Integrated_Annual_Report_2026 - Flipbook - Page 46
DELIVERING
BUSINESS VALUE
SUMMARISED FINANCIAL
PERFORMANCE
CORPORATE
GOVERNANCE
SUSTAINABILITY
REPORT
REMUNERATION
REPORT
STRATEGY CONTINUED
Outcome of qualitative
robustness test
Sasol is progressing the GHG
Emission Reduction Roadmap
towards a 30% reduction target
by 2030 by adopting new
sustainable energy and feedstock
opportunities, improving energy
efficiency and incubating and scaling
new sustainable opportunities
to grow new value chains. Many
of these activities like renewable
diesel, renewable energy and
bio-based feedstocks, are housed
in our Business Building. The
effect of these new lower carbon
opportunities will be felt across
Sasol both in South Africa and
internationally.
INTERNATIONAL CHEMICALS
Here Sasol applies a grading system
to assess different elements of
the Future strategy to 2030 by
convening a multi disciplinary
team from across the business
to evaluate the robustness of
the strategy across a range of
themes under each of the four
scenarios. These themes include
potential stakeholder responses
including from shareholders,
non-governmental organisations
and government; the strategy’s
dependence on policy and regulatory
changes; fluctuations in demand for
liquid fuels and chemicals; market
and competitive dynamics affecting
liquid fuels and chemicals; and
the executability of the strategy,
including considerations such as
the operating model, partnerships,
capabilities, skills availability and the
financial framework.
Approximate temperature target (°C)
SA FUELS AND CHEMICALS BUSINESS BUILDING
Qualitative robustness
testing of the strategy
to FY30
Across all scenarios, demand for chemical products is
expected to expand, largely driven by demographic growth
and rising living standards. Within this context, IC remains
positioned as an enabler of more efficient resource use—
supporting lower energy intensity, reduced waste, and improved
product performance across value chains. Its portfolio already
reflects this shift, offering a mix of conventional and more
sustainable solutions, including biosurfactants, palm free
alternatives, and lower carbon-intensity synthetic alcohols.
Despite this progress, the commercial environment in the
near term remains constrained. Customers continue to
prioritise cost competitiveness, limiting their willingness to
recognise or pay for sustainability-linked product attributes.
As a result, value capture from these offerings remains
gradual rather than immediate.
Recognising South Africa’s developmental status,
Just Transition imperatives and energy realities, the
pace of transition is likely to lag that of more advanced
economies. This underpins relatively stable demand through
to 2030. However, in transition-led scenarios such as
Cooperative and Net Zero, the direction of travel shifts
more decisively – requiring faster emissions reduction and
a gradual repositioning away from coal-based feedstocks.
External factors further shape the outlook. A sustained lower
oil price environment compresses earnings resilience, while
in a fragmented world, elevated trade barriers increase input
costs and dampen overall demand across fuels and chemicals
markets. Although the carbon profile of South African
chemical production is increasingly under scrutiny, it is not
expected to materially limit market access in the near term.
In response to these structural shifts, Sasol is progressively
repositioning its portfolio towards lower-carbon and circular
value chains. Key focus areas include sustainable aviation
fuel (SAF), renewable energy integration, renewable diesel,
alternative feedstocks, and lower-carbon chemical products.
Sasol remains committed to SAF, with future involvement
focused on technology-led collaborations, targeted project and
partnership opportunities, and market-development activities
that are strategically aligned and commercially supported.
Strong strategy resilience to variations and uncertainties
>3
2–3
1.5–2 ~1.5
From an execution perspective, the strategic direction is
established and supported. Delivery will depend on maintaining
operational discipline – managing cost structures, aligning
products with evolving market requirements, ensuring effective
market access, and sustaining the required technical and
commercial capabilities. Current indications suggest alignment
between management ambition and shareholder expectations.
Under the Cooperative and Net Zero scenarios, the operating
context becomes more demanding. Decarbonisation
requirements accelerate, while competitive intensity increases
as both incumbents and new entrants scale greener and
circular product alternatives. In parallel, regulatory and cost
pressures rise – most notably through the phase-out of free
Emissions Trading Scheme allocations in Europe post-2026,
which introduces additional compliance costs. Together, these
dynamics are likely to weigh on margins and returns relative to
more moderate transition pathways.
Importantly, these initiatives build on existing strengths rather
than requiring entirely new capabilities. Sasol can leverage
its established infrastructure, market channels, customer
relationships, proprietary Fischer–Tropsch technology, and
broad internal skills base to support this transition.
This transition pathway serves a dual purpose: lowering
the emissions intensity of the domestic value chain while
creating new avenues for growth. In the more transitionaligned scenarios, expanding demand for greener products
provides a supportive backdrop for these emerging
businesses. However, this opportunity is not without
constraints – global competition for critical skills, technology,
and capital equipment is likely to intensify, placing upward
pressure on costs and execution timelines.
Beyond commercial outcomes, there are broader system-level
implications. The development of new energy and chemical
value chains has the potential to contribute to South Africa’s
Just Energy Transition, particularly through job creation and
the stimulation of local industrial activity. At the same time,
the physical impacts of climate change – such as increased
weather volatility and infrastructure stress – are expected to
become more pronounced, especially in the Fragmented and
Current Pathway scenarios.
Adequate robustness, may show some performance vulnerability under certain circumstances
SASOL INTEGRATED REPORT 2026
ASSURANCE/
ADMINISTRATION
45
Net Zero:
EXECUTING
STRATEGY
Cooperative
World:
DRIVING SUSTAINABLE
VALUE CREATION
Current
Pathway:
SASOL AT A
GLANCE
Fragmented
World:
INTRODUCTION
Lower robustness: sensitivity to variations in certain external drivers
