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National Environmental Management: Air Quality Act, 2004 (Act No. 39 of 2004)

Regulations

Submission of "Subsequent Pollution Prevention Plans"

3. Proposed process to manage the carbon budgets for the period of 01 January 2021 to 31 December 2022

 

(1) The Department of Environment, Forestry and Fisheries is in the process of developing the Climate Change Act. As soon as the proposed Act is promulgated, the Department will publish Regulations for Carbon Budget and Mitigation Plans, currently known as pollution prevention plans). These will be one set of Regulations integrating the two instruments of carbon budgets and mitigation plans.

 

(2) Furthermore, the Department is also preparing the carbon budget allocation methodology to be applied for the mandatory carbon budget system which is anticipated to commence with the second phase of the carbon tax on 1 January 2023. The methodology will be consulted with stakeholders and finalized within the current financial year, namely before the end of March 2021. In the current phase of the carbon tax, (2019 to 2022), companies receive a five (5) per cent carbon budget allowance under the carbon tax once they take up a carbon budget on a voluntary basis.

 

(3) These carbon budgets have been allocated for the period 2016 to 2020 and they cease to exist by 31 December 2020. The lifespan of the current pollution prevention plans which have been submitted and are currently being implemented, in respect of greenhouse gases, as per the National Pollution Prevention Plans Regulations 2017, issued under section 53(a), (o) and (p) read with section 29(3) of the Act, also ends on 31 December 2020.

 

(4) Once the proposed Climate Change Act is promulgated, the new carbon budgets Regulations will be linked with the mitigation plans. The Department would therefore like to encourage companies to optionally use the period between 1 January 2021 and 31 December 2022 as a pilot period to pilot the linking of the carbon budgets and mitigation plans with the view that, by the time the carbon budgets become mandatory in 1 January 2023, they would have been using the new system already.

 

(5) The Department also wishes to use the pilot period to test the new methodology for allocating the carbon budget and encourage companies to volunteer to use the new methodology once finalised. Thus, the methodology which will be used during the mandatory phase, will be tested during this period.

 

(6) As per the current carbon tax implementation, companies will still qualify for the 5% carbon budget allowance during this pilot period and the Department will continue to provide a clearance to companies for submission to the National Treasury/South African Revenue Services in order for them to fulfill the requirement for the carbon budget allowance under the Carbon Tax Act 2019, (Act No. 15 of 2019).

 

(7) Please also take note that, once the proposed Climate Change Act becomes effective, Regulations for Carbon Budget and Mitigation Plans will be developed, accompanied by the carbon budget methodology and requirements for content of mitigation plans in preparation for implementation beyond the pilot period transitional arrangement proposed above.