The South African National Treasury has published a discussion document for public comment on Phase 2 of the Carbon Tax. Phase 2 covers 2026 to 2035 and considers the Nationally Determined Contributions (NDC).

Stakeholders are invited to submit written comments on the draft proposals to carbontax@treasury.gov.za by the close of business on 13 December 2024. 

The discussion document includes proposed adjustments to the basic tax-free allowance, carbon offsets, the electricity levy, the renewable energy premium and the energy efficiency savings tax incentive.

South Africa has made commitments under the Paris Agreement to reduce emissions between 398 and 510 million tonnes of carbon dioxide equivalent (tCO₂e) by 2025 and 350 to 420 million tCO₂e by 2030 and to reach Net Zero emissions by 2050. 

The Nationally Determined Contributions (NDC) describe the policies and measures to achieve these mitigation goals and adapt to climate change. It includes the finance requirements to support the transition to a lower carbon climate-resilient economy. 

Carbon Tax is an integral part of the package of policy measures to address climate change as recommended in the 2011 National Climate Change Response Policy and the 2012 National Development Plan.

The draft proposals will be revised when the public consultation process is concluded, and it will be announced in the 2025 Budget.