South Africa’s biggest greenhouse gas emitter in the private sector says it is not a climate denier and it plans to cut its emissions by 10% from current levels by 2030. Gas will play a key role in this pivot.
Petrochemicals giant Sasol has come under fire for its CO2 output, which at 56 million tonnes per year exceeds that of many developing economies. In South Africa, only state-owned power utility Eskom, with its heavy reliance on coal, is a bigger emitter. That has made Sasol a target of conservationists and raised concern among investors at a time when it has had to deal with other sticky issues such as massive cost overruns at its Louisiana chemicals project, a delay in the unveiling of its results, and the departure of its two CEOs.
The company said this week in its sustainability report that it aims to reduce those emissions by 10% by 2030, with gas exploration and production seen as playing a big role.
“We are not a climate doubter,” Gilbert Yevi, Sasol’s VP for exploration and production, said at a media briefing on Wednesday at the Africa Oil Week conference in Cape Town. “We believe that we need to do our part and … get this problem under control.”
Gas, which emits about 50% less CO2 than coal, and which has come into sharp focus as a potential game-changer for power generation in power-starved Africa, is key to Sasol’s strategy.
“Gas will be the transition fuel and we are scouring the SADC region for gas,” Yevi told journalists.
Its activities in this regard include exploration in Zimbabwe, the Karoo, KZN, Namibia, Angola, Botswana for shale gas, and the Orange River basin. But Mozambique, where Sasol is already a gas producer, is “the heartland of Sasol”, Yevi said. The company has already invested over $10-billion there and added 6.4% to Mozambique’s GDP. Yevi said Sasol was getting “a decent return” on that investment.
Part of his message was that Sasol can reduce its carbon footprint without damaging shareholder value. In fact, amid a new scramble for gas, it might even prove to be extremely profitable.
Sasol’s emissions target is sure to be criticised by environmental activist groups such as Greenpeace, which has described its pollution levels as “airpocalyptic”.
South Africa is currently gripped by drought and is facing acute water shortages which have raised fresh alarm bells about the widening social and economic impact of the climate crisis. But long-term targets can be revised up or down, as Sasol’s experience with costs in Louisiana has shown. More ambitious cuts may be in the pipeline once new gas projects get under steam. BM