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Cape Town - The government 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% 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 10%.
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 minimise 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 R120 per tonne of CO2e (carbon
dioxide equivalent) for emissions above the thresholds. The levy would come
into effect in 2013/14, and increase by 10% a year until 2020.
The Treasury said the draft policy would be published later
this year.
Africa’s largest economy is also the continent’s biggest
polluter, and is one of the 20 biggest emitters of greenhouse gases worldwide.
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.
