South Africa to lay out carbon market regulation proposals
South Africa’s National Treasury plans to lay out its proposals for how to regulate carbon markets in the country in the next few months.
The government department said it plans to publish a consultation paper on the industry around the time it presents its Medium-Term Budget Policy Statement in October.
While African countries from Zimbabwe to Ghana have been rushing to regulate the production and trade in carbon credits, which can be sold to companies or countries to compensate for their emissions of climate-warming gases, to garner more income for the governments, South Africa is both a producer and a consumer of the offsets.
Even though South Africa has the potential to produce the credits from its renewable-energy activities and the restoration of carbon-absorbing ecosystems it’s the world’s fifteenth-biggest producer of greenhouse gases.
The bulk of those emissions are due to the reliance on coal to produce electricity and petrochemicals from plants operated by companies including Eskom Holdings and Sasol It has imposed a carbon tax on emissions that will gradually become more punitive.
A credit represents to a ton of carbon dioxide or its equivalent either permanently removed from the atmosphere or prevented from reaching it in the first place.
The Treasury, in the paper, will seek to define the legal nature and treatments of carbon credits in terms of whether they are a security, derivative or commodity. That definition will have implications on how the offsets are treated in terms of exchange controls, regulation ad reporting requirements.
It will also seek to ensure that the credits aren’t duplicated and once sold can’t be reissued. The rules will ensure that there are common approaches to how they are treated under the so-called voluntary carbon market, the United Nations’ Article 6 Policy Framework and Carbon Strategy and South Africa’s own carbon tax.
The voluntary market allows individuals or organizations to buy credits to offset their emissions and is subject to less oversight than under Article 6, a legally binding international treaty that allows countries to trade carbon credits between each other, alongside companies, to meet their climate goals.
Comments
Announcements
What's On
Subscribe to improve your user experience...
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?
Receive 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)
➕
Recieve 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
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation