Sasol Limited Climate Change Report 2021 - Book - Page 10
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A NET ZERO AMBITION
Future Sasol: A sustainable agenda (CONTINUED)
Support of the Paris Agreement
Reducing our Scope 3 emissions
Scope 3 emissions are other indirect emissions that occur within a company’s value chain and outside of
owned assets. This precludes direct control and reduction management over these emissions. By-andlarge, a collaborative approach is required across the value chain to ensure reductions occur with suppliers
and customers. In other words, Sasol’s scope 3 emissions are our suppliers' and customers' scope 1 and 2
emissions.
Internationally recognised modelling approaches were used to inform a
top-down view of expected reductions:
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Fair Share: aligned with the Paris Agreement, Article 4.1. and is a science-based
approach that assumes countries will act collectively for the common goal but tempered
by national circumstances (ie developed countries will decarbonise at a faster rate to
allow carbon space for developing countries to grow and transition). This was a useful
tool to understand national target setting into the future; and
Generally, scope 3 emissions are larger than a company’s scope 1 and 2 emissions. However, this is not the
case for us. We own and operate a significant portion of our value chain, most notably the majority of our
feedstocks, utilities and to some degree our distribution networks. In addition, our operating assets in South
Africa are particularly energy intensive because of the use of coal, resulting in a higher emissions profile.
Nonetheless, scope 3 emission reductions are still key to Sasol's climate change management approach for
our most relevant emissions. Our scope 3 targets aim for:
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Other science-based: agnostic to national
circumstances and targets are aligned with the
science of climate change (IPCC 1,5 degree report).
Assumes all countries and companies have equal
responsibility and capability to decarbonise.
• an absolute 20% reduction in Category 11: Use of Sold Energy Products by 2030, off a 2019 baseline; and
• Net Zero by 2050 for these same emissions.
Other science-based approaches, such as absolute contraction techniques were used. Varying rates of reductions were applied to assess
expected reductions. Sectoral decarbonisation methodologies from the SBTi for both the Chemical’s and Oil and Gas sectors were not
available for use. In addition, two Fair Share models were assessed, Climate Action Tracker and Climate Equity Reference Calculator. These
models provided national indicative trajectories based on factors, such as responsibility for historical emissions, economic development, per
capita emissions, financial, technological and other capacity to reduce emissions. This work was supplemented by taking additional views on
country NDC expectations which aided in benchmarking, given the significance of Sasol South Africa's emissions.
Our bottom-up analysis focused on mitigation potential (plotted as marginal abatement cost curves (MACC)). The MACC highlighted
abatement size, cost and associated implementation time frames. We aimed to understand how reductions could be achieved, together with
phasing in of technologies to realise net zero. These approaches informed our roadmaps. Work on our Chemicals 2050 roadmap is underway
and will be communicated in due course.
In this way, we determined the gap between science-based target reductions, mitigation potential and technology availability. Our targets
therefore account for the availability and maturity of mitigation measures, reducing emissions in line with expectations and accelerating
action to achieve more ambitious reductions by 2030 and net zero by 2050.
Sasol's scope 3 target is set from a 2019 baseline and not 2017 as is the case for our scope 1 and 2
emissions. 2019 represents the most complete and accurate year post our accounting improvement process.
Our baseline year includes emissions associated with export coal, gas, liquid fuels and oil energy products.
In addition to the GHG Protocol – Corporate Value Chain (Scope 3) Accounting and Reporting Standard, we
used the 2020 latest guidance provided by the SBTi for scope 3 target setting. Key principles that helped
shape our approach to manage our scope 3 emissions are:
• Scope 3 screening – company’s must complete a scope 3 screening for all relevant categories to
determine their significance (materiality);
• Requirement to have a scope 3 target – (1) if emissions are greater than or equal to 40% of total
emissions a target should be set, or (2) if fossil fuel products are being placed in the market, a target
should be set for Category 11, irrespective of the percentage contribution to the total;
• Boundary – companies must set one or more emission reduction targets and/or supplier or customer
engagement targets that collectively cover at least 2/3 of total scope 3 emissions. Targets need not be set
on all scope 3 categories;
• Timeframe – targets must cover a minimum of five years and companies are encouraged to develop plans
for targets up to 2050; and
• Type of target – intensity or absolute reduction targets, focusing on meaningful reductions.
Our scope 3 emissions account for ~39% (average over the last three years) of our total scope 1, 2 and 3
emissions. Sasol’s most significant scope 3 emissions category is associated with customers' combustion of
our sold energy products (ie Category 11: use of sold products); this is also the most mature category from
an accounting perspective. In total this category accounts for ~80% of total scope 3 emissions and therefore
represents more than 2/3 of our profile. We are focusing as a start on reducing Category 11 emissions to
have the most impact. We are in the process of building a comparable and accurate baseline for our chemicals
products (Category 12) and will be reporting on these emissions in the coming year, with a view to assessing
whether a target should be set.
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Sasol Climate Change Report 2021