- Bloomberg reports that Simon Baloyi, Chief Executive Officer of Sasol, is seeking a new path to reach its emissions target after doubling down on coal to run its fuel and chemicals production.
- Sasol is one of the world’s biggest corporate air polluters.
- Sasol plans to boost the use of renewable energy to counter the growing dependence on coal, Baloyi said.
- Production and sales metrics for the six months ended 31 December 2024 reveal the annual volume outlook for Secunda Operations and Natref revised downward due to operational challenges. Read more
Simon Baloyi – Chief Executive Officer of Sasol. Image credit: Sasol
Sasol identifies itself as a coal-based company, which is “at the core of the South African economy” and needs to transition at a pace that works for the country, Baloyi said in an interview at Bloomberg’s Johannesburg office last week. Shutting operations to meet climate goals “for me does not make any logical sense at all,” he said.
Sasol also relies on gas power to energise its plants but supply from Mozambique is drying up and more recently, become vulnerable to political unrest in Mozambique.
Last month a group of opposition activists cut off gas supplies to Sasol after seizing their plant in Inhambane Province in south-east Mozambique. More than 90% of South Africa gas imports come from Mozambique.
Sasol has been operating in Mozambique since 2004 and operates the Pande and Temane onshore gas fields in Inhambane. It has a gas processing plant at Temane from which gas is transported via the 865 km Rompco pipeline to Sasol’s Secunda industrial complex in Mpumalanga province, South Africa. Sasol relies on the gas supply to fire its 140MW gas-to-power plant at its Sasolburg operations plus a 280MW plant at its Secunda operations. The gas imported from Mozambique is also distributed to local users.
Related news: South Africa’s massive Sasol petrochemical plant faces serious challenges
Baloyi has been criticised over ambiguous language about “realistic and achievable” goals and a “moving target of between 25-35% GHG emission reduction”, while the company’s latest reports contain many hedging phrases like “redefining the pathway to Future Sasol”, “optimising the Emission Reduction Roadmap to include value-creation opportunities” and adopting a “balanced and measured approach”.
When questioned about these statements, Sasol has offered vague explanations and promised more details at an as-yet-unscheduled 2025 Capital Markets Day. This pattern of communication is particularly concerning considering Sasol’s confident launch of its emission reduction strategy in 2021 where the company pledged to reduce its Green House Emissions (GHG) 30% by 2030 by substituting coal with more gas.
“That GHG strategy was predominantly based on lots of gas coming in, and where are we today? We know there’s no gas in Mozambique,” and Sasol’s existing wells are running down, Baloyi said, referring to greenhouse gas. Sasol remains committed to the 30% emissions reduction target, “but we can’t do it the way we thought we were going to do it,” he said. “If we need to double up on renewable energy from one gigawatt to two, we’ll do that.”
Related news: Sasol still “optimising the execution” of its emission reduction roadmap while emissions continue to rise
On green hydrogen Baloyi said that Sasol sees little benefit from being a first mover from using the technology. “Why do you want to be like a guinea pig of technology,” he said.
Referring the green hydrogen hub planned for Boegoe Baai where it seeks development partners, Baloyi said that their studies have found the area near the project could support as much as 200 GW of renewables if supporting infrastructure such as ports are built and then “you almost get green hydrogen for free”.
EU carbon tax looms large
The EU’s Carbon Border Adjustment Mechanism (CBAM), set to come into effect in 2026, will hurt companies exporting to the EU if they are not compliant. The CBAM is designed to address carbon leakage and support the EU’s ambitious climate goals.
The CBAM will impose import charges on products, such as steel, cement, and electricity, based on the CO₂ emissions embedded in their production. By levying these charges, the EU aims to level the playing field between domestic producers, who are subject to strict carbon regulations, and foreign producers, who may not face similar constraints.
Sectors most likely to be affected by the CBAM are those heavily reliant on EU exports such as the chemicals and manufacturing industries. These traditionally carbon-intensive sectors will face increased costs and compliance requirements under the CBAM.
Therefore, these industries, particularly the South African chemicals sector led by Sasol, which is a significant exporter to the EU, will need to adopt greener practices to mitigate these costs and maintain market access.
Author: Bryan Groenendaal
