CAPE TOWN Feb 22 South Africa is looking
to introduce a carbon tax next year to reduce harmful greenhouse
gas emissions, although nearly two-thirds of emissions will be
tax-exempt until 2020 to lessen the impact on industry, the
treasury said on Wednesday.
In its 2012/13 budget, the treasury proposed a 60 percent
tax-free threshold on annual emissions for all sectors,
including electricity, petroleum, iron, steel and aluminium.
All but electricity, where state-owned power utility Eskom
dominates, would be able to claim additional relief of at least
Companies have said a carbon tax that places too heavy a
burden on the key energy, mining and manufacturing sectors -
already under pressure due to rising power and wage costs - will
hit profits and wider economic growth.
"To minimize adverse impacts on industry competitiveness and
effectively manage the transition to a low-carbon economy,
temporary thresholds are proposed ... which an exemption from
the carbon tax will be granted," the budget said.
It proposed a carbon tax of 120 rand per ton of CO2e (carbon
dioxide equivalent) for emissions above the thresholds. The levy
would come into effect in 2013/14, and increase by 10 percent a
year until 2020.
The treasury said the draft policy would be published later
Africa's largest economy is also the continent's biggest
polluter and is one of the 20 biggest emitters of greenhouse
Nearly all of South Africa's power is generated by
state-utility Eskom's coal-fired plants, making it impossible
for companies to choose less carbon-heavy electricity.
South Africa is investing heavily to diversify away from coal
but it may take decades before a significant portion of its
energy comes from clean sources.
(Reporting by Wendell Roelf, editing by Agnieszka Flak and Ed