Sasol Climate Change Report 2023 - Book - Page 24
INTRODUCTION
TRANSFORMING FOR RESILIENCE
GOVERNANCE
CLIMATE ADVOCACY AND POLICY
DATA AND ASSURANCE
RESILIENCE OF OUR PORTFOLIO CONTINUED
Quantitative robustness testing to 2030
Our quantitative stress test aims to provide steer on the robustness of each business area and our overall portfolio. Our GHG targets, the
physical impacts of a changing climate on our business and opportunities in a low-carbon future are included in this assessment.
commercial customers to preserve returns. We
are taking market positions in advanced mobility,
aligned to our strengths.
• We are exploring new value chains in renewable
power, mobility, green hydrogen, sustainable
carbon and other growth positions away from a
fossil-fuel profit base, especially those that have
positive EBIT prior to 2030. These new value chains
support local job creation as part of the energy
transition.
Synthetic alcohol plant, Secunda, South Africa
The results of our robustness testing are reflected in
the graphic alongside and indicate the following,
which directly shaped the Future Sasol strategy:
• The increasing unacceptability of coal as a
feedstock when moving from the Current Pathway
to the Net Zero World is evident. As a result, we
will gradually reduce our coal exposure, which
reduces our GHG emissions profile over time. We
are also driving towards a diversified feedstock
mix that incorporates incremental gas and other
low-carbon feedstocks, when affordable.
• Local market demand for liquid fuels is more
challenged in the Net Zero World, compared
to the Current Pathway, due to the increased
penetration of alternative mobility technologies.
However, demand is relatively robust until at least
2030. From a relevancy perspective, Sasol strives
to remain a partner of choice for mobility and
• SAF currently relies on regional and countrylevel legislated blending mandates and grant
funding. Although this regulatory landscape is still
under development, there are many initiatives
progressing internationally that are shaping the
transition in the aviation sector. Sasol ecoFT
is actively monitoring the landscape and is in
discussion with potential partners to progress
activities, develop pilot and proof-of-concept
projects as green hydrogen technology and
sustainable carbon initiatives progress down the
cost curve.
• Continued growth in the chemicals value chain
globally is beneficial. Products in the Sasol
portfolio enable lightweighting and energyefficiency improvements, as well as improved food
packaging, personal care and hygiene. Sasol is
undertaking further assessments to understand
the potential impact of the introduction of
carbon border taxes on our South African product
portfolio.
• The potential physical impacts of climate change
in all scenarios are closely monitored. These
impacts include loss of production, damage to
infrastructure and supply-chain interruptions. Our
newer facilities are better designed to deal with
potential climate change impacts; internationally,
local support structures and cooperation to assist
in times of need are stronger, providing more
robustness. There are potentially fewer impacts
in the Net Zero World compared to the Current
Pathway. As a result, required sustenance capital
These areas or signposts include:
expenditure declines. Sasol continues, however,
to invest to reduce emissions and build resilience
to changing weather patterns through updating
design specifications, maintenance programmes
and emergency preparedness plans.
• pace of technology development, commercialisation
and implementation, access to new technologies
and an enabling environment including the cost of
electrolysis and renewable power generation;
We undertook a quantitative evaluation to assess
the financial impact of the various outcomes on our
businesses. The dotted line in the graphic below
indicates the 2022 indexed values for profitability
and oil price, which can be compared to the index
values for each scenario in 2030. Quantitative
robustness of Sasol’s 2030 earnings relative to 2022
(with mitigation) was assessed.
In the Current Pathway, profitability in 2030 is
greater compared to 2022. The lower profitability in
the Cooperative and Net Zero worlds are largely
driven by lower oil-price outlooks, which also drive
lower refined product and chemical prices. Several
areas were highlighted; these are being tracked and
monitored to reduce vulnerabilities in our strategy.
• regulatory and policy changes impacting products
and market demand as well as SAF, green
hydrogen, and others in various regions;
• partnering and relationship trends and
requirements;
• carbon border taxes in different regions;
• carbon tax design, especially in the South African
context;
• stakeholder expectations in the different regions
of our operations;
• financing and funding trends and requirements;
• sustainability obligations and associated costs or
investments required; and
• macroeconomic drivers such as oil, rand/dollar
exchange rate, inflation, economic growth, product
prices and feedstock prices.
Quantitative
robustness
testing of Sasol’s
2030 earnings
relative to 2022
(with mitigation)
SASOL CLIMATE CHANGE REPORT 2023
Greater than
2022
2022
Less than
2022
Current
Pathway
Profitability
23
Cooperative
World 2030
Net Zero World
2030
Oil price (ZAR/USD)
