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Naamsa questions ‘illogical’ carbon tax as clean fuels legislation stalls

Naamsa questions ‘illogical’ carbon tax as clean fuels legislation stalls

Photo by Duane Daws

30th October 2017

By: Irma Venter

Creamer Media Senior Deputy Editor

     

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The delay in the introduction of clean fuels in South Africa will halt the flow of new vehicle technology to South Africa, warns the National Association of Automobile Manufacturers of South Africa (Naamsa).

“With the widespread introduction of new technology, including new four-way catalytic-converter-equipped vehicles in Europe during 2018, we will now find that, for the first time since the 1996 introduction of unleaded petrol in South Africa, that many regular petrol engine motor cars available to the general public in Europe, will not . . . be marketed in South Africa,” advised Naamsa fuel and emissions working group chairperson Stuart Rayner in a statement released on Monday.

“This will effectively deny the motoring public access to latest low-emission vehicle technology.”

Moreover, having to produce export vehicles in South Africa for high technology export markets, as well as vehicles for the local low technology market, was inefficient and impacted negatively on the industry’s global competitiveness.

Naamsa added that a plateau had been reached in South Africa in terms of average vehicle fuel economy, as measured in terms of carbon dioxide (CO2) emissions.

The association noted that automotive companies believed that any further progress was unlikely without the widespread introduction of the latest engine technology, which, in turn, required new enabling [clean] fuels.

Despite the absence of clean fuels flowing from South African refineries, new car and bakkie owners in the domestic market were, from 2010, charged a carbon tax for each g/km of CO2 emissions above a threshold of 120 g/km.

Naamsa said it was “illogical” that vehicle manufacturers and importers should continued to be penalised for not introducing latest engine technology vehicles when many such vehicles would not be able to operate on South African fuel, or, while those models that were introduced, might require expensive reverse engineering to use older, less efficient engines.

“Product restrictions are already being applied to local companies by their foreign principals, particularly due to the lack of availability of clean fuels. This calls into question the rationale for continued application of CO2 taxes on new motor vehicles in South Africa, and reinforces the urgent need for the introduction of clean fuels,” said Naamsa.

Government announced a R40-billion allocation in the 2013/2014 budget for the upgrading of South Africa oil refineries to produce Euro V fuels by 2017.

The Department of Energy subsequently decided to re-evaluate the clean fuels initiative, with little progress since.

South Africa was about 15 years behind the rest of the world in terms of fuel standards and quality, said Naamsa.

“The introduction of clean fuels in South Africa is essential from an environmental/urban air quality and human health perspective.

“It is also essential to enable [vehicle manufacturers] to supply the market with high technology, highly fuel efficient and low emission new motor vehicles.”

 

Edited by Creamer Media Reporter

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