Big energy users oppose proposed SA carbon tax law
BIG energy users, including SibanyeStillwater and ArcelorMittal’s local unit, yesterday opposed plans by South Africa to enact longdelayed carbon tax laws in 2019, arguing the levies were unaffordable and should be scrapped or delayed.
The carbon tax has already been postponed at least three times since first being mooted in 2010, after mining companies, steel firms and stateowned power utility Eskom said it would erode profits and push up electricity prices.
Former finance minister Malusi Gigaba said last month that SA would implement the carbon tax from January next year – part of a raft of tax changes to plug a revenue hole.
The new law would affect about 1 000-1 500 companies and 75% of national emissions.
It proposes a tax rate of R120 per ton of carbon dioxide equivalent and states that total taxfree allowances during the first phase until 2022 can be as high as 95%.
“Sibanye-Stillwater’s position on the imposition and implementation of a carbon tax remains the same, that is, a total rejection of the carbon tax in any shape, form or quantum,” the gold and platinum miner said.
It delivered its opinion in a written presentation to Parliament at the start of public hearings on the second draft carbon tax bill released in December.
Developed in line with the polluter pays principle, the proposed carbon tax bill includes staggered increases and tax breaks in the early years, allowing companies to pay six rand to R48 per ton in the first phase, the national Treasury said.
South Africa ratified the Paris climate change pact two years ago and has pledged to cut emissions by almost half by 2030. Industrial firms said the proposed tax failed to take into account a lower carbon path already adopted, will create policy uncertainty and diminish South Africa’s investment allure.
ArcelorMittal SA opposed the tax bill on the grounds that it would hurt competitiveness when it was struggling with cheaper imports and weak demand.
“When considering 2016 and 2017 financial figures, the estimated carbon tax payable would have affected Ebitda figures by 57% to 100%,” ArcelorMittal SA said.
The company said its estimated carbon tax liability would be R100m a year and wanted changes to be made, including additional tax incentives to protect struggling companies. – Reuters