Integrated_Annual_Report_2026 - Flipbook - Page 94
INTRODUCTION
SASOL AT A
GLANCE
DRIVING SUSTAINABLE
VALUE CREATION
EXECUTING
STRATEGY
DELIVERING
BUSINESS VALUE
SUMMARISED FINANCIAL
PERFORMANCE
CORPORATE
GOVERNANCE
SUSTAINABILITY
REPORT
REMUNERATION
REPORT
ASSURANCE/
ADMINISTRATION
ENVIRONMENT CONTINUED
Climate change continued
PARIS AGREEMENT
ALIGNMENT
Sasol is pursuing transformational
changes to its business in a
measured and customer-aligned
manner, while remaining cognisant
of the principles of common but
differentiated responsibilities and
respective capabilities, particularly in
the context of developing countries.
The approach is focused on sustaining
a strong foundational business to
preserve optionality for sustainable
growth, progressively transforming
the business to reduce emissions,
in lockstep with the market and
customers in the transition. In doing
so, Sasol supports the objectives of
the Paris Agreement through efforts to
advance a lower-carbon future and the
evolution of Sasol’s business strategy.
Science-Based Target Initiative (SBTi)
framework for setting emission
reduction targets
The SBTi framework does not yet fully account
for the realities of integrated energy chemicals
businesses like Sasol, particularly those
operating hard-to-abate value chains such as
Fischer-Tropsch (FT) production, where fuels
and chemicals are co-produced and emissions
cannot be disaggregated using current SBTi
methodologies. These structural limitations
make alignment challenging at present;
however, Sasol continues to closely monitor
developments and remains actively engaged in
all relevant SBTi public consultations, including
the Corporate Net Zero Standard and the
Chemicals Sector Methodology.
Sasol’s climate commitments are underpinned by
science-based principles and demonstrate a clear
level of ambition.
Sasol continues to comply with the International
Energy Agency (IEA) absolute contraction
methodology. This approach is recognised for
providing a credible, science-based framework
for establishing and pursuing emission reduction
targets which align with broader global climate goals.
Sasol’s alignment with policy
developments
Supporting Climate Change Policy
and Frameworks
Sasol supports the objectives of South Africa’s
Climate Change Act and its associated regulatory
instruments, including the Nationally Determined
Contribution and the carbon budget system, as
central components of the country’s pathway
towards a resilient, lower-carbon economy. Sasol’s
engagement on the EU Emissions Trading System is
focused on ensuring that Europe’s decarbonisation
policies support, rather than undermine, industrial
competitiveness. Sasol’s approach reflects a
commitment to constructive engagement with
government and stakeholders, while advocating
for implementable, reasonable and viable policy
frameworks that supports South Africa’s energy
security in a just and equitable manner.
A view of Sasol’s policy position and engagement
approach is set out in the updated www CAPS 2026,
which guides Sasol’s alignment with national and
international climate policy developments.
Nationally Determined Contribution (NDC)
Sasol continues to support South Africa’s transition
to a lower carbon-intensive economy in line with the
socio-economic objectives of the Paris Agreement.
Constructive engagement on South Africa’s NDC
is ongoing, recognising the importance of aligning
ambition with implementation realities, particularly
for hard-to-abate sectors and within the context of
broader national imperatives and socio-economic
challenges.
Sasol supports a balanced and pragmatic
approach to achieving South Africa’s NDC,
supported by coordinated action across
government, industry, labour and civil
society. This includes a phased and flexible
implementation pathway that recognises
sectoral and national circumstances, the use
of incentive-based policy mechanisms to
accelerate decarbonisation investment, and
a strong emphasis on economic stability, job
protection and skills transition.
Carbon Budgets and Mitigation Planning
Sasol constructively participates in the
development of South Africa’s carbon budget
system as regulated/provided for under the
Climate Change Act. During 2025, Department
of Forestry, Fisheries and the Environment (DFFE)
published the draft Carbon Budget and Mitigation
Plan (CBMP) regulations and associated draft
technical guidelines for public comment. Sasol
submitted comments during September 2025
amid the public participation process.
Sasol has participated in both the voluntary
and transition carbon budget phases and
has recommended that the first commitment
period be treated as a stabilisation period
to allow industry sufficient time to adapt to
the new methodology before the application
of any punitive higher carbon tax for budget
exceedance. Sasol has highlighted the limitations
associated with the use of a single average
emissions intensity value in determining and
adjusting facility-level carbon budgets and
continues to provide technical input on the
allocation methodology as discussions with the
DFFE progress.
Public participation reflects a commitment
to transparent emissions management
and to supporting the development of a
credible, mandatory framework informed by
sound commercial, industrial and emissions
data. Sasol remains committed to ongoing
collaboration with the DFFE as the carbon budget
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system is finalised and implemented, and
continues to engage on the need for regulatory
clarity, appropriate transition arrangements and
alignment across climate policy instruments to
support South Africa’s NDC.
Carbon tax
Sasol supports the role of carbon pricing as
a key mechanism to drive GHG emissions
reductions and align South Africa with its
climate commitments, while recognising the
need for complementary policy measures to
enable a just and economically sustainable
transition. In this context, Sasol has advocated
for the evolution of the carbon tax framework
to include a structured carbon tax recycling
mechanism, whereby total carbon tax
liabilities may be reinvested into low carbon
projects that accelerate industrial transition,
support reindustrialisation and advance
decarbonisation. This approach is intended
to ensure that carbon pricing delivers both
environmental outcomes and broader
economic value by unlocking investment
in renewable energy, sustainable fuels and
emerging low-carbon technologies. This aligns
with the policy commitment made as part of the
new Industrial Development Strategy approved
by the South African Cabinet in June 2026.
Sasol’s engagement on this matter is
undertaken through a transparent and
collaborative approach with government,
industry bodies, financial institutions and other
stakeholders, with the objective of contributing
to policy design that is effective, practical and
aligned with national development priorities.
Through ongoing technical submissions,
research partnerships and structured dialogue
with policymakers, Sasol seeks to support
a carbon policy framework that incentivises
investment, enhances competitiveness in
carbon-constrained global markets, and delivers
system-wide emissions reductions over time.
For information on Carbon Tax, please refer to Sasol’s FY26
Annual Financial Statement and Form 20F
