- On 5 April 2024, Minister of Forestry, Fisheries and the Environment, Barbara Creecy, granted Sasol’s air quality-related appeal, allowing it to measure emissions of sulphur dioxide (SO2) from the 17 coal-fired boilers at its Secunda operations in the way that Sasol prefers – although with certain conditions.
- The Minister’s upholding of Sasol’s appeal will result in emissions significantly above those permitted by the minimum emission standards (MES), which are already weaker than comparative standards around the world.
- The negative air quality and health impacts of these emissions are significant.
This decision means that the government has permitted a private company to set its own pollution limits, making a mockery of pollution laws and constitutional rights, and of any claim by the government to take public health seriously.
Sasol argues that its approach of measuring SO2 emissions based on their load, rather than their concentration, is an “integrated emission reduction solution”, addressing both toxic air pollutants and greenhouse gas (GHG) emissions. In its most recent reporting suite, Sasol also stated that, unless this SO2 appeal succeeded, it would not achieve its committed GHG emission reduction target (set in 2021) to reduce GHG emissions by 30% by 2030.
Just Share opposed Sasol’s appeal, as a result of which the Minister referred it to the National Environmental Consultative and Advisory (NECA) Forum for expert advice. This is the same panel appointed by the Minister in August 2022 to provide her with “practical optionsto resolve the issues arising in respect of non-compliance with the [MES]”. Two of the seven panel members were ex-Sasol employees. One resigned, and the other recused himself only after Just Share raised concerns that he is currently employed by the company that ran the Sasol SO2 MES process that was the subject of the appeal.
Both parties provided additional submissions and an appeal hearing was held. At this hearing, Just Share’s expert pointed out that compliance with the MES would reduce premature deaths and negative health impacts by 40-60%; whereas Sasol’s proposed limit – even by April 2030 – would only reduce these impacts by 5% compared to Sasol’s 2022-2023 emissions. Granting Sasol’s appeal will result in approximately 50-130% higher negative impacts than MES compliance.
It is concerning that the Minister’s appeal decision appears to rely only on the initial appeal and responding statement and does not refer to any of the additional submissions provided, nor to the appeal hearing itself. The Minister indicates that Sasol provided her with information regarding its investment in energy efficiency projects which she took into account in deciding that Sasol had demonstrated that it had implemented the legally-required “direct investments … towards compliance with the [SO2] new plant standards”. It is not clear when the Minister requested this additional information, nor when Sasol made it available. This information was not provided to Just Share.
The Minister has also not provided a copy of the NECA Forum’s recommendation to her on the Sasol appeal. To date, the Minister and the Department of Forestry, Fisheries and the Environment (DFFE) have also failed, despite several requests, to make public the reports of the “SO2 expert panel” established in September 2019 to “provide strategic and technical guidance towards effective management of SO2 emissions from old and existing plants”. This report is of enormous public importance, and it is inexplicable that the Minister refuses to provide it.
The appeal decision points out that Sasol did not provide adequate information to support its view that its “integrated solution” is the best practicable environmental option. The Minister also emphasises that Sasol has failed to comply with the MES despite having many years to do so. She states that she does not condone Sasol’s continued operation in terms of the alternative load-based limit, and that the additional leniency should be temporary in nature: Sasol should comply with the MES as soon as is reasonably possible.
In this regard, the Minister notes that the NECA Forum expressed doubts as to Sasol’s ability to achieve the claimed benefits in the timeframes given, and recommended that a condition of this further indulgence to Sasol be that it “timeously implements its integrated solution to achieve the emission reduction outcomes that correspond with the MES”.
Sasol one of a handful of private companies responsible for majority of global emissions since 2016
Also last week, the Carbon Majors project launched a report finding that just 57 companies are directly responsible for 80% of all GHG emissions between 2016 – just after the Parties to the Paris Agreement pledged to limit global warming to 1.5°C above pre-industrial levels – and 2022. Sasol is number 47 on the list.
The Carbon Majors database includes 122 of the world’s biggest historical climate polluters – oil, gas, coal, and cement producers – and is compiled by world-renowned researchers. In this latest update, they found that most of these fossil fuel mega-producers have scaled up their production in the seven years since the Paris Agreement was adopted in 2016, compared to the seven years leading up to it.
Richard Heede, who established the Carbon Majors dataset in 2013 and is director of the Climate Accountability Institute, said that “It is morally reprehensible for companies to continue expanding exploration and production of carbon fuels in the face of knowledge now for decades that their products are harmful.”
Investors pulling out
Sasol’s inclusion in this inauspicious list should be of huge concern to its shareholders, including those participating in the “Climate Action 100+ initiative”, whose policies of “engagement” with the company have collectively failed to result in emission reductions.
After a long history of failing to meet environmental and climate targets, Sasol’s current “decarbonisation pathway” is vague, economically unfeasible and already facing multiple challenges and set-backs.
Some of Sasol’s most prominent shareholders have proclaimed, confidently and for some time now, that engagement is the most effective way to drive Sasol to reduce GHG emissions. However, Sasol’s inclusion in the top 50 carbon majors in the world is clear evidence that their approach is woefully insufficient.
Old Mutual Investment Group and Ninety One both voted against Sasol’s “say on climate” resolution at its AGM in January this year (the resolution asked shareholders to endorse Sasol’s climate plans), as per their pre-declarations to do so. This is the most significant step taken by Sasol shareholders to pressure the company to reduce emissions, but it is a non-binding vote and therefore of questionable long-term impact.
Coronation Fund Managers, also one of Sasol’s biggest shareholders, refused to answer Just Share’s questions at its 2024 AGM about its strategy for escalating its engagement approach with Sasol. This question was asked in light of Coronation identifying, as one of its key risks, that its preference for engagement with investee companies over disinvestment will be “misunderstood”. Clearly, as Just Share pointed out at the AGM, the far bigger risk – and one which has already materialised – is that this engagement strategy fails to contribute to real-world emission reductions.
Despite this, the Sasol share price is up 12,67% in the last five days:
- Market Summary > Sasol Ord Shs
- 16,508.00 ZAC+1,857.00 past 5 days
Addendum: Conditions of the Minister’s SO2 appeal decision
- Sasol was granted the requested load-based SO2 limit of 503 t/d (tons per day) from 1 April 2025 to 31 March 2030 subject to the following conditions:
- Sasol must also be subject to a daily concentration-based SO2 limit. Sasol is required to motivate its suggested daily concentration limit within 10 days of 5 April, and Just Share and the National Air Quality Officer (NAQO) then have an opportunity to provide input. The NECA Forum will then consider and advise on this issue, whereafter the Minister will decide on the appropriate concentration-based limit.
- If Sasol’s emissions of particulate matter (PM) and oxides of nitrogen (NOx) do not comply with the relevant MES by 31 March 2025, the alternative SO2 limits will be withdrawn.
- Sasol must “continue to implement its integrated solution and must achieve the reductions in emissions of all pollutants as undertaken in its application and appeal”.
- The NAQO must monitor and evaluate Sasol’s compliance with the alternative load-based limit.
- Sasol must send stack monitoring data at a 10-minute resolution to the relevant licensing authority weekly.
- Sasol must send a monthly report to the NAQO analysing the data and assessing compliance with the standards. Sasol must also make this report publicly available on its website.
- If there are any exceedances of the standards, Sasol is required to conduct a full atmospheric dispersion assessment to determine likely health incidents.
Author: Robyn Hugo, Director: Climate Change Engagement at shareholder activism organisation, Just Share.
