Earlier this year South Africa took an important step towards meeting its carbon reduction commitments under the Paris Agreement, with the release of draft carbon budget regulations that will demand measurable action from the country’s large emitters.
Published for comment in early August 2025, the draft National Greenhouse Gas Carbon Budget and Mitigation Plan Regulations set the stage for companies to plan exactly how they will cut their carbon emissions – against real targets they will be legally obliged to meet. Philippa Burmeister, Partner and Principal Environmental Scientist at SRK Consulting South Africa, notes that the regulations are aimed at companies that emit over 300 000 tonnes a year of carbon dioxide equivalent.
“These identified companies will need to provide their greenhouse gas (GHG) emission inventories as a baseline, which will need to be rigorously verified,” Burmeister says. “From this basis, they will be required to draft time-bound plans to reduce their emissions – plans which will need to be submitted to the Department of Forestry, Fisheries and the Environment for review and approval.”
Potential risk
In its assessment of these plans and targets, the department is not bound to accept the proposals and can set its own benchmarks for each applicant. Burmeister notes that this could pose a significant risk to companies that may be required to meet more demanding targets for carbon reduction.
The regulations are aligned with South Africa’s commitments to reduce emissions, which it set out in its Nationally Determined Contributions (NDCs) under the Paris Agreement. In its updated NDCs submitted in 2021, South Africa stated its aims to achieve annual GHG emissions reductions of 398 to 510 mega-tonnes (Mt) of carbon dioxide equivalent in 2025, and 350 to 420 Mt in 2030. (In its latest NDCs government has set a new mitigation target for 2035 of between 320 and 380 Mt of carbon dioxide equivalent.)
“When compared to the GHG emissions generated by South Africa between 2000 and 2022, these commitments equate to a 0 to 22% reduction by 2025 and a reduction of 18 to 32% by 2030,” Burmeister says. “It is worth noting, though, that sector-specific reduction targets have not yet been issued and could require reductions above the country average for high emitters.”
Reporting on actions
While the carbon tax system is already in place and requires emitters to report GHG emissions for tax purposes, the latest regulations go beyond companies’ tax obligations. Companies that do not achieve the legally required reductions could face fines, jail time or both.
“Once a company is issued with a final carbon budget, it will have six months to report on the action it plans to take to meet the given targets,” Burmeister says. “The regulations will work on five-year cycles, during which a company is required to monitor and demonstrate its progress towards achieving the set targets.”
SRK Consulting SA Chairman Vis Reddy highlights that the regulations help give life to the Climate Change Act of 2024, by driving the country towards reducing carbon emissions in realistic ways.
Feedback on the draft regulations
“The country’s citizens – corporate and individual – need to appreciate that the regulatory process is advancing and that we take our global commitments seriously,” Reddy says. “It is also important that stakeholders engage with the draft regulations constructively and provide their feedback to flag any aspects that might undermine effective implementation.”
He notes that public comment is essential to create final regulations that can be reasonably applied and enforced. Good regulations will enhance certainty and clarity of purpose, allowing companies to plan ahead – as many will have to make considerable financial commitments to upgrade systems or improve infrastructure related to emissions.
“The regulations’ five-year horizon of initial expectations is not long, given the investments and technological advances that will need to be made by companies to improve their environmental performance,” he notes. “Understanding what your carbon budget will be is a key benchmark in this process, but companies really need to have built up some momentum on this issue by now – and should be ready to act decisively on their plans sooner rather than later.”
Burmeister says that most of those affected by the regulations would be aware of how to report emissions. However, there may be some companies that are still getting to grips with quantifying their emissions and may have significant challenges in identifying reduction opportunities.
“It is not clear yet how the budget determinations will be calculated and applied, and whether these will be on a case-by-case basis for each company – or whether certain minimum reduction requirements will be applied on each industry or sector,” she says.
Like the Minimum Emission Standards under the National Environmental Management: Air Quality Act, these regulations therefore require proactive involvement at this commenting phase – alongside effective planning and action to pre-empt risks to business.
For more information visit: www.srk.co.za