Sibanye-Stillwater and ArcelorMittal SA ‘totally reject’ carbon tax plans
Big energy users including Sibanye-Stillwater and ArcelorMittal’s local unit opposed plans by SA to enact long-delayed carbon tax laws in 2019, arguing on Wednesday that the levies were unaffordable and should be scrapped or delayed.
The carbon tax has already been postponed at least three times since first being mooted in 2010, after mining companies, steel firms and Eskom said the tax would erode profits and push up electricity prices.
Former finance minister Malusi Gigaba said in February that Africa’s most industrialised economy would implement the carbon tax from January next year — part of a raft of tax changes that include raising value added tax for the first time in 25 years in a bid to plug a revenue hole.
The new law would affect about 1,000-1,500 companies and 75% of national emissions. It proposes a tax rate of R120 per tonne of carbon dioxide equivalent and states that total tax-free allowances during the first phase until 2022 can be as high as 95%.
"Sibanye-Stillwater’s position on the imposition and implementation of a carbon tax remains the same, that is, a total rejection of the carbon tax in any shape, form or quantum," the gold and platinum miner said.
It delivered its opinion in a written presentation to Parliament at the start of public hearings on the second draft carbon tax bill, released in December.
Developed in line with the "polluter pays" principle, the proposed carbon tax bill includes staggered increases and tax breaks in the early years, allowing companies to pay R6-R48 per tonne in the first phase, the Treasury said.
SA ratified the Paris climate change pact two years ago and has pledged to cut emissions by almost half by 2030, when they are expected to peak at between 398-million tonnes and 614-million tonnes of carbon dioxide equivalent.
Industrial firms say the proposed tax fails to take into account a lower carbon path already adopted, will create policy uncertainty and diminish SA’s investment allure.
ArcelorMittal SA opposed the carbon tax bill on the grounds that it would hurt the steel firm’s competitiveness, at a time when it was struggling with cheaper imports and weak demand.
"When considering 2016 and 2017 financial figures, the estimated carbon tax payable would have affected ebitda figures by 57% to 100%, which should be cause for concern," said Siegfried Spanig, environment group manager at ArcelorMittal SA unit in his submission at the hearings.
The company said its estimated carbon tax liability would be in the region of R100m a year, and wanted changes to be made, including additional tax incentives to protect struggling companies.