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Sasol has presented its 2020 Climate change roundtable. As I listened to the team of executives unfolding their roadmap, a sense of déja vu crept in. I had read Sasol’s previous Climate Change Report from June 2019 fairly recently. The latest presentation consists of re-hashed ideas and ideology.
It seems that the petrochemical giant is stuck in a cycle of discussions, consultations and ‘Requests For Information’ from all and sundry. The company has plans aplenty, all laid out in visually appealing diagrams but it appears to be suffering from analysis paralysis. There’s no denying that South Africa’s socioeconomic situation is unique with large communities and thousands of jobs dependent on Sasol’s operations in its current form. These include coal mining, coal to liquid operations and chemical products.
Sasol’s leadership readily admits that the science of climate change is undeniable and that it fully accepts it as a reality. The Paris agreement is regularly mentioned in relation to the company’s green house gas emissions reduction goals.
A coalition of shareholder activists, led by Just Share and Raith Foundation attempted to table a climate change related resolution for consideration at Sasol’s 2020 Annual General Meeting. Sasol maintains that the resolution was not submitted in time for the AGM’s agenda and could not be reviewed. “A nonbinding Advisory vote will be taken at the 2021 AGM”, says CEO Fleetwood Grobler. If there’s a 25% vote against Sasol’s plans, it has committed to consultation with shareholders.
The group says it will release its 2050 Climate Change Roadmap at its next capital markets day between April and June 2021. Grobler asserts that it is too soon to say whether or not the 2030 goal of reducing emissions from South African operations will be met. The goal is to reduce carbon dioxide emissions from local operations by 10% to 57.5 million tons from the 2017 baseline of 63.9 million tons of carbon emissions.
This target has been described by critics as less than ambitious. The CEO says that Sasol will use this year to reset, with climate change at the centre of its new strategy. He added that the approach to transitioning to a lower-carbon business would have to be judicious to ensure that no one is left behind.
The world’s single largest green house gas polluter says it will employ renewable energy as part of its carbon emissions reduction plan but that “renewables are no panacea”. It has plans to scale up the beneficiation of captured CO2 and its request for information from interested parties closes on November 16th.
Sasol also has plans to lead the way in the green hydrogen industry in South Africa but says the associated technology is not cost effective yet. In the more immediate future, Sasol plans to implement energy efficiency measures which it outlined previously, to mitigate carbon emissions.
Sasol has admitted that it will soon exhaust its mitigation options and has intensified efforts to find sources of natural gas in neighbouring countries. The company says there isn’t enough in South Africa to hasten the move away from coal and into hydrogen gas.
Sasol says it will most likely import liquified natural gas from Maputo through existing pipeline infrastructure. Grobler says he is aware of the African Renaissance pipeline but that developing such a large project would be costly and complex. “Developing such a mega project would probably involve billions of dollars. It would involve two governments and multiple participants”, said Grobler.
The company has promised an update on its sustainability journey every six months. One might be forgiven for thinking that there are more hurdles and excuses than examples of progress on these Roadmaps.
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