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South Africa’s Carbon Offset Administration System (COAS) Goes Live

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The Regulations further provide an offset mechanism that may be utilised to develop carbon offsets projects to enable reduction in respect of carbon tax liability. GBA
  • Back in November 2019, the South African National Treasury gazetted regulations on Carbon Offsets under section 19 of the Carbon Tax Act, No 15 of 2019.
  • The Carbon Offsets regulations were deemed effective as of 1 June 2019.
  • The Department of Mineral Resources and Energy (DMRE), as the administrator of the Carbon Offset Administrator has activated the Carbon Offset Administration System (COAS) effective from 23 July 2020.
  • COAS will facilitate receipt and approval of project applications as well as the issuance of the offset retirement certificates as required by carbon tax payers to claim the carbon offset allowance under the Carbon Tax Act.
  • The payment of first carbon tax environmental levy account for the period 1 June – 31 Dec 2019 is due on 31st October 2020. Read more

Through the regulations, the South African Government wants to provide a flexibility mechanism that will enable industry to deliver least cost mitigation at a lower cost to what would be achieved in their own operations, and thereby lower their tax liability. Furthermore, they want to incentivise mitigation in economic sectors or in relation to activities that are not directly subject to the carbon tax or benefiting from other government incentives.

The Regulations further provide an offset mechanism that may be utilised to develop carbon offsets projects to enable reduction in respect of carbon tax liability. The Department of Mineral Resources and Energy (DMRE) as the administrator of the Carbon Offset Administrator hereby activates the Carbon Offset Administration System (COAS) to be live as of 23 July 2020.

To date, the DMRE in preparation for the discharging of its responsibilities as conferred by the Regulations has developed the Carbon Offsets Administration System, tested and ready for full implementation. In brief, the COAS will facilitate receipt and approval of project applications as well as the issuance of the offset retirement certificates as required by carbon tax payers to claim the carbon offset allowance under the Carbon Tax Act.

Author: Bryan Groenendaal

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