Sasol Climate Change Report 2023 - Book - Page 45
INTRODUCTION
TRANSFORMING FOR RESILIENCE
GOVERNANCE
CLIMATE ADVOCACY AND POLICY
DATA AND ASSURANCE
OFFSETS
Our approach
Our decarbonisation approach does not rely on
utilising carbon offsets to meet our interim, 2030,
targets. However, both A/R and CDR offsets (see
below) are considered valuable tools with which
to achieve our targets and net zero ambition.
The global macro-environment is currently affecting
our ability to procure renewables according to
our roadmaps. To manage this challenge, we are
exploring opportunities to use high quality, wellvetted offsets as a fall-back approach to meet our
reduction milestones to maintain progress towards
our 2030 target.
Sasol’s carbon offset principles
Offsets can uplift communities and contribute positively to alleviating poverty, unemployment and
inequality. However, without solid governance, offset projects can have unintended negative consequences.
Sasol’s offsets are focused only on credible credits that are subject to a high degree of verification and
assurance.
The following principles are embedded in our approach:
offsets must be used according to Sasol’s mitigation hierarchy, prioritising on-site mitigation and only using offsets as a
last resort to meet reduction requirements;
offsets must be ‘real’ (supported by robust methodologies and independently verified), ‘additional’ (reductions would not
have occurred in the absence of the offset market) and ‘permanent’ (reductions are ongoing and will not be reversed in
the future);
offsets procured and developed must adhere to regulatory eligibility criteria; and
retired offsets must be transparently disclosed to avoid double counting of emissions.
Sasol’s carbon offsets principles are aligned with the Integrity Council for the Voluntary Carbon Market (ICVCM), Voluntary
Carbon Markets Integrity Initiative (VCMI) and UN Expert Group recommendations for non-state entities.
Sasol’s two offsets categories:
AVOIDANCE/REDUCTION (A/R) OFFSETS
keeping GHGs out of the atmosphere
CARBON DIOXIDE REMOVAL (CDR) OFFSETS
removing residual GHGs from the atmosphere
We use real, verifiable and permanent offsets to reduce our South
African carbon tax liability and, in the future, to address residual
emissions.
Carbon offsets 3 when properly designed and implemented 3 can play
an important enabling role in delivering our Future Sasol strategy,
addressing emissions that are either prohibitively expensive to reduce
or technologically challenging to abate, while at the same time
realising other environmental and social benefits. Offsets are only
used to supplement our existing emission-reduction activities and are
not intended to replace such activities.
We are developing a portfolio of verifiable, credible and high-quality
credits aligned with our carbon offsetting principles (see above right).
We prioritise credits from projects that realise additional social and
environmental benefits and are supportive of a just transition
while simultaneously meeting our compliance obligations
and future needs.
Credits have been proactively secured as a response to the proposed
extension of the first phase of the South African carbon tax regime.
We have strategically engaged with experienced brokers, project
developers and offsets rating agencies to secure cost-effective,
high-quality and independently assured carbon credits for the future.
This year, we secured over ~1,7 million credits from six local projects,
mitigating the release of over ~1,7 MtCO2e, avoiding more than
R44 million in carbon tax payments and realising additional
environmental and social benefits for communities in South Africa.
Since 2019, we have cumulatively reduced our carbon tax liability
by over R650 million.
For an explanation of the projects that contribute to our annual offsets
portfolio, see our previous Climate Change Reports and annual CDP
disclosures ( WWW available on our website, www.sasol.com).
We have contracted ~70% of our current demand to 2026, which will
realise additional carbon tax savings, and we are preparing the business
for the second phase of the South African carbon tax regime, which
increases our carbon offsets allowance from ~4 to ~6 million credits
per annum.
Secunda Operations, South Africa
SASOL CLIMATE CHANGE REPORT 2023
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