emissions from coal mining). The implementation of the carbon tax has faced several setbacks and opposition from industry (Trollip & Boulle, 2017). The proposed Carbon Tax Bill finally entered the parliamentary process in February 2018 after two years of consultation (Ensor, 2018; Republic of South Africa, 2017). After further parliamentary hearings and revisions, the final draft is expected to be completed by end-2018.
Under current planning, a basic tax-free threshold for around 60% of emissions and additional allowances for specific sectors might result in tax exemptions for up to 95% of emissions during the first phase until 2022. While the full carbon tax rate is proposed to be R120/tCO2e (US$ 8/tCO2e), after exemptions, the effective tax rate is expected to be between R6–48/tCO2e (US$ 0.4–3/tCO2e) (World Bank, 2016). The Carbon Tax implementation may be accompanied by a package of tax incentives and revenue recycling measures to minimise the impact of the first phase of the policy (up to 2022) on the price of electricity and energy intensive sectors including mining, iron and steel (EY, 2017).
South Africa has released a draft climate law in June 2018, which is open for public consultation until the beginning of August (Department of Environmental Affairs, 2018). The draft law aims for the establishment of a Ministerial Committee on Climate Change to oversee and coordinate the activities across all sector departments. Under the proposed legislation, the Minister of Environment Affairs together with the Ministerial Committee on Climate Change would have to set sectoral emission targets (SETs) for each greenhouse gas emitting sector and in line with the national emission target every five years.
One of South Africa’s key policies to reduce emissions is through increased deployment of renewable energy. At the end of 2016, installed renewable capacity totalled 4.1 GW (IRENA, 2017). Introduced in 2010, the Integrated Resource Electricity Plan (IRP) 2010–2030 is the government’s capacity expansion plan for the electricity sector until 2050 (Department of Energy, 2011), which contains targets for all technologies, including renewable energy technologies.
The IRP sets an overall emissions constraint of 275 MtCO2/a for electricity generation after 2024, meaning that the total emissions from electricity generation should not be higher than this threshold, which has been relevant for supporting the inclusion of RE capacity targets. The IRP 2010–2030 aims to more than triple the installed renewable capacity to 17.8 GW by 2030. This figure is about a third of the electricity generation capacity from all sources (fossil fuel, nuclear and renewable) of 54.93 GW in 2030 (Department of Energy, 2011).
In August 2018, the Department of Energy released the long-awaited IRP update for public comment (Department of Energy, 2018). The revised plan aims to decommission 35 GW (of 42 GW currently operating) of Eskom’s coal generation capacity by 2050: 12 GW by 2030, another 16 GW by 2040, and another 7 GW by 2050. The 5.7 GW of coal capacity currently under construction would be completed and another 1 GW of new coal capacity would be commissioned by 2030. Recent analysis suggests that these planned coal power plants will be significantly more expensive than their low-carbon alternatives (Ireland & Burton, 2018; Paton, 2018). While such capacity additions are not in line with a full decarbonisation of the global power sector to meet the Paris Agreement targets (Kuramochi et al., 2018), the significant volume of coal capacity to be decommissioned by 2030 and beyond marks a significant shift away from previous planning under President Jacob Zuma’s former government.
At the same time, renewables-based generation capacity from wind and solar is projected to significantly increase by 2030 and beyond (8.1 GW for wind and by 5.7 GW for solar), as is gas generation capacity (8.1 GW) (Khumalo, 2018). New projects apart from those already commissioned before 2018 are only planned to come online in 2025. This time gap in newly-commissioned renewable capacity might create a significant risk for local industry to continue manufacturing of renewable-energy hardware (Paton, 2018).
The government’s new plan includes no new nuclear capacity procurement. The original IRP 2010 aimed to build 9.6 GW of new nuclear capacity. While the 2018 IRP update will be open for public comment until November 2018, the government hasn’t yet communicated a timeline for the plan’s final adoption.
The IRP update of 2018 might face significant pushback by unions and industry. Also, the South African cabinet never adopted either of the two previously-proposed IRP updates - in 2013 and 2016. The 2016 IRP update was released in October 2016 and was open for public comment until the end of March 2017 (Department of Energy, 2016b). For this reason, the IRP 2010 remains the official government plan for new generation capacity in the CAT’s current policy projections.
In 2012, the government replaced its feed-in-tariff scheme with the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). This was originally intended to fund the procurement of 3.7 GW of renewable capacity up to 2016 through a bidding process. At the end of 2012, the REIPPPP was extended to fund a further 3.2 GW of capacity (Department of Energy, 2013). As of September 2018, 6.4 GW of renewable projects have been procured under the REIPPPP (Independent Power Producers Office, 2017).
Despite the success of the REIPPPP in generating interest in renewable energy project development—with all bidding rounds significantly over-subscribed—there have been considerable delays in connecting the procured renewable projects to the grid. Eskom—South Africa’s grid operator and its largest utility company, which also owns most of the country’s coal-fired power plants—together with the Department of Enterprises and the Department of Energy had stalled on signing power purchase agreements, which guarantee grid access for renewable energy projects (Groenewald, 2017; Njobeni, 2018b).
In February 2018, the Department of Public Enterprises finally approved the signing off on power-purchase agreements (PPAs) related to REIPPP bid-windows in terms of the Public Finance Management Act (Deign, 2018). The remaining 27 PPAs of Bid Windows 3.5 and 4 with a total capacity of 2.3 GW were officially signed by Eskom in April 2018 (Creamer, 2018). The final signing was delayed to April 2018 as two unions had filed for urgent court interdict at the North Gauteng High Court in Pretoria to prevent Eskom from concluding the outstanding power-purchase agreements, citing concerns over adverse impacts on workers in the coal sector (Beetz & Bellini, 2018). However, the North Gauteng High Court in Pretoria rejected their application and all outstanding agreements were officially signed.
A new bid round for renewable energy projects has been announced in June 2018 by Energy Minister Jeff Radebe to launch in November 2018 with an estimated size of 1,800 MW in renewable energy capacity and a potential investment volume of up to USD 3.95 billion (R 50 billion) (Njobeni, 2018a; Reuters, 2018). Eskom’s ongoing financial solvency issues, the change in political leadership in several ministries with the inauguration of President Cyril Ramaphosa, and the pending adoption of the IRP revision by the Department of Energy however still exposes the future of the REIPPP and PPAs to high uncertainty.
A post-2015 National Energy Efficiency Strategy (NEES) is under consideration to replace the first NEES adopted in 2005 (Department of Energy, 2016a). This strategy aims to build on the achievements of the first NEES, which saw higher than targeted improvements in energy intensity, by stimulating further energy efficiency improvements through a combination of financial incentives, legal and regulatory frameworks and enabling measures. It is expected to reduce economy-wide final energy consumption by 29% below 2015 levels by 2030.
Policy and planning documents for the South African industry sector generally address sustainable industrial economic development but barely mention mitigation targets for the industry sector or concrete measures for implementation. The post-2015 National Energy Efficiency Strategy (NEES) currently under consideration proposes industrial sector targets that would reduce the weighted mean specific energy consumption in manufacturing by a meagre 16% by 2030 and to realise a total of 40 PJ in cumulative annual energy saving by 2030 arising from specific energy saving interventions undertaken by mining companies (Department of Energy, 2016a). Energy use from the mining and quarrying sector amounted to 185 PJ in 2015 (IEA, 2017a).
The South African government intends to achieve these targets through implementing several proposed measures such as the National Cleaner Production Centre South Africa (NCPC-SA) that promotes energy efficiency measures, its associated Industrial Energy Efficiency Project (IEE) that promotes energy management systems, or the Green Fund South Africa that financially supports green technology research and implementation. However, these measures may only induce small emissions reduction impacts. There are no signs of policy-driven emissions reductions in the near future for emissions-intensive subsectors as steel production and mining in context of the ongoing economic stagnation in South Africa.
In August 2017, the Department of Transport released a Draft Green Transport Strategy (GTS) 2017–2050 (Department of Transport, 2017b) to initiate the low carbon and just transition of the sector, but did not specify any concrete long-term emissions reduction target for the sector.
Due to a lack of enforcement, the mandatory blending of biofuels has not been included in our current policy projections. The Biofuels Industrial Strategy mandates a biofuel blending of 2%–10% for bio-ethanol and minimum 5% for biodiesel from 2015 onwards, which falls under the Petroleum Products Act. Even though this policy on the mandatory blending of biofuels has been legally put into force, as of July 2017 it has not been enforced, mainly due to concerns over the impact of large-scale biofuels production on food security and financial support for biofuels (Fundira & Henley, 2017). If the policy targets were to be met, they would lower emissions by up to 2.7 MtCO2e/a from 2025 onward.
South Africa introduced other road transport-related policies such as vehicle fuel economy norms for newly manufactured passenger and commercial vehicles (in 2005), vehicle labelling scheme (in 2008), and a carbon emissions motor vehicles tax as an environmental levy on passenger vehicles with emission levels above certain thresholds (in 2010). Under the Draft GTS 2017–2050, the Department of Transport currently states its intention to revise the level of vehicle fuel economy standards (Department of Transport, 2017b).
South Africa’s Electric Vehicle Industry Roadmap (2013) aims to introduce electric passenger vehicles. However, as of February 2018, no local manufacturing or purchasing incentives for local manufactures have been introduced under the road map. The total number of such vehicles sold in South Africa remains marginal with only 170 registered vehicles in South Africa in 2015 and an increase to about 500 in 2017 (IEA, 2016; Snyman, 2017). Recently-introduced Bus Rapid Transit Systems (BRT) have initiated the main switch in modal share of passenger transport in urban areas. These have commenced operation or are currently under consideration in public transportation planning in several South African urban areas (Department of Transport, 2017a). Initiatives to implement and expand BRT systems are currently taking place in eight cities and municipalities.
South Africa has implemented several building regulations and codes on energy efficiency and usage in buildings for new buildings and major refurbishments of old buildings (Sustainable Energy Africa, 2017). The South African government has introduced some energy efficiency and labelling requirements for household applications and a five-year retrofit project to retrofit 1,450 buildings with energy efficient installations (Grantham Research Institute on Climate Change and the Environment, 2017). The draft Post-2015 National Energy Efficiency Strategy foresees reductions of the final energy consumption by 33% in the residential sector and 37% in the public and commercial sector by 2030, compared to the 2015 baseline (Department of Energy, 2016a).
South Africa has made significant improvements by increasing the buildings energy efficiency per square metre, while the buildings emissions intensity per capita is only slowly decreasing (Climate Action Tracker, 2018). The move away from biomass use for cooking and heating towards the use of more modern appliances that require electricity, which, in turn, is largely generated by fossil fuels, might significantly increase indirect emissions. Although retrofitting rates in the residential and commercial buildings sector are still comparatively low, green retrofitting of existing buildings is expected to be the largest sector of the green building industry in South Africa within the next three years (World Green Building Council, 2016a). It is expected that the proportion of green buildings in South African building activity will increase over the next years due to cheaper operations costs and higher returns on investments compared to conventional buildings (GBCSA, 2017; World Green Building Council, 2016b). The trend towards more energy efficient buildings has been accelerating, also due to an ongoing energy and water crisis. A pending regulation on tightened building and appliances standards and certifications could potentially further stimulate this trend(Sustainable Energy Africa, 2017).
There is a limited number of policies in South Africa’s agricultural and forestry sector targeted at climate change mitigation. The 2nd Biennial Update Report specifies two Long Term Mitigation Strategy (LTMS) measures on enteric fermentation and reduced tillage (Department of Environmental Affairs, 2017; Winkler, 2007). However, there is no information on their state of implementation. The National Climate Change Response Policy further names climate smart agriculture (CSA) as a practice “that lowers agricultural emissions, is more resilient to climate changes, and boosts agricultural production” (Government of South Africa, 2011). A number of CSA activities are already in place in South Africa (Nciizah & Wakindiki, 2015), but their expected or actual mitigation impacts are not reported.
Agriculture emissions intensity in South Africa (GHG emissions per value added) has been declining significantly over the last decade and reached 1.73 tCO2e/USD1000 in 2014 compared to 3.13 tCO2e/USD1000 in 1995 (Climate Action Tracker, 2018). However, emissions intensity is still significantly above the world average of 1.25 tCO2e/thousand US$ in 2014. Total GHG emissions from livestock declined by 5.6% from 2000-2012, attributed to the decline in cattle populations. However, the total livestock population over this period increased by 29.8% due to large growth in the poultry industry with low enteric fermentation emissions (Department of Environmental Affairs, 2016). Domestic meat production of 159g/cap/day in 2013 remains comparatively high compared to the world average of 117g/cap/day in 2013.
There is only a limited number of mitigation related policy measures in South Africa’s forestry sector. The 2nd Biennial Update Report lists work programmes on fire prevention, water, and wetlands, as well as a Long Term Mitigation Strategy (LTMS) measure on afforestation to plant an additional 760,000 ha of commercial forests (Department of Environmental Affairs, 2017; Winkler, 2007). No information on their state of implementation is provided.
According to national data, the forestry sector has been a net sink over the period from 2000 to 2012, no official national data is available for later years (Department of Environmental Affairs, 2016), nor are projections1. In the inventory, crops and grasslands are sources of emissions, however, those are overcompensated by a sink from forest lands. Opposed to national data, FAO Statistics show a small emissions source for the land use sector in total, stable over the last two decades at around 2 MtCO2e (FAOSTAT, 2017).
Given the importance of the timber industry, the area of woody crops has almost doubled since the early 1990s, and stabilised over the last decade (FAOSTAT, 2017). However, at the same time, the overall forest area has continuously decreased (Department of Environmental Affairs South Africa, 2014; FAOSTAT, 2017). The planted trees are non-domestic species, and concerns about their negative impacts on water resources have been raised (Bosch & von Gadow, 1990).
The reason forests are a net sink despite decreasing forested area may be that the carbon content of the planted forests compared to the deforested area is higher. However, with different and contradicting data sources available, it is unclear whether this is the reason for this apparent mismatch, or whether there are methodological issues in the inventory.
1 | South Africa’s Greenhouse Gas Mitigation Potential Analysis excludes the sector and states “there is not sufficient evidence to be able to predict a change in either case so no sequestration is provided for (positive or negative)” (Department of Environmental Affairs, 2014b).