FLEETWOOD GROBLER: Sasol is looking forward to a low-carbon future
There can be no doubt that 2020 has been a year of unprecedented disruption and upheaval. Around the world the Covid-19 pandemic has highlighted myriad issues and weaknesses in our societies, economies and political spheres. Though these challenges can seem daunting, as we begin lifting our gaze from dealing with the fallout we have an opportunity to be bold in renewing ourselves as a business and the relationship we have with society.
Sasol has faced enormous challenges in 2020, and we responded by taking decisive measures to stabilise the business in an environment of extreme volatility and uncertainty as oil markets collapsed and Covid-19 negatively affected demand for our products. Some of these measures are significant and will transform our business to ensure its long-term sustainability as we transition to a lower carbon economy. We have articulated a new reset strategy to create a future Sasol that reaffirms our commitment to the country of our origin and celebrates our SA heritage in our 70th anniversary, as we look to grow our business at home and internationally.
This process of renewal has prompted reflection on our role as a business and our relationship with our stakeholders and society. Future Sasol will be streamlined and focused, made up of two core, distinct businesses: chemicals and energy. Of particular importance in SA is our energy business. It comprises our fully integrated value chain, from gas sourcing and our mining operations, synthetic fuels and chemicals operations, to our fuels retail network. With our world now shaped by a lower oil price environment, our value chain underpins our ability to grow into the future.
Sasol has historically played a big role in contributing to energy security and the industrial development of the SA economy. Our heritage is inextricably intertwined with our home country and we have the opportunity again as we shape the future Sasol to help the country make the transition to a low-carbon future. The SA energy landscape is seemingly set for significant changes as various role players signal their intentions and develop plans to ensure a long-term, stable source of cleaner energy. Here we see ourselves contributing to reshaping SA’s energy mix and, ultimately, our economy.
In August we released our 2030 road map to realise our greenhouse gas (GHG) emission reduction target, which is central to our energy business in Southern Africa. We are already firmly under way with commercial processes to procure two 10MW solar facilities in Sasolburg and Secunda, as part of our procurement of 600MW in renewable energy as a secondary energy source. Renewable energy will make a material impact on our GHG reduction ambitions in the near term. The scale of this ambition presents opportunities to expand the renewable energy sector by expanding supply chains and stimulating manufacturing activity through mutually beneficial partnerships that will allow us to play a leading role in the energy transition.
We are vigorously exploring natural gas options and projects as a critical enabler of our ambition to reduce our greenhouse gas and other emissions, as we shift away from coal after 2030. Though this has a longer time horizon for development, affordable natural gas will transform our business from the middle of this decade, so we are positioned to further improve our sustainability from 2030.
Beyond these steps, we have dedicated technology experts exploring alternative energy sources and technologies. One of these areas is exploring the potential of hydrogen as a viable, large-scale source of energy. Sasol produces big volumes of hydrogen and it holds promise as technologies are developed and the economics become conducive to incorporate in our energy mix. Sasol is a member of the government’s SA Hydrogen Society, which is tasked with developing a hydrogen road map for the country. We recently participated in a hydrogen fuel cell demonstration project led by the department of science & innovation to provide power to One Military Hospital in Pretoria. We have also commenced with a request for information process for carbon capture and utilisation technologies. This particular area is nascent, but we want to explore all options that hold promise at demonstration level to commercial level.
Partnerships will play a greater role in Sasol and we see great opportunity to work more closely with the government, other businesses and stakeholder groups as we help the country make a just transition to a low-carbon future. As the journey towards SA’s future energy mix gets under way, skills will need to be developed and capacity expanded to enable a sustainable energy future landscape. Through our business, we are also able to deliver social value where development is much needed in our communities, and this will continue for the long term.
Our operating context has dramatically changed from a world that was defined by an oil market of $60 a barrel to $45 a barrel. Though this has meant making difficult choices, we have laid a path that will ensure Sasol continues to provide the chemical and energy products and solutions that underpin our modern way of life and keep society sustainably moving. Seventy years strong, experienced and technology driven, we look forward to helping reshape the future.
• Grobler is Sasol president and CEO.
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