Sasol Climate Change Report 2023 - Book - Page 18
INTRODUCTION
TRANSFORMING FOR RESILIENCE
GOVERNANCE
CLIMATE ADVOCACY AND POLICY
DATA AND ASSURANCE
RISKS AND OPPORTUNITIES CONTINUED
Asset vulnerability
Extreme weather events have already had damaging
impacts on Sasol's people, fenceline communities
and infrastructure including pipelines and storage
facilities, one example being the 2022 KwaZulu-Natal
floods. Enhanced monitoring and early warning
systems for extreme weather events are in place on
our operational sites. Sasol also collaborates with
industry peers to share best practices to foster
collective approaches where possible with a view
to building and enhancing resilience. One example
of this is the ‘buddy system’ implemented by our
operations at the Lake Charles site where we share
emergency resources with other local businesses.
PROGRESSING OUR RISK MANAGEMENT EFFORTS
Climate change mitigation and adaptation pressures present both risks and opportunities for our business. Although net zero and the need
to achieve this goal are achieving momentum, considerable uncertainty remains regarding the availability and maturity of technology and
feedstocks to reduce emissions, as well as the sequencing and timing of their implementation. This is the reality that we are dealing with,
particularly for the post-2030 period.
Given these uncertainties, it is unlikely that our decarbonisation and transformation to a Future Sasol will follow a linear path. Managing complex short-term
risks will continuously be balanced with our assessment of long-term risks. The Future Sasol strategy creates three interrelated, but distinct phases linked to
the three-pillar emission-reduction framework (as shown below). These three phases have risks that we know of today that are all being considered.
RISKS ASSOCIATED WITH OUR POTENTIAL TRANSITION PATHWAY TO A FOSSIL-FUEL-FREE VISION
Supply-chain vulnerability
Climate change can undermine our ability to receive
inputs and feedstock, deliver products and execute
mitigation projects such as the delivery of solar panels
needed for renewable projects. On an ongoing basis,
we assess the vulnerability of our supply chains with
contingency plans to manage potential disruptions,
to the extent possible.
Water availability
Water scarcity and changes in water availability
patterns are exacerbated by the impacts of climate
change. Sasol is dependent on water for its operations
and practises water sustainability. Reduced water
availability or poor water quality can seriously disrupt
or halt operations, increase costs and impact
production. To adapt, Sasol has already implemented
closed loop recycling at our Secunda plant and has
expert in-house teams to help implement water
conservation measures and advise on, and implement,
water management strategies in our operations and
host municipalities’ catchment areas.
REDUCE
2024 – 2025
SHIFT
2030
2035
Constraints on electricity grid Infrastructure and renewable energy supply chains
Integrated emission-reduction roadmap contingent on Secunda being regulated on an alternative load-based boiler
sulphur dioxide limit
2040
Sufficient sustainable feedstock
(green hydrogen, biomass, DAC)
availability to maintain desired
production output and stability
2050
Demand for sustainable products
does not grow to our
expectations
Secunda boiler sulphur dioxide load-based limit is granted with onerous conditions
Ability to deliver on Sasol 2.0 savings
targets to ensure cash flow resilience
that will enable Future Sasol
Non-availability of incentives to
improve the affordability of
sustainable products
Ability to safely transport hydrogen
(from production areas to
decentralised demand areas)
Cost of DAC does not reduce according to expectations
Ability to access markets that can afford to pay for green hydrogen products
for the long term
Ability to access affordable
sustainable carbon feedstocks
Rate at which supporting infrastructure is developed relative to green fuel
production
Green hydrogen economy's ability to absorb jobs
Ability to deliver projects at scale and within the right economics to support
the Sasol ecoFT strategy
Inability to introduce sustainable feedstocks due to dependency on the technology cost reducing (learning curves) eg, green hydrogen, biomass, DAC
Health and safety risks
Climate change is affecting the health and safety of
our employees, service providers and communities.
Extreme heat, floods and even changing disease
patterns pose risks to human health. Sasol, through
its Occupational Health and Safety and other teams,
assesses and manages these risks by implementing
appropriate health and safety measures, providing
training and education, and adapting work practices
to ensure the well-being of the workforce. We also
support surrounding communities as we did in
Mozambique and KwaZulu-Natal during the recent
extreme weather.
TRANSFORM
Uncertainty about market-acceptable
price premium for renewable fuels
Potential technology disruption
making our product pricing
uncompetitive
Affordability and acceptability of incremental gas feedstock
Recognition of the use of industrial fossil carbon dioxide post 2040 as a
sustainable carbon source, impacting business sustainability
Changing regulatory landscape (incentives for decarbonisation and increasing carbon tax)
Ability to source low-cost funding to
improve the business case
Feedstock competition for
sustainable chemicals and fuels
production
Ability to attract suitable partners to share risk
SASOL CLIMATE CHANGE REPORT 2023
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