Sasol Climate Change Report 2023 - Book - Page 13
INTRODUCTION
TRANSFORMING FOR RESILIENCE
GOVERNANCE
CLIMATE ADVOCACY AND POLICY
DATA AND ASSURANCE
OUR COMMITMENT TO CLIMATE ACTION
Our climate change position is that we:
support the Paris Agreement and contribute to SDG 13;
accept the mainstream climate science assessed by the IPCC for net zero
carbon dioxide emissions to be reached by 2050;
acknowledge that business has a role to play in managing the risks of climate
change, as well as realising opportunities in the transition to unlock societal value;
recognise the importance of enabling a just and equitable transition that
is appropriately paced and timed for the context within which we
operate; and
recognise the importance of adaptation and resilience in a changing climate.
In line with this position, we are on a path to progressively reduce
our emissions and improve performance towards a net zero ambition by 20501.
Applying a science-based approach
The Science Based Targets initiative (SBTi)2 has
become a widely accepted standard against
which corporate GHG targets are assessed.
However, our relatively unique business does
not fall within the methodologies currently
available in the SBTi ‘toolkit’.
For the Oil and Gas and Chemicals sectors,
methodologies have yet to be finalised and previous
Oil and Gas sector assessments have been paused3.
The nature of Sasol’s business model, built on the
FT process and not a conventional oil refinery, adds
a further layer of complexity to using SBTi
methodologies. As is the case for certain other
companies for which a sectoral SBTi approach is not
available, an SBTi-based independent assessment of
our alignment with the Paris Agreement is not
currently possible. Should appropriate SBTi sector
methodologies become available, Sasol would be
in a position to assess their applicability.
In the absence of sector-specific methodologies, the
SBTi has recommended, in its latest Net Zero standard,
the use of the absolute contraction methodology
from the IEA for certain sectors, which Sasol has
applied. We took into account several factors in
setting our target, including climate science,
mitigation availability and timing, cost, just transition
imperatives and other environmental benefits.
Top-down modelling was used to determine ambition
levels for input into bottom-up techno-economic
analyses. For the top-down analysis, we considered
the absolute contraction method using the IEA’s flat
rate of 2,5% reduction per year for 2°C alignment,
supported by an evaluation of our reduction
contribution for South Africa to meet its NDC.
The bottom-up analysis focused on mitigation
potential – plotted as marginal abatement cost
curves (MACCs). The collective interventions resulted
in an approximate 25% reduction potential that was
stretched to 30% to build in the need for greater
ambition.
Through these analyses, we confirmed our 2030
30% reduction target to be a well-below 2°C-aligned
target. Sasol continues to seek external independent
verification of our target alignment. As such, we have
been engaging with SBTi and the Transition Pathways
Initiative (TPI), and more recently we began exploring
the opportunity of utilising the British Standards
Institution PAS2060 standard4, as a mechanism to
validate our pathway to a net zero ambition by 2050.
For Sasol to be fully 1,5°C-aligned, an approximate
43% reduction would be required by 2030; however,
this could only be achieved by turning down
significant parts of our operations as mitigation is
not available, too costly or not sufficiently mature for
our business. Such a reduction would not be possible
without severe consequences for the business,
economy, communities and employment.
Sasol contributes ~5% to South Africa’s total gross
domestic product (GDP)5 with multiple value-chain
linkages across the economy – including enabling
employment of more than 450 000 jobs (direct,
indirect and induced). Consequently, a responsible
well-below 2°C-aligned 30% GHG reduction target
was adopted as the only feasible and mutually
beneficial pathway that is still science based.
We also considered South Africa’s latest NDC
expectations. The NDC aims for national GHG
emissions to be in a range of 420 – 350 MtCO2e
by 2030, with the lower end of 350 MtCO2e being
close to 1,5°C-aligned6. Given the significance of our
operations, contributing ~12% to the national GHG
inventory, a reduction of ~27% would be required for
us to support the country's efforts to meet the lower
end of the range. This approach affirmed that our
target remains well below 2°C-aligned and
more ambitious than the requirement.
Like all other countries and corporates, at this
juncture, Sasol is unable to chart with a high degree
of confidence a defined, narrow-bound, emissionreduction roadmap to 2050. We have identified
critical technologies that we believe today hold
significant potential to reduce emissions for our
operations, but we are unable to provide plausible
timelines and quantums of emission reductions
beyond 2030.
Principles of the Paris Agreement
and our climate-change management
approach
The Paris Agreement acknowledges that
different sectors and actors will need to
move at different speeds because of their
unique constraints and opportunities.
The Agreement further recognises that actors in
developing countries may require greater flexibility
in their journeys towards net zero, balancing the
need to increase access to energy with the
imperative of reducing emissions. The Race to Zero7
campaign recognises regional and sectoral disparities
and expects non-state actors to responsibly account
for such factors. In the context of developing
countries that are undergoing a just transition, this
is an absolute imperative.
Our 2050 net zero ambition supports the 1,5°C
temperature goal and the latest climate science,
with our 2030 targets being well below 2°C-aligned.
To 2030, Sasol has clearly defined emissionreduction roadmaps, including explicit mitigation
levers to reduce emissions in a stepwise fashion (see
our emission-reduction roadmaps, pages 4 – 5). We
are not in a position to follow a smooth year-on-year
emission-reduction trajectory as is done with most
climate models because our operations are highly
integrated with long lead times needed to integrate
capital-intensive emission-reduction projects.
SASOL CLIMATE CHANGE REPORT 2023
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1. Our net zero ambition incorporates the latest available science and
findings from the IPCC 1,5°C Special Report.
2. The SBTi is a partnership between CDP, the UN Global Compact, World
Resources Institute (WRI) and the World Wide Fund for Nature (WWF).
The SBTi’s call to action is one of the We Mean Business Coalition
commitments. https://sciencebasedtargets.org/about-us
3. https://sciencebasedtargets.org/sectors/oil-and-gas#companycommitments-removed-from-the-sb-ti-website-under-the-policy-update
4. https://www.bsigroup.com/en-GB/pas-2060-carbon-neutrality/
5. Based on 2021 data.
6. https://climateactiontracker.org/blog/south-africas-presidentialclimate-commission-recommends-stronger-mitigation-target-rangefor-updated-ndc-close-to-15c-compatible/
7. https://racetozero.unfccc.int/wp-content/uploads/2021/04/Race-toZero-EPRG-Criteria-Interpretation-Guide.pdf