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Media Statement Template
Media Statement Template
Publication of the Draft Regulations on the Carbon Offset in terms of the
draft Carbon Tax Bill for public comment
The National Treasury today publishes the Draft Regulations on the Carbon Offset for public
comment and further consultation. This follows on the publication of the Carbon Offsets
Paper in 2014 and the draft Carbon Tax Bill in November 2015.
The Carbon Offset Regulations was developed jointly by the National Treasury, the
Department of Enegry and the Department of Environmental Affairs in terms of Sections 13
and 20 (b) of the Draft Carbon Tax Bill and sets out the procedure for the use of carbon
offsets by taxpayers to reduce their carbon tax liability.
The Draft Carbon Tax Bill makes provision for the carbon offset allowance in terms of
Section 13. This provides for firms to reduce their carbon tax liability by using offset credits
of up to a maximum of 5 or 10 per cent of their total greenhouse gas (GHG) emissions, as
specified in Schedule 2 of the draft Carbon Tax Bill.
Carbon offsets can be generated through investments outside of a taxable entity’s activities
that results in quantifiable and verifiable GHG emission reductions. In addition such carbon
offset projects should generate sustainable development co-benefits and employment
opportunities in South Africa by encouraging investments in energy efficiency, rural
development projects, and initiatives aimed at restoring landscapes, reducing land
degradation and biodiversity protection.
The carbon offset mechanism is in line with the proposals contained in the National Climate
Change Response White Paper of 2011 and efforts to transition to a low carbon, greener
economy as pronounced in the National Development Plan.
Design of carbon offsets
The proposal to use carbon offsets in conjunction with the carbon tax has been widely
supported by stakeholders as a cost-effective measure to incentivise GHG emission
reductions. Carbon offsets involve specific projects or activities that reduce, avoid, or
sequester emissions, and are developed and evaluated under specific methodologies and
standards, which enable the issuance of carbon credits.
The carbon offset system seeks to encourage GHG emission reductions in sectors or
activities that are not directly covered by the tax. Investments in public transport, agriculture,
forestry and other land use (AFOLU) and waste sectors are likely to qualify.
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Media Statement Template