SASOL Integrated Report 2025_Final_28 August 2025 - Flipbook - Page 81
INTRODUCTION
ABOUT SASOL
STRATEGIC OVERVIEW
BUSINESSES
ESG
REMUNERATION REPORT
DATA AND ASSURANCE / ADMINISTRATION
ENVIRONMENT continued
CLIMATE CHANGE continued
Paris Agreement alignment
We support the Paris Agreement and have prioritised Sustainable Development Goal 13 (Climate Action). We accept the mainstream climate science assessed
by the Intergovernmental Panel on Climate Change (IPCC), and align with the ambition of reaching net zero CO2 emissions by 2050. We recognise the role of
business in managing climate risks, enabling opportunities that drive societal value, and strengthening adaptation and resilience in a changing climate.
Science-based framework for setting emissions reduction targets
Sasol remains committed to aligning its decarbonisation efforts with
global and national policy direction while enabling sustainable
industrial development.
The SBTi is progressing its Chemicals Sector Criteria and is currently in
the second public consultation phase, with pilot testing having closed in
January 2025. The final criteria are expected in the third quarter of 2025,
at which point we will assess their relevance to Sasol’s operations, given
that the current Oil and Gas methodology is not well-suited to our
unique processes.
Sasol continues to comply with the International Energy Agency (IEA)
absolute contraction methodology. The benefit of this is that we follow
a credible, science-based framework for setting and pursuing emissions
reduction targets, aligned with global climate goals.
We are continuing to assess the applicability of alternative frameworks
such as the ISO 14068-1:2023 Carbon Neutrality Standard, particularly
given the unique characteristics of our optimised ERR, which is non-linear
and back-end loaded. While the International Organization for
Standardization (ISO) standard offers a flexible and practical structure
that may complement our approach, we recognise the need for careful
evaluation to ensure alignment with our strategic trajectory and stakeholder
expectations. Our assessment remains ongoing as part of broader
efforts to enhance transparency and credibility in our emissions
reduction reporting.
Sasol’s alignment with policy developments
Climate change Act: South Africa’s Climate Change Act and policy
developments
We welcome the introduction of a more structured and transparent
regulatory environment with the Climate Change Act (assented to on
23 July 2024).
As a company operating in a hard-to-abate sector, Sasol acknowledges
the importance of advancing South Africa’s Nationally Determined
Contributions (NDCs) in a responsible and context-sensitive manner.
Sasol supports a balanced approach that aligns with South Africa’s
national emissions trajectory, recognising the need to enhance climate
ambition without compromising energy security and economic stability.
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Clear and transparent tracking of progress against the NDC targets will be
essential for maintaining credibility and demonstrating South Africa’s
contribution to global climate goals.
Carbon tax and carbon budget
South Africa’s carbon tax and carbon budget framework is evolving, with
important implications for Sasol’s emissions profile. While final carbon
budget regulations are still pending, the introduction of mandatory
budgets is expected to support the country’s climate commitments. Sasol
has actively participated in both the voluntary and transitional phases of
the carbon budget process, with defined budgets allocated for each period.
We remain committed to constructive engagement with DFFE to support
the development of a transparent and workable carbon budget system.
From January 2025, South Africa’s carbon tax rate increased to R236 per
tonne of CO2e, with significantly higher penalties of R640 per tonne set
to apply from 2026 for emissions that exceed allocated carbon budgets.
Sasol’s net carbon tax payment for FY25 (CY24 emissions) was
approximately R1,71bn, after offsets and electricity levies.
Phase 2 fiscal policy updates include measures that may support
industry-wide efforts to transition to a lower-carbon economy.
• Retention of the basic tax-free allowance: The government has decided
to maintain the basic tax-free allowance at 60% until at least 2030.
This is a significant shift from earlier proposals that aimed to reduce
this allowance starting in 2026. For Sasol, this retention provides
greater fiscal predictability and supports ongoing investments in
emission-reduction technologies.
• Increase in carbon offset allowances: The allowable percentage for
carbon offsets has been increased, offering Sasol more flexibility to
invest in certified offset projects. This change can effectively lower
Sasol’s taxable emissions and associated costs.
• Extension of energy efficiency incentives: The Section 12L energy
efficiency tax incentive has been extended through 2030. This extension
encourages Sasol to continue enhancing energy efficiency within its
operations, leading to both environmental benefits and potential
tax savings.
Our operating context is increasingly defined by the realities of climate
change, the growing impact of carbon pricing and heightened stakeholder
Refer to page 13 for further information.
expectations.
