- Environmental NGO says fiscal plan misses opportunity to drive inclusive growth through just energy transition.
- Lack of clear allocations and targets for climate finance raises concerns over implementation.
- Continued fossil fuel support and limited climate adaptation funding risk deepening inequality.
South Africa’s Budget 2026 has drawn criticism from eco justice organisation The Green Connection, which argues that the fiscal plan fails to fast track the country’s just energy transition or address the structural drivers of inequality, unemployment and poverty.
In a statement following the budget presentation, the organisation said the government missed a critical opportunity to use the just energy transition as a catalyst for inclusive economic development, job creation and long term climate resilience.
While some short term relief measures are welcomed, the group believes the budget does not sufficiently align fiscal policy with the realities of climate change and the need for low carbon development.
“We have heard many of these commitments before,” says Neville van Rooy, outreach ambassador at The Green Connection. “South Africa needs structural reforms that break with old patterns and align fiscal policy with climate realities, support low carbon development and equip people with the skills needed for the future.”
According to van Rooy, a genuinely pro poor budget must focus on long term security by prioritising climate resilience, accessible clean energy and the creation of sustainable livelihoods at scale.
Concerns also centre on the lack of clarity around funding for the just energy transition. Although South Africa has secured significant international climate finance, Budget 2026 provides limited detail on allocations, timelines or implementation mechanisms.
The organisation warns that without ring fenced funding, measurable targets and transparent oversight, the transition risks remaining largely rhetorical rather than transformative.
“Where are the investments in socially owned renewables, community based infrastructure and youth skills development at scale?” asks van Rooy. “A just transition must reduce inequality and create sustainable work rather than deepen dependence on extractive fossil fuel industries.”
The group also highlights the role of national energy planning frameworks such as the Integrated Resource Plan and the Integrated Energy Plan. While these are intended to guide energy policy decisions, The Green Connection argues that the current Integrated Resource Plan still places too much emphasis on fossil fuels, while the Integrated Energy Plan has yet to be implemented.
Fiscal support for fossil fuels remains another area of concern. Energy subsidies more than tripled between FY2017 and FY2020 to ZAR 172 billion, or about US$10.4 billion, with the largest share directed towards coal fired electricity, according to analysis by the International Institute for Sustainable Development.
Although South Africa’s carbon tax sends a signal to major emitters, the organisation argues that it is insufficient on its own. Large industrial polluters require credible just transition plans aligned with the country’s carbon budget, particularly as energy intensive sectors expand and data centre demand increases.
At the same time, climate impacts are already reshaping vulnerable communities across the country. The Green Connection notes that the ongoing energy crisis continues to affect poor and working class households, while funding for climate adaptation and disaster management remains unclear.
“For every dollar spent on climate adaptation, studies estimate a return of more than $10 in social and economic benefits within a decade,” says van Rooy. “These are high return investments that reduce future disaster costs and create jobs, yet they are not central to fiscal planning.”
Communities displaced by flooding in KwaZulu Natal are still waiting for permanent housing, while recurring droughts in the Eastern Cape are affecting access to clean water and undermining local food systems. Small scale farmers have already suffered losses estimated at ZAR 65 million.
Coastal communities are also under growing pressure as warming oceans, shifting fish stocks, industrial pollution and extreme weather events threaten livelihoods. However, the organisation says Budget 2026 makes no targeted provision for small scale fisheries support, coastal adaptation or marine ecosystem protection.
The Green Connection argues that a credible just transition must include the ocean economy by protecting marine biodiversity and securing the livelihoods of artisanal fishers, rather than focusing solely on large scale industrial energy projects.
Government’s emphasis on infrastructure led growth is welcomed in principle, particularly investments in rail and ports that could shift freight transport from road to rail and reduce emissions. However, the organisation cautions that governance reform, transparency and operational sustainability will be critical for these projects to succeed.
The carbon border adjustment mechanism being introduced by several trading partners also presents a potential risk for South Africa. If the country maintains a heavy reliance on coal and other fossil fuels, exporters could face higher taxes in markets implementing carbon border policies.
As a result, expanding coal export corridors could lock the country into carbon intensive growth pathways at a time when global markets are shifting towards low carbon production.
“With just four years until the 2030 emissions reduction deadline associated with the 1.5°C climate threshold, Budget 2026 represents a crucial opportunity to invest in energy solutions that meaningfully improve people’s lives,” says Lisa Makaula, advocacy lead at The Green Connection.
“Community owned renewable energy reduces energy poverty, strengthens local economies and enhances safety. These are the foundations of long term stability.”
The organisation concludes that if the budget is to be remembered as genuinely pro poor, it must move beyond short term relief and prioritise climate resilience, energy justice, municipal capacity and ocean protection while ensuring fiscal policy remains transparent, accountable and aligned with long term sustainability.
Author: Bryan Groenendaal
