Carbon Tax has started in South Africa - are you prepared for 2022?
Since June 1, companies in South Africa have to pay up to R120 per ton of CO2. This tax could put your business at risk – and it will increase until 2022 . On this page, we help you understand the new carbon tax, how much you could end up paying and what you can do now to make your business future-proof.
Who has to pay?
What do I have to pay for?
The South African Carbon Tax has been set in place by the government to fulfill the Paris Agreement.
Essentially, every industrial company has to pay carbon tax in South Africa.
3 kinds of emissions are being taxed:
- Fossil fuel combustion emissions
- Fugitive emissions (to air and water)
- Industrial processes
Do you want to understand the fundamentals of carbon pricing? We have written down how carbon taxation works and what the background of carbon pricing is.
How much do I have to pay?
Officially, the carbon tax is set to R120 / ton of CO2-equivalent. However, there is a transitional period until the tax is set to full force in 2022. During that transitional period, there is a tax-free allowance of 70%.
This means that, right now, you only have to pay for 30% of your emissions.
But there is 1 big risk
During phase 1 of the South African Carbon Tax, there are a lot of ways for businesses to pay less. However, this will change very soon. If your business doesn’t start preparing for 2022 now, carbon tax could cost you more than 50% of your profits.
We have created a free carbon tax calculator that allows you to calculate the tax you will have to pay for your specific business case.