Carbon Tax from 2015, as New Biofuels Incentive Is Unveiled
by Terence Creamer (Polity.org.za) The South African government has confirmed that a carbon tax will be phased in from January 1, 2015, as part of South Africa’s efforts to mitigate the effects of climate change and encourage energy efficiency measures.
…The National Treasury’s current plan is to initiate the first carbon-tax phase between 2015 and 2020, starting with a tax at a rate of R120/t of carbon dioxide (CO2) equivalent, increasing by 10% a year during the first implementation period.
A basic tax-free threshold of 60% is proposed, as well as offset percentages of 5% to 10% to allow “emission-intensive and trade-exposed industries to invest in projects outside their normal operations to help reduce their carbon tax liabilities”.
The National Treasury, which typically eschews all forms of ring-fencing, has also indicated that “some of the revenues generated through the carbon tax will be recycled to fund the energy efficiency savings tax incentive”.
…The National Treasury also unveiled an “infant industry” support mechanism for the proposed introduction of eight biofuels manufacturing plants, which will be phased over the assumed 20-year lifetime of a benchmark plant.
The initial cost of the incentive will be 3.5c/l to 4c/l of petrol or diesel, recovered through a levy included in the monthly fuel-price determination.
Government will increase the general fuel levy and Road Accident Fund levy by 22.5c/l and 8c/l respectively as from April 3, 2013. READ MORE