News from EcoMetrix on Energy/Carbon Performance Management and Climate Change
Draft Carbon Tax Regulations Published – Is your business eligible to generate Offsets? (June 2016)
Following the carbon tax offsets paper in 2014, national Treasury has released the draft regulations on 20 June 2016. Comments can be provided until the 29th of July 2016. The draft regulations further detail the working of the offset mechanism and most importantly the eligibility of organisations and activities to generate offsets. However, it will depend on many different project activity features whether one is eligible to use greenhouse gas emission reductions achieved under the carbon tax.
Important features include whether one already benefits from participating under another governmental program or regulation, the date of approval of the offset project, whether it concerns sectors and activities defined as falling under the tax net or not and whether the project activity reduces Scope 1 or Scope 2 emission. Just to name a few. For further details please go to Draft for Comments Published
Draft National GHG Emission Reporting Regulations Published for Comments (June 2016)
On the 4th of June the DEA gazetted the draft regulations for comment within 30 days (deadline 7th of July). The regulations stipulate what organisations are obliged to report their Greenhouse Gas emissions to the South African National Atmospheric Emissions Inventory System (NAEIS). Whether one is required to report depends on the types of activities conducted and if the related total capacity installed is over the specified threshold. Activities and thresholds are detailed in Annexure 1 to the regulation. Download Regulations
Section 12B Tax Act – A 100% Allowance for Small Scale Solar (March 2016)
Section 12B allows for a deduction from corporate income tax on a 50|30|20 basis over three years in respect of investments in electricity from wind, energy, hydro (<30 MW) and biomass as well as the production of bio-diesel and bio-ethanol. From January 2016, a specific provision is made for small scale solar PV for self-consumption up to 1,000 kW, allowing a 100% investment allowance in year one.
For many small to medium size businesses, this allowance can make solar electricity financially more attractive than grid electricity. However, make sure you choose the best incentive available for your specific business as the compounding of incentives is generally not allowed. Download 12B Abstract
Report – Facilitation of the Large-Scale Uptake of Biogas for Transport (Feb 2016)
In 2015, EcoMetrix has conducted a study for the Department of Environmental Affairs of South Africa regarding the economic and practical potential of compressed biogas (CBG) as an alternative transport fuel providing inputs to the potential further development of policies by the South African government. In support of this main objective, the study targeted the following results:
In February this year the biogas report was published: Download Biogas Report
Energy Efficiency Tax Incentive increased from 45c to 95c per kWh (Jan 2016)
Following the recently promulgated Taxation Laws Amendment Act, Act No. 25 of 2015, the Section 12L energy efficiency tax incentive has been amended and improved to increase the amount of the (measured and verified) deduction from 45c to 95 cents per kilowatt hour or kilowatt hour equivalent of energy saved. Furthermore, the increased rate is deemed to have come into operation on 1 March 2015 and applies in respect of years of assessment commencing on or after that date. (Source: SANEDI)
Policy Alert – Draft National GHG Emission Reporting Regulations (May 2015)
With the introduction of this fifth regulation in the space of GreenhouseGas (GHG) emissions it will become even more important for organisations to align monitoring and reporting efforts to prevent duplication of activities. The GHG Reporting Regulation will require companies to report annually on their GHG emissions specifying different methods depending the sector it belongs to. Annexure 1 to the regulation seems to include all industrial sectors including waste and food processing. Agriculture is however excluded from the list. Comments can be provided until the 10th of July 2015.
To download the regulations click this link: Draft National GHG Reporting Regulations (369)
Funding Alert – EEP Call for Innovative RE/EE Projects and Large Scale Demos (Feb 2015)
The Energy and Environment Partnership Programme focuses on facilitating access to energy and inclusive growth, while contributing to climate change mitigation. This is done by supporting eligible renewable energy (RE) and energy efficiency (EE) projects in thirteen countries in Southern/East Africa among which South Africa. The types of projects eligible for support under the current call for proposal (deadline 13 April 2015) are RE/EE projects or businesses that are close to commercial maturity but require bridging finance and large scale RE/EE demonstration projects that show good potential for creating new markets.
Press Release – Five Reasons for allowing Offsetting within SA’s Carbon Tax Net (Dec 2014)
Now the dust has settled regarding the debate on the Carbon Offsets Paper published by National Treasury in April this year, EcoMetrix Africa would like to bring forward the following considerations as food for thought when finalizing the design of this element of the proposed South African Carbon Tax in 2015:
1. Level Playing Field – Current Design Distorts Level Playing Field.
2. Least Cost Option – Current Design may favour more expensive Options outside the Tax Net.
3. Collaboration within the Tax Net – Collaboration between Affected Parties is not incentivised.
4. Price Signal – Stronger Price Signal while Offsets within the Tax Net do not cost the Tax Payer a Cent.
5. Critical Mass for Markets – Allowing Offsets within the Tax Net creates substantial Trading Volumes.
For the full press release press this link: EcoMetrix Press Release - Ctax Offsetting (455)
For the carbon tax offset paper press this link: carbon offsets paper (446)
For the response from National Treasury to Comments: response to comments (405)
Santa Shoebox Project – Share the Joy of Giving (Oct 2014)
Help the Santa Shoebox Project distribute festive season gifts to thousands of underprivileged children in South Africa and Namibia by pledging your Santa Shoebox. EcoMetrix participated in this project supporting a group of children with a generously filled shoebox including both essentials and presents to make a small contribution to a joyful festive season for some underprivileged children in South Africa. If you are interested to also make a contribution, visit the website here.
Carbon Offset Plan lacks Basic Understanding of Carbon Standards (May 2014)
National Treasury’s Carbon Offset Paper published for public comments in April is a step in the right direction although it requires a basic understanding of the carbon standards that are proposes to be included in the offset mechanism says Henk Sa, Partner at EcoMetrix Africa. Four standards are proposed to be included: Clean Development Mechanism (CDM), Verified Carbon Standard (VCS), Gold Standard (GS) and Climate, Community and Biodiversity Standard (CCBS). It is important to note that the GS and CCBS are not actual standards under which emission reductions can be certified but rather operate as add-ons that can be applied on top of the CDM and VCS. The GS consists of a number of additional requirements that is placed on CDM and VCS projects and is limited to activities within Renewable Energy, Energy Efficiency, Waste Handling and Disposal and Land Use and Forests sectors. The CCB Standard on its own does not lead to the delivery of quantified emissions reductions certificates and should be used in combination with CDM and VCS. The use of offsets, a cap and trade mechanism included in the carbon tax is probably the most novel feature of the tax, but for it to be effective and efficient, it is important that National Treasury takes on board advise for a full understanding of global carbon basics, something which currently is lacking.
Carbon Offset Plan marginalizes Offset Opportunities (April 2014)
End of April the South African government released the Carbon Offsets Paper (click link). Although this paper provides further clarity on how the carbon tax offset mechanism could be implemented, the ineligibility criteria mentioned may seriously limit offset opportunities. Lodewijk Nell, Partner at EcoMetrix Africa indicates that, based on a quick scan, the offset potential might be reduced from the anticipated 34 million tonne/year (see Table 4 of the paper) to 20 million in Phase 1 (2016-2020) and 10 million in Phase 2 (after 2020) when considering the exclusion of sectors and activities within the tax net. As the ineligibility criteria are not cast in stone, it would be beneficial to assess this and provide feedback to Treasury. Stakeholders are invited to provide comments on the paper before the 30 June 2014.
Cape Town selected as Earth Hour Capital – Switch Off on 29 March 2014, 8:30 – 9:30 pm local time
Join millions of people globally, switching lights off for an hour to raise awareness for the planet. Earth Hour is an recurring annual event initiated by the WWF. Cities all around South Africa have called upon their residents to switch of the lights in order to show their commitment to the fight against climate change. In Johannesburg for example, all public buildings and landmarks will go dark during the hour. An Earth Hour Concert will be held in Soweto, while the Joburg Zoo in Parkview will have a public lights out at the zoo camp. At the Orlando West Regional Park, the official South African Earth Hour celebrations will be held. Click link for more
Southern African Renewable Energy Program receives Govt approval (March 2012)
EcoMetrix Africa’s Southern African Renewable Energy (SARE) Programme has received approval from the South African Designated National Authority (DNA) to go ahead with the programme. The programmes promotes the development of renewable energy projects that supply energy to the grid. Technologies include solar, hydro, wind and geothermal. The programmes will be accessible in most countries on the sub-continent including South Africa, Mozambique, Botswana, Zimbabwe, Namibia, Zambia, Lesotho and Swaziland. For more information on this topic please contact us.
Southern African Solar Technologies Programmes receives Govt approval (February 2012)
EcoMetrix Africa’s Southern African Solar Thermal Energy Programme (SASTE) and Southern African Solar Electrical Energy Programme (SASEE) have received approvals from Lesotho to go ahead with the programmes. The programmes allow distributors and retailers of small scale solar technologies such as household PV panels and solar water heaters to access the international carbon markets and reduce the per unit price. The programmes will be accessible in most countries on the sub-continent including South Africa, Botswana, Zimbabwe, Namibia and Swaziland. The CDM programmes were initiated to support uptake of small scale solar technology which reduces household level reliance on fossil fuels. For more information on this topic please href=”http://www.ecometrix.co.za/contact-us/”>contact us.
SA urged to act before EU carbon project window closes in December 2012 (25 January 2012)
Engineering News reports from a Green Power Conference Event in Johannesburg that South African developers of Clean Development Mechanism (CDM) projects are urged to finalise their applications for registration of such project with the UN during the 1st quarter of 2012, or face bing excluded from the key European market. There was an agreement in Durban last month to extend the Kyoto Protocol beyond 2012, but the EU, the dominant market currently for carbon credits, had already confirmed that it would accept credits only from registered project from least developed countries after 2012. EcoMetrix Africa MD Henk Sa speaking at the event, indicated that he foresaw the evolution between now and 2015, of multiple regional or country markets which are unlikely to be mutually exclusive. For more information on this topic please contact us.
Innovators Wanted: EcoMetrix Africa is looking for a Carbon Analyst (11 October 2011)
EcoMetrix is looking for an innovative and resourceful recent graduate to fill an entry level position as a Carbon Analyst. The Carbon Analyst is responsible for evaluating the carbon aspects of manufacturing and logistical processes, the economic feasibility of new technology and assisting in the registration of Clean Development Mechanism projects. For more information please visit our Careers page.
The Future of Carbon Markets in South Africa: SA could lose out on carbon financing if EU moves ahead with LDC plan (22 September 2011)
Engineering News reports that South Africa risks losing carbon financing flowing from the Clean Development Mechanism (CDM) as the European Union (EU) – the largest buyer of Kyoto Protocol carbon credits – has indicated it would only purchase credits from projects located in least developed countries (LDCs) from 2013. There is concern among those involved with CDM projects in South Africa that the issue is being neglected, as other sources of funding, such as the yet to be established Green Climate Fund (GCF), appear to be gaining favour and popularity at the climate change negotiations, with developing countries hoping to tap into these ‘new’ sources of funding. Lodewijk Nell (Partner at EcoMetrix Africa), Andrew Gilder (Director, IMBEWU Sustainability Legal Specialists (Pty) Ltd) and Brett Jordaan (VP Global Carbon Markets, Evolution Markets) lead a “Thought Leader” discussion on this topic at Imbewu’s Rosebank offices on 21 September 2011 and were involved in a live discussion on CNBC Africa on 22 September 2011. For more information on this topic please contact us.
Red Cap Kouga Wind Farm, Eastern Cape, passes key environmental and community milestones (22 July 2011)
Renewable energy developer Red Cap has received environmental approvals for a phased wind farm project in the Eastern Cape and has also concluded an agreement with the Industrial Development Corporation (IDC) to induce direct community involvement in the project reports Engineering News.
SA Delegation visits Global CCS Institute Australia (13 July 2011)
A delegation of CCS experts lead by the South African Centre for CCS, is visiting several CCS sites in Australia where capturing and storing Carbon Dioxide (CO2) is put into practice. The objective of this trip is to learn from the extensive Australian CCS experiences and take this forward in assessing and detailing a plan for CCS demonstration in South Africa. As mentioned in the LTMS, CCS can make a significant contribution to SA’s mitigation strategy starting with a CSS demo by 2020 storing 20 megaton CO2 per annum. However, there are some major considerations with regard to storage capacity, technology to be employed and development cost. Lodewijk Nell, EcoMetrix’ CCS Expert on the delegation says: “It is of imminent importance to gather international knowledge from several sources in order to identify opportunities and risks involved in the different development stages leading to demonstration. In this way, we can fast track the process which started relatively late in South Africa while on the other hand getting a good grip on the mitigation potential, implementation risk and last but not least, the development cost involved.” The delegation has visited the Otway project in Queensland where a successful test injection has been completed using a depleted gas reservoir as a storage site and a second test injection project is on the way making use of a saline aquifer. The latter is a type of storage reservoir that is also offers substantial storage possibilities in South Africa. For more information please contact us.
Government confirms inclusion of price competition in first (Refit) renewables round – CDM now more important (4 July 2011)
The South African government has confirmed that price competition will feature in the procurement process for the first round (1,025MW available) of renewable energy projects with the 2009 renewable energy feed-in tariffs (Refit) to be used as a “ceiling” price against which project developers should tender their offers. Once the National Energy Regulator of SA has concurred with this strategy, National Treasury will release the tender, along with the selection criteria and a pricing dimension. Criteria expected to be included are technical viability, localisation, job creation, grid connectivity, environmental acceptability and local economic development spinoffs. During the request for Information (RFI) process, the government received information relating to proposed projects totalling 20,000MW (many of which were prepared on the basis of the 2009 Refit documentation). There is currently uncertainty in the market around Refit’s adverse impact on the financial eligibility of renewable energy projects under the CDM. However, REFIT does not necessarily exclude projects from being registered under the CDM. For more information please contact us.
CDM will continue but in what form? UN (22 June 2011)
Last week Christiana Figueres (head of the UNFCCC secretariat) commented in Bonn that the discussion around CDM is concerned with whether the CDM will undergo modification or continue as it is with additional market mechanisms, reports Reuters. She assured journalists that Parties to the Kyoto Protocol were not discussing the termination of the carbon market as a mechanism to combat climate change. The debate continued in South Africa yesterday where Andrew Gilder, of Embewu Sustainability Legal Specialists, and Henk Sa, of Ecometrix Africa, presented a joint analysis of the carbon market in South Africa and the opportunities and challenges facing project developers after the end of the Kyoto Protocol in 2012 to attendees at the Solar South Africa conference in Johannesburg. They went on to provide further insight to renewable energy project developers at the South African National Energy Association lecture later in the evening, explaining how project developers could benefit from both the South African REFiT program and the CDM. For a copy of the analysis presented please contact us.
Red Cap Kouga Wind Farm looks to the CDM, Deadline Extended (16 June 2011)
The Red Cap Kouga Wind Farm Development Company, assisted by EcoMetrix Africa, is currently inviting interested and affected parties to submit comments in regard to the registration of the project under the CDM. The deadline for submitting comments and queries regarding the CDM registration of this project has been extended to the 15th July 2011. More information is available here.
Breaking News: Revision of smelter energy efficiency methodology approved (1 June 2011)
EcoMetrix Africa recently submitted a request for revision of AM0038, a methodology for improving the electricial efficiency of submerged electric arc furnances under the CDM. The revision was approved today during the open session of the CDM Executive Board meeting (EB61), in Bonn, Germany. Under the revised methodology the projects are no longer restricted to SiMn smelters but rather submerged electric arc smelters producing only one of a number of alloys are allowed to claim carbon credits when improving electrical efficiency. Henk Sa, Managing Director at EcoMetrix Africa, commented that they have already recieved significant interest from South African smelter operations and have begun work on at least one PDD at the time of writing. He further commented that with the impending carbon tax, South African heavy energy users were eager to improve efficiences wherever possible, and the CDM provides a mechanism to fund energy efficiency projects that should not be overlooked by industry.
Carbon Capture Readiness Workshop. (25 May 2011)
Together with the South African Centre for CCS, EcoMetrix executed a workshop with industrial and governmental stakeholders in what way South Africa can prepare itself for the implementation of CCS in South Africa. Lodewijk Nell, Director – Advisory at EcoMetrix Africa, noted “CCS can make a substantial contribution to SA’s ambitious emission reduction targets. However, this ambition can only be realized if we prevent a lock-in of carbon by building large new industrial facilities that do not take into the futuire capture of CO2 from their process streams.”
Red Cap Kouga Wind Farm, Eastern Cape, looks to the CDM (16 May 2011)
The Red Cap Kouga Wind Farm Development Company, assisted by EcoMetrix Africa, is currently inviting interested and affected parties to submit comments in regard to the registration of the project under the CDM. The project involves the development of a 300MW wind farm, in several phases, and would make a signifcant contribution to the electricity supply of the Eastern Cape. The project is located near Humansdorp. More information is available here.
EcoMetrix discusses the Clean Climate Fund & Trevor Manuels appointment as well as the mooted South Africa Carbon tax. (6 May 2011)
EcoMetrix Africa welcomes Mr Manuels appointment to the Clean Climate Fund, and concludes that whilst a carbon tax offers a real option for South Africa to reduce its emissions, there will be economy wide impacts that need to be addressed before embarking on this course. View the CNBC Africa interview here.
EcoMetrix and Ellies Holdings Launch CDM Programme in Southern Africa. (6 May 2011)
EcoMetrix Africa launches two solar technologies programmes under the UNFCCC’s Clean Development Mechanism. Under the programme project developers, technology supplies and other parties can claim carbon credits for switching from fossil fuel energy sources such as electricity to solar technology. Ellies Renewable Energy, a division of JSE listed Ellies Holdings, and In-Toto Solutions have signed on as the first participants in the programme. Under the programme they will make solar technologies such as heat pumps, photovoltaic panels and solar water heaters more accesible to both consumers and industry. Read more about the programme here.