Aug 08, 2014
Need for industry to work together with government on carbon tax implementationBack
Engineering|Africa|Environment|National Treasury|Petroleum|PPC|transport|Africa|South Africa|Cement Manufacturer|Energy|Manufacturing|Manufacturing Sectors|Products|Services|Solutions|Environmental|Cecil Morden|Infrastructure|South Africa
© Reuse this
Morden highlighted this during the South African Petroleum Industry Association’s twenty- year anniversary last month, in Sandton, and added that the energy, petroleum, transport and manufacturing sectors were the greatest emitters of greenhouse gases.
Therefore, there is a growing need for industries to note the importance of mitigating the effect of the gases on the environment and provide solutions for these environmental challenges.
“A carbon tax rate of R120/t on carbon emissions, increasing at 10% a year, will be implemented during the first five years of implementation. When the tax-free threshold and additional relief are taken into account, the effective tax rate will range between R12/t and R48/t of carbon emissions,” he pointed out.
However, industry is concerned about the impact of carbon tax on business holistically.
Engineering News reported last month that steelmaking giant ArcelorMittal South Africa (AMSA) recently indicated in the press that the proposed carbon tax, if implemented in its current form, would cost it between R630-million and R650-million a year, prompting AMSA to call for special carbon tax treatment.
Cement manufacturer PPC indicated in its yearly financial statements that its carbon tax liability would be about R150-million.
As a result, the general sentiment of industries is that carbon taxes are likely to pose a huge threat to the future competitiveness and financial wellbeing of their businesses.
Morden explained that, although the carbon tax rates might appear to be too much for industry, it was the responsibility of industry to assist in mitigating carbon emissions.
With industry playing its role, he said, government would be able to partner with industry to finance the mitigation of carbon emissions.
carbon tax drive changes producer and consumer behaviour in three ways.
Firstly, carbon pricing will encourage a shift in production and consumption towards low- carbon and more energy efficient technologies by altering the relative prices of goods and services and by encouraging the uptake of cost-effective, low-carbon alternatives.
Secondly, carbon-intensive factors of production, products and services are likely to be replaced with low carbon-emitting alternatives. Subsequently, as the industries that emit the largest amounts of greenhouse gases are important to the country’s proposed infrastructure build programme, appropriate policies are required to ensure that mitigation and adaptation strategies are taken into account in investment decisions that have long-term lock-in effects.
Thirdly, a carbon price will create dynamic incentives for research and development and technology innovation in low-carbon alternatives.
Edited by: Martin Zhuwakinyu© Reuse this Comment Guidelines (150 word limit)
Creamer Media Senior Deputy Editor
Other Video News
Updated 8 minutes ago Proposed regulations by the Department of Health have driven manufacturers back to sugar while the search is on for new, more natural sweeteners, creating uncertainty in the nonnutritive sweetener segment, which could affect profits. This was according to Frost &...
Updated 19 minutes ago East Rand-based Mega Aero Training Academy (Mata) has secured European accreditation and recognition for its aircraft maintenance courses. The Safomor Group subsidiary and College Ireland on Wednesday signed an agreement to enable Mata students to obtain European...
Updated 45 minutes ago Despite its challenges, Africa remains an attractive long-term global investment destination, with its younger and fast-urbanising populations and rising levels of income presenting opportunities to a significantly liquid global financial market, Nedbank economist...
Recent Research Reports
Steel 2015: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2015 report provides an overview of the key developments in the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon...
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
This Week's Magazine
While economic forecasts for the African continent are most favourable, African airlines may not be able to benefit from the expected growth in the region’s gross domestic product (GDP), International Air Transport Association VP: Africa Raphael Kuuchi has warned....
The Automotive Production and Development Programme (APDP) will need to change substantially post 2020, says Metair Investments South African operations COO Ken Lello. “We must not make tweaks. We have to change. What we are doing is not sustainable.”
Banking group Absa’s forecast is for the rand to end the year at around R13 against the dollar, weakening further to R13.50 by 2016, says Absa sectoral analyst Jacques du Toit. He warns that possible interest rate hikes in the US may see capital being pulled from...
The Dispute Resolution Centre at the Bargaining Council for the Civil Engineering Industry (BCCEI) is now open to handle party-to-party disputes. The BCCEI represents the interests of all level four to nine Construction Industry Development Board companies.
Communications technology firm Ericsson sub-Saharan Africa head Fredrik Jejdling says the company’s commitment to sustainability and corporate responsibility has been integrated into all facets of its operations, which has provided it with sustainable revenue...