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Carbon Budgets

The Department of Environmental Affairs is in the final stages of developing the post-2020 climate change mitigation system for South Africa. The system proposes so-called Carbon Budgets for the following entities:

  • Those with electricity generation for sale as their main activity
  • Those with reportable emissions under the recently proclaimed National GHG Reporting Regulations, but that do not generate electricity for sale as their main activity

The objective of the system is to allocate a certain fixed amount of carbon space (i.e. allowable GHG emissions) to entities based on historical emissions. The Carbon Budgets are set per year over three consecutive five-year periods (i.e. 2021–2025, 2026–2030 and 2031–2035). Over time, the total carbon space allocated will be brought in line with the national emissions trajectory, in order to fulfill the country’s international obligations entered into under the Paris climate agreement. As it stands, the national emissions trajectory is projected to peak around 2025, plateau up to 2035 and then decline despite growing economic activity.

The Carbon Budgets system as proposed can have a significant impact on your business. To discuss the potential implications, please find our contact details here.