Sasol Climate Change Report 2023 - Book - Page 46
INTRODUCTION
TRANSFORMING FOR RESILIENCE
GOVERNANCE
CLIMATE ADVOCACY AND POLICY
DATA AND ASSURANCE
OFFSETS CONTINUED
Since 2019, our offsets strategy outlined
short-, medium- and long-term approaches
to mitigate constraints on the supply of
offsets and their increasing cost while
allowing Sasol to pivot as markets evolved.
The strategy served Sasol well, creating
optionality and substantial capacity in
over-the-counter markets to mitigate, in
particular, our South African carbon
tax liability.
In 2022, we began implementing a refined
offsets strategy and have prioritised
strategic partnerships to complement our
short-, medium- and long-term approaches.
In executing this strategy, Sasol has invested
in the development of key (mostly human)
resources.
OFFSETS STRATEGY //
Short term
with experienced developers in South
Africa and, potentially, the Southern
Africa Development Community region.
Our carbon offsets strategy differs by
region with South Africa being the focus
of much of our offset activities in the
short term (up to 2025) 3 driven primarily
by our offset requirement under the
Carbon Tax Act. The South African market
is already short on eligible credit supply
and as a result, we have to invest in
qualifying strategic projects.
Cost-effective project development or
upstream opportunities will be pursued,
while spot and long-term contractual
credits will continue to be purchased. This
will ensure that the company maximises
its carbon tax allowance opportunities.
Long term
In the short term, we aim to assess
potential product bundling opportunities,
prioritising industries with high
decarbonisation ambitions on the back of
rising consumer and regulatory demands.
These are likely to include energy
products, aviation fuels and chemicals.
We are working to understand the
implications of product bundling and the
requirements to make credible low-carbon
or carbon-neutral product claims.
We have assessed multiple pathways
to net zero. The choice of pathway will
depend on technology maturity and
affordability. However, the preferred
pathway for Sasol is to be fossil-fuel free,
underpinned by renewable hydrogen and
embedded CDR-type technologies such as
direct air capture (DAC), which requires no
offsets. In the worst-case scenario,
residual emissions of ~37 MtCO2e remain
by 2050. This will need to be neutralised
by CDR offsets to achieve the net zero
ambition and requires immediate action
to ensure a pipeline of affordable credits.
Medium term
In the medium term (2026 to 2032), we
envisage playing a more active role in
project development, in collaboration
Vertree partnership
In June 2023, a cooperation agreement
was signed between Sasol and Vertree
Partners Limited to support delivery of
Sasol9s environmental markets strategy
(see below).
Vertree is an integrated carbon solutions
provider that supports leading companies
and institutions to reach their climate
goals. Through its established partnerships
with leading project developers and
environmental market insights, Vertree
will provide guidance to Sasol on carbon
markets, product bundling and the
management of associated risks. It will
also provide access to a supply of
high-quality carbon credits and climate
investments.
Over the course of 2024, the Sasol and
Vertree teams will define the partnership
focusing, as a first priority, on product
bundling and parameters for quality
assurance.
Collaboration is key as our
global climate goals become
increasingly urgent. We
are committed to support
Sasol to accelerate its
decarbonisation and ensure
the delivery of credible
environmental and social
value through carbon-related
projects and investments.
Muireann Mageras // Vertree
Vertree partnership signing, Johannesburg, South Africa
L to R// Dr Storm Potts (Sasol Head of Global Climate Change and Policy), Shamini Harrington (Sasol Vice President
Climate Change), Muireann Mageras (Vertree Head of Environmental Strategy and Advisory), Dominique Strasdin
(Vertree Business Development Manager)
SASOL CLIMATE CHANGE REPORT 2023
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