Sasol Climate Change Report 2023 - Book - Page 22
INTRODUCTION
TRANSFORMING FOR RESILIENCE
GOVERNANCE
CLIMATE ADVOCACY AND POLICY
DATA AND ASSURANCE
RESILIENCE OF OUR PORTFOLIO CONTINUED
Physical risk modelling
NET ZERO WORLD
COOPERATIVE WORLD
• The Net Zero World is a normative scenario that is built
backwards from a target outcome of reaching the global
temperature of ~1,5°C.
• Strong cooperation allows for more global climate change
mitigation. Activities are, however, not sufficient, with
temperature increase in a range of 1,5°C to 2°C.
• This scenario assumes that appropriate technologies will be in
place, policy and regulation will be aligned and constructive,
financial investments will be available at favourable rates to
develop new technologies, supply chains will expand at the
required rates and all consumer behaviour will be aligned and
focused on the end goal. It also assumes that all countries will
be completely aligned on and working towards the net zero
ambition. Moreover, this scenario assumes that the required
skills and re-skilling actions are available and sufficient
employment opportunities will be in place.
• There are rapid technology advances in solar, wind and
batteries, as well as technology transfer to developing
nations. This allows costs to fall over time, resulting in ongoing implementation.
• Strong penalties, legislation and policy are in place to direct the
desired behaviour and consumption-pattern changes.
• There are large investments in the energy transition, with
developed countries supporting developing countries
financially, technologically and with capacity building.
• There is a significant reduction in fossil-fuel demand and a
commensurate growth in green electricity through the rollout of solar and wind energy as well as storage capabilities.
Cost curves of renewable energy and green hydrogen have
dropped significantly on the back of technology advancements,
regulatory transformation and sourcing expansion.
• Global liquids demand for transport peaks in the 2020s, further
entrenched by a high penetration of electric, hybrid and fuel-cell
vehicles with the associated roll-out of charging infrastructure
globally. Fossil jet fuel demand is reduced by consumption and
operational efficiency improvements, behaviour change and
modal transport shifts, supported by strong penetration of SAF,
including Power-to-Liquids (PtL).
• Global natural gas demand peaks in the early 2020s with major
reductions in gas demand in the power sector. Despite this,
industry remains reliant on gas due to substitution difficulties.
• Demand for petrochemicals is dampened by strong recycling
and circular-economy options. Alternative feedstocks need to
be implemented to simultaneously fill the gap left by the lack
of fossil-based feedstocks and to not influence costs for the
consumer. New refineries, especially crude-to-chemical facilities,
replace older technologies to enable the better use of new
refining liquids balances.
• All countries invest extensively in mitigation efforts, resulting in
fewer climate change adaptation requirements.
• Energy efficiency gains, lifestyle changes, legislation,
policy and political commitments result in reduced energy
consumption.
• Increased reliance on electricity networks for energy
distribution is accompanied by significant investment in
grid infrastructure and interconnectivity between countries.
Electricity transmission networks and energy distribution
costs have reduced significantly as global cooperation is
accelerated.
• Many countries cooperate on technology development,
commercialisation, availability and accessibility. Funding is
also forthcoming to assist in reducing dependence on fossilbased energy and advancing the energy transition.
• Global coal consumption comes under increased pressure.
• Global liquids demand for transport peaks in the mid to late2020s, driven by increased penetration of new technology
vehicles, charging infrastructure, engine efficiency, modal
shifts and behaviour changes, where affordability is spurred
by technology sharing and subsidies. Oil-derived jet fuel
demand growth is flatter and starts to decline in the mid2030s due to changing behaviour, consumption efficiency,
operational improvements and penetration of SAF.
• Global natural gas demand peaks and plateaus in the mid2030s and is largely used as a peaking fuel in the power
sector, with efficiency improvements lowering demand.
• Demand increases for petrochemicals are dampened by
behaviour and lifestyle changes, recycling and circulareconomy developments. Strong cooperation among nations
is required to close the gap left by lower fossil-based
feedstocks due to declines in oil and liquids availability.
New feedstocks are required to meet demand and also
restructuring and renewal of the global refining industry,
while keeping prices under control.
• Many countries are investing extensively in mitigation
efforts; however some climate change adaptation efforts are
required, especially in developing countries.
SASOL CLIMATE CHANGE REPORT 2023
21
Two greenhouse gas (GHG) emission scenarios were modelled to understand
physical impacts on our operations: the Intergovernmental Panel on Climate
Change (IPCC’s) high emission scenarios (referred to as ‘Representative
Concentration Pathway (RCP)’ 8,5) and an intermediate emission scenario
(RCP 4,5). RCP 4,5 and 8,5 were chosen based on the wide range of changes in
GHG emissions. These pathways informed the development of downscaled
climate models developed by the Council for Scientific and Industrial
Research (CSIR), providing an 8km spatial resolution for Southern Africa and
50km for the United States. Our prioritised sites for understanding physical
weather impacts were the CPF (Mozambique), Secunda and Sasolburg (South
Africa) and Lake Charles (United States).
We supplemented and bias-corrected the modelling with site-specific historical
weather data. Our modelling simulations spanned 1960 to 2099, which
encompasses the time-frame for Future Sasol’s strategy. In general, the
modelling indicated that surface temperatures could increase by 1 – 4°C by
2050, with an increasing number of extreme hot days. Projected rainfall
patterns differ between the sites. For Sasol Energy in Mozambique, rainfall is
projected to increase while for sites in South Africa, no change in average rainfall
is projected but rather an increase in the intensity and frequency of extreme
rainfall events. For Sasol Chemicals in the United States, a similar rainfall
trend to South Africa is likely to be experienced. In Mozambique and the
United States, cyclones and hurricanes are expected to become more intense.
These results have informed the development of proactive climate
change responses. In addition, the downscaled modelling results have
been incorporated into our scenarios:
Net Zero
The weather-related impacts on Sasol’s people, communities and assets
are reduced, with fewer production losses and lower costs for adaptation
measures.
Cooperative World
Sasol’s people, communities and assets are exposed to some
physical impacts of climate change, requiring more investment
into adaptation measures.
Current Pathway
To build the resilience of our people, communities and assets, Sasol’s
investment costs in adaptation are higher than in the Cooperative World.
Hurricanes in the United States and flooding and heavy rainfall in South
Africa lead to some production downtime; however this is somewhat
cushioned by adaptation measures.
Fragmented World
Sasol’s adaptation investment needs to be significantly higher to build
the resilience of our people, communities and assets. Weather-related
impacts result in more production downtime.
Sasol Energy incorporates adaptation response measures such as
emergency preparedness, updating design specifications and tailored
maintenance schedules. These measures are more costly than those
required for our United States assets because of the age of Sasol
Energy’s assets. These assets were built without taking a rapidly
changing climate into account.