Creamer Media Login

Update on the Operationalisation of the Carbon Tax – Carbon Budget Mitigation System

4th March 2021

Font size: - +

On 23 February 2021, the Department of Environment, Forestry and Fisheries (DEFF) gave a presentation at the Portfolio Committee Meeting on the Operationalisation of the Carbon Tax – Carbon Budget Mitigation System for Phase II (2023 – 2027). You can view that presentation by clicking the button at the end of this email.

We've summarised the most significant points here:

The end date for Phase I voluntary carbon budgets submissions was 31 December 2020.
A transition period has been agreed and gazetted (22 October 2020) running from January 2021 – December 2022.
The two primary objectives for this transition period are:
- Phase I extension of existing carbon budget:
  - Voluntary carbon budgets will continue to be accepted during the transition period (5% carbon budget allowance applicable).
  - Budget submission must include the period 2021 – 2025.
- Phase II initiation of new carbon budget methodology:
  - A methodology will be decided through an extensive process of engagement.
  - Budgets to be reviewed in 2022 to commence the 2023 – 2027 period.
- Three potential carbon budget allocation methodologies were proposed.
- There are two proposed options for the integration with Carbon Tax:
  - Option 1 relates to a carbon taxpayer being required to pay a different tax rate for exceeding the carbon budget (i.e. R600/ton CO2e exceeded).
  - Option 2 relates to the transferral of a percentage of the basic allowance to the carbon budget allowance (for example the 60% basic allowance reduced to 20%, and the 5% carbon budget allowance increased to 40%).
- National Treasury and DEFF are leaning toward Option 1 as they believe this is the more progressive tax option and will allow for a smoother transition from Phase I to Phase II.

Download DEFF presentation

Cova Advisory

Edited by Creamer Media Reporter

Comments

The functionality you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

Click Here

MAGAZINE & ONLINE

➕

RESEARCH CHANNEL AFRICA

➕

CORPORATE PACKAGES

CLICK FOR A QUOTATION

➕