South African Treasury delays levy on electricity from nonrenewable sources
Thématique :
sud afrique
The implementation of a 2c/kWh environmental levy on electricity generated from nonrenewable resources, put forward by Finance Minister Trevor Manuel in the 2008 Budget, in February, has been postponed to July.
“The proposed electricity levy, delayed until next year, will be broadened to cover other large carbon producing enterprises,” the National Treasury added.
The date of implementation would coincide with the start of the next municipal financial year.
“The electricity levy should be seen as the first step towards the introduction of a more comprehensive emissions based carbon tax,” the National Treasury said in its 2008 Medium Term Budget Policy statement (MTBPS).
Electricity generated from renewable sources, such as wind, water and solar, as well as power produced through cogeneration, which helped to limit carbon dioxide (CO2) emissions, would be exempt from the levy.
The levy would be collected at source by the generators of electricity.
The bulk of State-owned power producer Eskom’s electricity was generated through coal combustion.
Upon its initial announcement, the levy was met with resistance, as the country’s electricity prices were already increasing to help fund power utility Eskom’s capital expenditure programme. Cheap electricity had been a feature used to attract energy intensive business, and foreign investment to the country.
Business Unity South Africa said it welcomed the postponement of the electricity levy until next July, as well as the financial support for Eskom that was confirmed in the MTBPS.
On the other end of the spectrum, nongovernmental organisation, Earthlife Africa, voiced it's dissapointment at the delayed introduction of the levy.
The 2c/kWh levy was an attempt to begin addressing the challenges of climate change and promote more sustainable renewable energy generation, as well as to increase energy efficiency, given South Africa’s electricity supply shortage.
The National Treasury noted that throughout the world, the carbon trading market was maturing, and slowly beginning to have the desired effect of moving resources from energy inefficient producers, to more efficient ones.
“South Africa is exploring the use of similar market based mechanisms to encourage companies to produce more efficiently,” it said.
South Africa ranks among the 20 largest CO2 emitting countries, and has one of the highest rates of greenhouse gas emissions per unit of gross domestic product.
Other than supporting renewable energy sources and promoting energy efficiency, efforts to reduce carbon emissions included increasing public transport capacity, and improving technologies used in power generation.
Measures to reduce greenhouse gas emissions in public transport would be explored.
ENERGY EFFICIENCY
In the 2008 Budget, an allocation was announced to subsidise the costs of investment in energy efficiency, which included demand-side management and renewable energy sources.
The National Treasury said that over the medium term it would scale up these programmes to support the expansion of the renewable energy sector.
An additional R180-million has been allocated for the roll-out of energy demand side management programmes.
“The principal focus is replacing incandescent light bulbs with compact fluorescent light bulbs as part of the strategy to mitigate against the current electricity emergency situation,” the National Treasury said.
No mention was made of solar water heaters or energy efficient pumps and motors.
The National Treasury also indicated that it would spend R20-million on the retrofitting of government buildings to improve energy efficiency.
“The proposed electricity levy, delayed until next year, will be broadened to cover other large carbon producing enterprises,” the National Treasury added.
The date of implementation would coincide with the start of the next municipal financial year.
“The electricity levy should be seen as the first step towards the introduction of a more comprehensive emissions based carbon tax,” the National Treasury said in its 2008 Medium Term Budget Policy statement (MTBPS).
Electricity generated from renewable sources, such as wind, water and solar, as well as power produced through cogeneration, which helped to limit carbon dioxide (CO2) emissions, would be exempt from the levy.
The levy would be collected at source by the generators of electricity.
The bulk of State-owned power producer Eskom’s electricity was generated through coal combustion.
Upon its initial announcement, the levy was met with resistance, as the country’s electricity prices were already increasing to help fund power utility Eskom’s capital expenditure programme. Cheap electricity had been a feature used to attract energy intensive business, and foreign investment to the country.
Business Unity South Africa said it welcomed the postponement of the electricity levy until next July, as well as the financial support for Eskom that was confirmed in the MTBPS.
On the other end of the spectrum, nongovernmental organisation, Earthlife Africa, voiced it's dissapointment at the delayed introduction of the levy.
The 2c/kWh levy was an attempt to begin addressing the challenges of climate change and promote more sustainable renewable energy generation, as well as to increase energy efficiency, given South Africa’s electricity supply shortage.
The National Treasury noted that throughout the world, the carbon trading market was maturing, and slowly beginning to have the desired effect of moving resources from energy inefficient producers, to more efficient ones.
“South Africa is exploring the use of similar market based mechanisms to encourage companies to produce more efficiently,” it said.
South Africa ranks among the 20 largest CO2 emitting countries, and has one of the highest rates of greenhouse gas emissions per unit of gross domestic product.
Other than supporting renewable energy sources and promoting energy efficiency, efforts to reduce carbon emissions included increasing public transport capacity, and improving technologies used in power generation.
Measures to reduce greenhouse gas emissions in public transport would be explored.
ENERGY EFFICIENCY
In the 2008 Budget, an allocation was announced to subsidise the costs of investment in energy efficiency, which included demand-side management and renewable energy sources.
The National Treasury said that over the medium term it would scale up these programmes to support the expansion of the renewable energy sector.
An additional R180-million has been allocated for the roll-out of energy demand side management programmes.
“The principal focus is replacing incandescent light bulbs with compact fluorescent light bulbs as part of the strategy to mitigate against the current electricity emergency situation,” the National Treasury said.
No mention was made of solar water heaters or energy efficient pumps and motors.
The National Treasury also indicated that it would spend R20-million on the retrofitting of government buildings to improve energy efficiency.
