The Department of Mineral Resources and Energy (DMRE) has published the Draft Framework for the Development, Assessment and Approval of Domestic Carbon Offset Standards for public comment from January 27 to February 28.

The draft framework sets out the requirements, criteria for selection, evaluation and approval of domestic standards to complement three international standards, while balancing government’s interests in protecting the integrity of its greenhouse gas emissions mitigation objectives.

The draft framework is based on a set of key principles and objectives, including those that are broadly applicable to all international and domestic offsets and set criteria which encompass governance and administration; environmental integrity; and social, economic and environmental effects.

The draft framework sets out underlying principles and goals for the development of offset standards, the necessary components of a candidate offset standard and the evaluation criteria to be applied by the framework.

It also establishes the process by which the framework can be implemented, including the composition of the Technical Committee responsible for its application; and application of the framework to the three approved international offset standards.

LAYING THE FOUNDATION

South Africa introduced a carbon tax in June 2019 as part of a package of policy measures to help achieve the Cabinet-approved Nationally Determined Contribution commitments submitted under the global Paris Agreement.

To assist industries to transition their activities and shift to sustainable and low-carbon practices in a cost-effective manner, a carbon offset tax-free allowance is provided to companies under the Carbon Tax Act to help reduce their carbon tax liability and encourage additional investments in eligible low-carbon offset projects.

Carbon offset projects developed under three international carbon offsets standards – the Clean Development Mechanism (CDM), Verified Carbon Standard (VCS) and Gold Standard (GS) – are eligible for use by companies to reduce their carbon tax liability.

Under Regulation 1(d) of the Carbon Offset Regulations, provision is also made for the development of carbon offset projects under another standard including local carbon offset standards approved by the Mineral Resources and Energy Minister responsible for energy, or a delegated authority.

To this effect, the DMRE, together with the National Treasury, embarked on a project to develop and test a framework to guide the development, assessment and approval of potential eligible domestic carbon offset standard(s) in addition to the three identified international carbon standards under the South African carbon offset programme.

As such, the DMRE invites stakeholders to submit comments on the draft framework to help ensure that the implemented local standards framework reduces the administrative burden it places on project developers, standard developers, government administrators and other stakeholders and participants.

Written comments should be submitted by close of business on February 28 to Takalani Rambau at takalani.rambau@dmre.gov.za, and copying Daniel Modise in at daniel.modise@dmre.gov.za.