By: Eckart Zollner, Head of Business Development at EDS Systems

On a global scale, the primary sources of greenhouse gas (GHG) emissions are electricity and heat (31%), agriculture (11%), transportation (15%), forestry (6%) and manufacturing (12%). South Africa’s Carbon Tax Act means these industries will finally be paying the price for polluting. The impact of this carbon tax should not be underestimated and although the Act takes a phased approach to roll-out while providing tax relief allowances in the first phase, it’s critical for companies to understand their risk exposure as soon as possible. The solution is to find the right mix of carbon analytics software solutions and a consulting partner that can help manufacturing companies to make sense of their footprint in order to re-engineer processes to minimise emissions and reduce carbon tax liability.

Clean up or pay up
In order to achieve South Africa’s goal of 33% reduction in emissions relative to the baseline by 2035, the Carbon Tax Act incentivises change by charging certain industries (like cement production, mining, fuel production) a carbon tax if their activities result in emissions in excess of the legislative threshold.

The Act will roll out in three phases to gradually push companies to take a serious look at how to ‘green up’ their processes to lessen the adverse environmental impact of their manufacturing activities over the next decade. In addition to lowering their tax liability by re-engineering their processes, manufacturers that export will benefit from being able to meet the stringent measures and regulations already in effect in Europe and the US regarding supplier emissions.  In other words, the industry’s global competitive edge depends on its ability to identify and capitalise on opportunities to re-engineer their processes with sustainability first in mind by focusing on reducing their carbon footprint.

Start with visualisation

While there are already a number of carbon analysis tools available to calculate carbon emissions, it’s important for businesses to ensure that the solution they choose is built to align with the South African Carbon Tax framework. All it takes to quantify carbon output is for someone to input the procurement or consumption data into the software calculator, in order to accurately quantify and visualise their carbon footprint. Carbon analysis tools provide businesses with the ability to report, analyse and benchmark against the Act’s thresholds which makes it easy to calculate an exact carbon tax liability (in Rands) as well as to provide the mandatory emissions reporting.  Tax-free allowances applicable in the first phase - significantly simplifying a previously complicated, time-consuming administrative process, also need to be taken into account.

Change inspires innovation
With a clear picture of the organisation’s carbon footprint, the right specialist consultation partner can oversee and drive the implementation of a carbon reduction framework. This can be achieved in a manner that properly acknowledges the urgency to respond to climate change, while ensuring business survival. In order to maximise the potential for carbon reduction, experienced sustainability consultants provide the expertise necessary to re-think energy consumption and conventional manufacturing processes. Further to this, they can manage change across every facet of the business, ensuring that it happens in a manner that is cost and time effective.  In a complex and competitive market. the critical need for change provides the opportunity for companies to lead and to innovate - by embracing or inventing cleaner technologies. Alternatively, producing in a new, cleaner way, organisations will find the advantage as investors, lenders and consumers start to make more carbon-conscious choices with their money.