MechChem Africa talks to Eckart Zollner, head of Business Development at Economic Development Solutions (EDS), about the urgent need for action from government, industry, private enterprise and individual South African citizens to better monitor, manage and reduce carbon emissions.
EDS is a bespoke consulting firm focusing on Environmental, Social and Governance (ESG) compliance, primarily in the large scale infrastructure development and mining sectors, begins Eckart Zollner, head of Business Development at Economic Development Solutions (EDS). “We help our customers to meet their compliance obligations and carbon tax reduction targets, to mitigate against risk and to promote diversification and sustainability,” he says.
On the emissions compliance side, clients began seeking assistance from EDS after the Carbon Tax was legislated in 2019. “We have since developed a suite of unique online software systems to make carbon emissions monitoring, management and reporting easier. At that time there was nothing really geared towards the South African Carbon Tax, so we developed our own tools for corporate carbon tax management, to help companies to accurately and reliably monitor, record and manage their carbon emissions for tax purposes,” he continues.
“The Carbon Tax thresholds are still quite high, however, so only really large industrial companies are currently paying. And there are a number of allowances that companies can use to counter any tax that becomes payable. The tax net captures very few companies, with almost all medium sized enterprises being completely unaffected. So as a tool for driving reduced emissions, the Carbon Tax is far too slow and ineffective,” Zollner suggests.
Citing other legislation issues, he says South African diesel fuel standards in South Africa are still well below Euro VI standards, which means that every diesel-engine vehicle in use produces higher carbon emissions than those allowed through exhaust pipes in Europe. “South Africa is still not internationally compliant, and diesel engines are used in private and commercial generators, trucks and heavy industrial diesel plant equipment. So we are all emitting much more than we should,” he says.
“We in South Africa are facing having to transform from a traditional coal-based economy, which is far from simple. In the coal belt areas where coal mining and power generation takes place, urbanisation has taken place with housing settlements, economic hubs and more and more people migrating to these areas to seek employment. We know we need to change our workplaces and industries for the cleaner economy, but that's not something that happens overnight. Coal is the life-blood of these communities, so coming off from the 80% coal dependency and migrating towards a greener economy, while urgent, will have to be done gradually,” Zollner argues.
The transformation process started with the Renewable Energy Independent Power Producers Procurement Programme (REIPPPP) over 11 years ago. “We started quite rapidly, but somewhere along the line momentum was lost, which has led to even worse load shedding and electricity shortages. Fortunately we are engaging with this sector again; however, due to the unpredictability of Government regarding renewable energy, the impact of these new projects will take at least 24 to 36 months to be realised.
“At the same time, though, we are hearing conflicting messaging from government, with some supporting decarbonisation, while other highly ranked officials are asking whether we should use newer technologies to extend the life of coal-fired power plants. This confuses the industry. We need a clear, single message and a well-developed long term plan about how we are going to reduce emissions and meet the national contributions (NDCs) we have committed to,” says Zollner.
“We have to start setting ourselves targets, defining how we can reach those targets and then measuring ourselves so that, in the long term, we can drive emissions down on a step-by-step basis. This is not what we are getting from the Carbon Tax, which is an annual e-filing process, so its forgotten for 11 months of the year and then someone has to quickly fudge something. So the concept of measuring, managing and reducing emissions just doesn’t happen.
Our software system can assist with this management, thereby making it easier for companies to comply,” he points out.
South Africa is also now facing the threat of the European-imposed carbon border taxes on exports. The Europeans are demanding very low product emission factors from anything coming into their markets. Because some of our industries, such as the vehicle manufacturing sector, are dependent on exports into Europe, these regulations, could seriously impair our global competitiveness, which would be a massive disadvantage for South African manufactured products.
Carbon offset projects
A key way of helping intensive users of carbon-based energy is through carbon offset projects, Zollner suggests. “There have been serious delays in the registration and approval of carbon offset projects in recent years, along with a shortage of projects that companies could invest in. But we are now seeing South African registrations on local databases that have been globally accredited.
“We are also seeing many more projects being accredited for companies to invest in, particularly in the agricultural sector. There are now several agricultural project in the Western Cape that have come on stream, and these are now being registered on South African databases and managed and monitored locally, which significantly reduces delays,” he notes.
Because carbon emissions have to be mitigated in the same country they were generated, it is essential for South African companies to be able to invest in local carbon-offset projects. This creates additional financial opportunities for those setting up carbon-offset projects, improving their emissions performance by adopting cleaner production methods or technologies.
By investing in these carbon-offset projects, steel and cement producers, brick manufacturers and petrochemical processors can receive carbon credits that can be used to reduce emissions claims for compliance and Carbon Tax purposes. Also, though, an investment in an accredited regularly verified project also improves the company’s broader ESG standing. Zollner cites an example in the Western Cape, where AgriCarbon, South Africa’s first internationally recognised carbon programme is paying farmers for the carbon credits they generate from sustainable land management practices.Emissions reductions are achieved using rotational grazing, cover cropping, reduced tillage and other naturally sustainable practices that improve soil quality and reduce input costs. They also increase organic carbon in the soil and reduce greenhouse gas emissions, which, when verified and accredited, translate into carbon credits.
Dairy farms, in particular, release methane, which is a greenhouse gas with a high carbon equivalent, and use large quantities of industrially produced nitrogen-based fertiliser, which has a carbon equivalent of 5.6 kg CO2 per kg applied. The owner of one of the 40 South African farms in the pilot AgriCarbon scheme reports that has more than halved his nitrogen-fertiliser use per hectare since 2018.
Green energy trading
Another change that is coming relates to legislation around how energy can be bought and sold. “We are starting to see more free market based energy trading, so companies can now choose to reduce their indirect emissions contributions by buying from renewable generators. Legislation is in place to enable renewable energy plants to sell power directly to industrial off takers instead of selling all of their power to Eskom. A commercial facility with its own rooftop PV plant can sell its excess power back into the grid or to another user,” Zollner explains.
“An open marketplace is emerging where any power producer can, directly or through a licensed distribution company, sell green power to the highest bidder,” he adds.
The optimisation and reduction of energy demand has been a key focus for reducing emissions, but reductions are also possible through the use of alternate fuel sources such as biomass products. Any initiative however needs to be monitored, measures and the data reported on a regular basis. Otherwise the investment may be completely wasted, Zollner warns.
Another mature technology that is now being more widely adopted is the generation of power from solid waste products at our increasingly few landfill sites. “We need to become more conscious and more educated around emissions, environmental problems and consequences, and the seriousness of our lifestyle choices.
“It's a global problem, yes, but we are certainly starting to experience the effects ourselves: in changing weather patterns bringing more flooding, heat waves and droughts. Unless we change individual behaviour around being conscious of our emissions, we will always be slow to take these low emissions practices into our workplace or into the way we do things.
“In Europe, we are starting to see products in supermarkets with emission factors on the labels. This is the future. Any product we manufacture for sale will have to have its net emissions footprint published so that consumers can make informed choices. Just as electrical goods now come with an energy efficiency factor, products will be rated according to how ‘greenly’ they were manufactured.
“This all starts with industry, manufacturers, businesses, facility managers and individuals starting to monitor and record their emissions contributions so that, together, we can all change our behaviour, make better choices and steadily reduce our own national and personal contributions to global warming and climate change,” Eckart Zollner concludes.