B: CLIMATE CHANGE

The energy transition currently underway presents both significant challenges and substantial opportunities to reshape the global energy mix. It is widely recognised that a future global economy will require nearly double the current level of energy to meet demand equitably, while simultaneously reducing emissions in line with the objectives of the Paris Agreement. Although the pathway to achieving this future remains uncertain and influenced by multiple variables, several common elements are evident across most transition scenarios. These include improved energy efficiency, increased deployment of renewable energy, greater use of lower-carbon energy sources, and the reduction of emissions from end-use sectors. Realising these pathways will depend on strengthened collaboration, adequate financing, and effective policy frameworks to enable and accelerate the transition.

A supportive policy environment is essential to allow markets to drive innovation, technology development, and large-scale deployment, as well as to enable the infrastructure required to transform the energy system in a cost-effective manner. This includes robust emissions reporting and verification systems, appropriate carbon pricing mechanisms, measures to prevent carbon leakage, and the judicious use of carbon offsets to support emissions reduction objectives.

It is evident that the global energy landscape in 2050 will be markedly different from today, characterised by a more diverse energy mix delivered in various forms to meet the needs of industry, heating, lighting, and mobility.

Position Statement: The Fuels Industry Association of South Africa:

• Recognises the scientific evidence that anthropogenic induced climate change represents a real and significant risk to South African society, the environment and the economy and effective actions are required to ensure that average global warming is kept well below 20 C above pre-industrial levels;


• Recognises and supports government efforts to address climate change and meet its emission targets as exemplified in its Nationally Determined Contribution while at the same time ensuring energy security, energy affordability and reduction in energy poverty levels;


• Support government efforts to provide for statutory reporting of emissions, emission reduction plans and mitigation actions in order to provide for better visibility of the country’s GHG trajectory;


• Strongly advocates that government policy decisions arising out of the foregoing, together with sound scientific and economic analysis properly informs appropriate actions taking into account South Africa’s developmental objectives;
• Strongly advocates that these polices need to include an appropriate price on carbon to provide a price signal to consumers and producers;


• Recognise that carbon offsets can play an immediate and invaluable role as a bridge to future decarbonisation and should be used to uplift communities and contribute positively towards the national imperatives of alleviating poverty, unemployment and inequality;


• Strongly supports government efforts to lobby for international funding, within the constraints of fiscal policy, to assist South Africa in its energy transition;


• Believe that petroleum products will form part of the energy transition of South Africa because of the developmental nature of the economy taking into account existing energy infrastructure; the structure, age and turnover of the vehicle population; and future changes related thereto;


• Advocates that South African refineries need to be appropriately incentivized to produce cleaner fuels to allow for the introduction of newer technologies that take advantage of cleaner fuels to reduce both noxious tail pipe emissions and fuel consumption which will reduce tail pipe GHG emissions and thus contribute to the fight against climate change as well as preserving the significant number of jobs employed in this sector of the economy;


• Advocates that climate change policy should not place South African refineries at a competitive disadvantage relative to its peers which inadvertently permit inappropriate carbon leakage through the imports of petroleum products from jurisdictions not subject to such policies;


• Strongly supports the drive of the Department of Mineral and Petroleum Resources to diversify the energy mix, which includes increasing the use of both liquefied petroleum gas (LPG), natural gas and liquefied natural gas (LNG) in the country as a means to reduce energy poverty, improve ambient air quality, reduce reliance on electricity for space heating and cooking and relieve the pressure on biomass as an energy source for domestic use. All of these actions will serve to improve the lives of people and contribute to the fight against climate change;


• Advocates for incentives to beneficiate waste materials within South Africa (rather than for export) for conversion to feedstock for Biofuel, Biomass to Fuel initiatives that can be employed by refineries to produce low carbon products


• Supports the development of standards for liquid fuel products derived from co-processing of fossil-fuels, sustainable carbon sources (e.g. biogenic sources, unavoidable CO2 point sources) and green hydrogen.


• The Fuels Industry Association of South Africa believes that all these efforts working in conjunction with one another will contribute to South Africa’s Just Transition to a low carbon economy.