South Africa awaits new draft of carbon tax bill8 May 2017
After more than eight years in the making, South Africa’s proposed carbon tax legislation could come into force in January 2018. But with coal making up 70% of the country’s energy mix and uncertainty surrounding its gas and nuclear power programmes, industry figures argue South Africa is not ready. Nevertheless, if the country does not take steps soon, it will miss its COP21 pledge to peak greenhouse gas (GHG) emissions by 2025 and fail to ensure a decline in absolute terms from 2035 onwards.
A new draft of the carbon tax bill is expected in mid-2017 following nearly two years of revisions. In the previous draft, released at the end of 2015, GHG emissions were to be taxed at ZAR 120 per ton of carbon dioxide equivalent ($8.9/tCO2e). However, businesses would initially pay only ZAR 6-48/tCO2e, because the first phase of the programme – originally expected to run from 2017 to 2020 – would make a range of tax-free allowances available.
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