Narend Singh, the Deputy Minister of Forestry, Fisheries and Environmental Affairs, addressed the Bridging compliance: CBAM, ESG and the South African Metals and Engineering Sector, on Tuesday, the 08th October 2024.
Speaking about progress, Singh said South Africa’s long-term Low Emissions Development Strategy (LEDS), communicated under Article 4.19, illustrates the country’s commitment to ultimately moving towards net zero carbon emissions by 2050, will require various interventions to reduce greenhouse gas emissions.
Singh said South Africa recognises the need for climate action to be centred on a Just Transition, meaning a transition to net-zero carbon emissions society that accommodates the needs of workers and communities, which may be negatively affected through the loss of jobs or activities as a result of a move to a lower carbon economy.
“The Nationally Determined Contributions (NDC) for South Africa have been informed by peak, plateau and decline in terms of carbon emissions reduction. The recent Bid Window of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), the work of the Just Energy Transition (JET), green hydrogen generation, are key steps in a positive direction.
Regarding pertinent issues of the Carbon Border Adjustment Mechanism (CBAM), and due credence to the United National Framework Convention on Climate Change (UNFCCC) Principle of Common but Differentiated Responsibilities and Respective Capabilities (CBDR-RC), must inform what can or cannot be achieved by Emerging Markets and Developing Countries (EMDCs).”
He also said there is concern that outside of multilateral processes, such as the UNFCCC, discussion and agreement of the CBAM policy design of using market principles to cut GHG emissions, will create a direct impact on developing countries’, such as South Africa, exacerbating inequality, poverty and unemployment.
“This we should take all measures to guard against.”
On the issues of Environmental, Social and Governance (ESG) sustainability reporting requirements by Business, point to responsible business conduct.
He said the JSE Listed Companies are familiar with King III and King IV Reporting.
“Last week, Deputy Minister Swarts, in her engagement with Private Sector, also emphasized the need for Private Sector to embrace and advance ESG Reporting, in transitioning their businesses from Business as usual (BAU) to low carbon, if Business is to remain relevant, especially on exports.”
The Department of Forestry, Fisheries and the Environment has been actively engaged in the decarbonization of the Steel Sector.
” As you are well aware, the Steel Sector, is one of the hard to abate sectors, and is highly energy intensive.”
The Department of Forestry, Fisheries and the Environment, in collaboration with the Department of Trade, Industry and Competition and in partnership with the Organization for Economic Cooperation and Development (OECD), has been working closely with Industry Association, the South African Iron and Steel Institute (SAISI), and industry partner, ArcelorMittal, together with other players, to determine what may be the low hanging fruit for a low carbon transition.
Singh said green hydrogen, as input energy, provides an option for the production of green steel.
“Sectoring scrap metal market as input material for the Steel Sector to lower the carbon footprint, would be another option. Refurbishment of existing technology and investment into new and energy efficient technologies are other options.
Downstream industries are also faced with competition on imports. Therefore, compliance and enforcement are important, and so is the provision of the necessary legislative measures.”