Draft regulation on carbon offsets published for public comment
The Treasury has published a revised draft regulation on carbon offsets, which provides for the implementation of a carbon tax and is expected to go into effect from June 1, for public comment.
The revised draft regulation relates to the draft Carbon Tax Bill, which still has to be adopted by parliament.
Parliament’s finance committee expects to process the bill before the end of the year but there will not be time for the National Assembly to vote on it before parliament rises in early December, committee chair Yunus Carrim said on Monday.
In March, during public hearings, carbon-and energy-intensive companies in the mining, steel, chemical, cement and paper industries come out against the proposal, with some warning against the regulatory and policy uncertainty surrounding the proposals. Eskom argued at the time that carbon tax was not required for SA to meet its international commitments and would result in a sharp increase in electricity tariffs from 2023.
The draft Carbon Tax Bill makes provision for carbon offsets, which are investments in specific projects that reduce, avoid or sequester emissions. This provides firms with the flexibility to reduce their carbon tax liability by either 5% or 10% of their total greenhouse gas emissions by investing in projects that reduce their emissions.
The Treasury said in a recent media statement that the revised draft regulation on carbon offsets had been substantially changed from the initial draft to take account of stakeholder comments.
‘‘Some sections of the regulation have been refined such as expansion of the eligibility criteria to include certain renewable energy and renewable energy independent power producer procurement (REIPPPP) projects whilst more details have been added for clarity on the criteria for ineligible projects,’’ the statement said.