Sasol welcomes recent policy announcements that support South Africa’s energy transition and potential impact economic growth, as well as related socio-economic developments.

The European Union (EU) and the South African government have agreed to launch negotiations in creating a ‘Clean Trade and Investment Partnership’ to advance South Africa’s transition to a lower-carbon economy. It will include supporting Sasol in continuing the development of sustainable aviation fuel, with its Secunda Operations as a focus, and the EU as an export market. This recognises the significant potential of Sasol’s South African assets to transform and provide sustainable energy and chemicals products globally.

In this regard, the declaration explicitly recognises the urgency of the task at hand and states: “This partnership must deliver short and long term solutions without delay to enable Sasol to export sustainable fuel, especially aviation fuel to the EU, including addressing compliance and regulatory issues. The EU commits to also support the long-term decarbonisation of Sasol, in particular in Secunda, thus contributing to facilitating a Just Energy Transition. “

Sasol is encouraged by the focus on driving economic growth through lower-carbon industrial policy reflected in the 2025 Budget Review published by National Treasury on Wednesday, 12 March 2025 which indicates a promising policy direction on carbon tax that will enable South Africa’s broader energy transition.

While the appropriate parliamentary processes will unfold toward adopting the 2025 Budget, these changes to the carbon tax framework reflect a positive policy signal.. The following specific provisions indicate a very promising policy direction:

• The retention of the basic tax-free allowance at 60% until at least 2030 (as opposed to the 10% step down of this allowance from 2026 followed by further reductions annually thereafter as contained in the Phase 2 Carbon Tax discussion Paper)
• The adoption of a higher offset allowance
• Energy efficiency incentives being extended through the 12L rebate through to 2030.

The extension of the basic tax-free allowance at current levels for hard to abate sectors creates space to make transition investments, supported by an extended allowance for energy efficiency, while the expansion of the credit for carbon offsets is an important signal to develop the market for these projects in South Africa.

These, along with other policy measures, must incentivise and enable large investments into South Africa’s energy transition efforts to support energy security, economic growth and employment.

“While we progress our strategic ambitions, I am heartened by these recent developments in the policy landscape by the South African government and the EU. It is a reflection of the importance of the ties between both regions. These mark a significant step in securing South Africa’s sustainable, low-carbon energy future with Sasol as a cornerstone to this ambition, while enabling the country’s industrial competitiveness. With our Secunda Operations as a key asset, the transition must happen at a pace that is in line with market demand and technical feasibility,” said Simon Baloyi, President and CEO of Sasol.