Climate action as a strategic imperative |

Climate action as a strategic imperative

Resilience of the portfolio | Scenario updates

Sasol updates its global and South African scenarios annually to reflect changes in the external environment and to test the resilience of its strategy. The scenarios draw on external scenario sets, market intelligence, internal modelling and expert insights, providing a balanced but challenging view of possible futures. They support strategy development, risk identification, opportunity assessment and decision-making.

 

TEMPERATURE INCREASE: 2°C – 3°C

The Current Pathway reflects a world in which the energy transition continues, but at a measured and uneven pace. Global economic growth stabilises at around 3%, supported by a gradual normalisation of commodity cycles, although periodic volatility remains a persistent feature of markets. Policy ambition advances incrementally, and while technology adoption continues, it does not accelerate to its full potential due to affordability, infrastructure, and coordination constraints. Fossil fuels remain a significant part of the global energy mix for longer, with transition pressures building steadily rather than abruptly. Overall, this scenario represents a pragmatic continuation of current trends, characterised by ongoing uncertainty, episodic shocks, geopolitical tensions, and sustained adaptation spending as global warming progresses.

TEMPERATURE INCREASE >3°C

Higher tariffs, increased conflicts and tensions – result heightened uncertainty and a more fragmented global economy.

New geographic trade relationships raise security of supply concerns for energy, commodities and components, increasing the cost of minerals and metals key to the energy transition, further increasing affordability challenges.

Adaptation costs are significant, related to more frequent and extreme weather events.

TEMPERATURE INCREASE 1.5°C – 2°C

In the Cooperative World, strong multilateral cooperation underpins faster progress on both climate action and economic development. Governments align policy frameworks, trade barriers are reduced, and technology sharing accelerates innovation and deployment across regions. The energy transition advances more rapidly, supported by lower market volatility and clearer policy signals, enabling capital to flow into low-carbon solutions with greater confidence. Fossil fuel demand declines more quickly, while petrochemical demand comes under increasing pressure from higher recycling rates, circularity, and improved material efficiency. Overall, this scenario is defined by greater system efficiency, faster technology diffusion, and a more predictable operating environment—albeit with structural pressure on traditional hydrocarbon-based activities. Adaptation costs are moderated as the system transitions away from fossil-based feedstocks.

TEMPERATURE INCREASE ~1.5°C

The Net Zero World assumes a strong and coordinated global commitment to limiting warming to 1,5°C, supported by stringent policies, carbon pricing mechanisms, and penalties for emissions-intensive activities. Decarbonisation accelerates rapidly across all sectors, leading to a sharp decline in fossil fuel demand. Low-carbon technologies—including renewable power, green hydrogen, and circular business models—scale quickly as capital is redirected toward sustainable systems. While this scenario delivers the most decisive climate outcome and the lowest long-term adaptation costs, it is currently less probable given geopolitical and economic realities. Nevertheless, it remains a critical reference case for stress-testing strategies, investments, and resilience under conditions of rapid and potentially disruptive transition

Signposts to monitor activity

  • Global trade restrictions and tariffs; intra bloc trade versus cross-block trade
  • Frequency of Regulatory and policy changes including RED II, flexible allocation, carbon border tax design
  • Global and South African carbon regulation including carbon tax recycling and carbon budget
  • Macroeconomic drivers such as oil price, rand/dollar exchange rate, inflation, economic growth, product prices, feedstock price, upstream investment, ethane ethylene price spreads, South Africa GDP/capita
  • Electricity growth versus GDP growth and renewables energy spend versus grid spend
  • Sustainability strategy and associated costs of investment required
  • The pace of technology development
  • Financing and funding trends and requirements
  • Align transition pace with customer needs

Quantitative robustness testing of the strategy to FY30

Scenarios are used to test the robustness of our strategy, both qualitatively and quantitatively, to assist in identifying potential risks and opportunities as well as to improve overall strategic resilience. The result of the robustness testing assists in shaping the Sasol of the future strategy and in identifying possible risks to the strategy. Sasol is actively monitoring opportunities for further value creation into the future.

The testing process involves developing price assumptions for each product and feedstock under each scenario, including oil, refined products, natural gas, chemicals and US ethane. These price assumptions, together with the outcomes of the financial modelling, are reviewed and approved by the Sasol Group Assumptions Committee. Through Group Finance, a detailed financial modelling exercise is then undertaken to test financial robustness through to FY30, using Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) as the key metric. The modelling outcomes are subsequently signed off by the Assumptions Committee and used to inform decision-making.

For more information on the outcome of the quantitative robustness test, refer to page 44 of the 2026 Integrated Annual Report.

Qualitative robustness testing of the strategy to FY30

Here Sasol applies a grading system to assess different elements of the Future strategy to 2030 by convening a multi disciplinary team from across the business to evaluate the robustness of the strategy across a range of themes under each of the four scenarios. These themes include potential stakeholder responses including from shareholders, non-governmental organisations and government; the strategy’s dependence on policy and regulatory changes; fluctuations in demand for liquid fuels and chemicals; market and competitive dynamics affecting liquid fuels and chemicals; and the executability of the strategy, including considerations such as the operating model, partnerships, capabilities, skills availability and the financial framework.

Outcome of qualitative robustness test

Sasol is progressing the GHG Emission Reduction Roadmap towards a 30% reduction target by 2030 by adopting new sustainable energy and feedstock opportunities, improving energy efficiency and incubating and scaling new sustainable opportunities to grow new value chains. Many of these activities like renewable diesel, renewable energy and bio-based feedstocks, are housed in our Business Building. The effect of these new lower carbon opportunities will be felt across Sasol both in South Africa and internationally.

For more information on the outcome of the qualitative robustness test, refer to page 45 of the 2026 Integrated Annual Report.