MONDE TYUSHA: Just energy transition: SA isn’t taking the right lessons from Brics

The cabinet’s approval in November 2021 of new carbon targets for companies, including Eskom, marks a positive step towards meeting SA’s carbon emissions targets. Viewed together with the Glasgow Climate Pact, funding from the Glasgow Financial Alliance for Net Zero and the long-awaited Climate Bill, South Africans have a lot to celebrate, at least on paper. 

But the country’s energy users are in desperate need of reliable energy sources right now. Liquefied petroleum gas (LPG) is a prime available solution.

With the economy losing R500m-R700m per day per stage due to load-shedding, and South Africans estimated to have endured more than 1,000 hours of blackout darkness in 2021, this should be enough incentive for government to create an enabling environment for the growth of the LPG market in SA. We cannot afford to waste time on ideas and projects that cannot provide short-term relief at this critical time when our economy is on life support.

While SA’s leaders pour over policies and legislation and mobilise international support, our partners in the Brics (Brazil, Russia, India, China and SA) bloc have steadily taken greater advantage of LPG as an abundant global resource. For all the criticism of India and China’s slow action on climate change, they have been proactive in advancing LPG use as at least one concrete measure towards achieving a just energy transition.

Since as far back as 2017 India has been hot on China’s heels for the top spot as the world’s largest LPG importer. In India this growing demand is largely attributable to the government subsidising residential LPG consumption. By 2018/2019 India’s LPG imports had grown to a reported 24.9-million tonnes.

By contrast, the draft LPG rollout strategy released by mineral resources & energy minister Gwede Mantashe for public comment in April 2021 showed that SA consumed just over 300,000 tonnes of LPG a year, with imports increasing due to the limited and decreasing ability of the local refineries to produce LPG. Though industry estimates using the latest data put the real annual consumption closer to 400,000 tonnes, this is still dismally low considering the continued growth in imports and the availability of LPG import capacity.

The draft LPG rollout strategy aims to double SA’s LPG consumption within the next five years, which would require an additional 300,000 tonnes of LPG imports. In reality, according to economic advisory experts IHS Markit, we may not even hit this modest target by 2030 due to downstream infrastructure constraints and LPG pricing issues.

To understand the full magnitude of SA’s lag, consider some differences in household LPG consumption per year among Brics nations. According to UN data, in 2018 SA households consumed about 244,000 metric tonnes of LPG annually, compared to 31.4-million metric tonnes in China and 21.7-million metric tonnes in India. This equated to a household LPG consumption of about 4kg per capita per annum in SA, versus many multiples of that in other Brics nations — 24kg and 16kg per capita per annum for China and India respectively.

In an impressive feat, India has managed to double its total consumption in the last 10 years, while China doubled its total per capita consumption from 10kg to over 20kg in just six years.

The shift to LPG in Indian households has largely been motivated by the fact that using LPG for cooking is healthier than wood or animal dung, which are the cheaper alternatives now relied on by poor families. LPG is also infinitely more efficient. As a result of the subsidisation drive, India has seen the number of subsidised households rise from 140-million to 181-million homes by 2017. Indian demand is expected to reach 34-million tonnes of LPG a year by 2030.

SA has important reasons to shift to LPG. For one thing, substituting LPG for paraffin and other dangerous and low calorific energy sources used by poor families could vastly reduce the incidence of shack fires that devastate entire communities each year. The shift to LPG would also help reduce deforestation in rural areas. LPG can also be of great assistance in isolated rural communities where electrification has been harder to achieve. Like India, SA needs a better fuel source for poor households. Sadly, we are nowhere near India’s proactiveness in addressing this imperative.

Residential consumption is not the only factor that accounts for the increase in LPG imports internationally. In China it is industry that relies heavily on LPG, especially the petrochemical sector. Only half of China’s imported LPG is consumed by residential users; the other half is directed towards industrial use.

By 2019, China’s LPG imports had grown to 20.5-million metric tonnes a year from 4.2-million tonnes in 2013, demonstrating how rapidly this substitution can be achieved by putting effort into developing other LPG sectors, such as LPG-to-power, LPG as a substitute for heavy fuel oil in industrial applications, and LPG as auto gas.

With the growing global supply of liquefied gas, thanks in large part to the shale revolution and natural gas processing in the US, the time has never been better for SA to drive a pro-gas agenda towards low carbon emission. This will support the government’s other efforts to power the country’s just transition. Alongside funding from the Glasgow Financial Alliance for Net Zero, the new carbon targets and the Climate Bill, an intense India-style drive towards LPG for residential use would boost SA’s just transition.

Our ability to capitalise on the benefits of LPG depends only on our willingness to shift our orientation from a talking and waiting culture to a doing culture. We cannot wait for generous donations at yearly climate conferences to power our just energy transition. We need to have our eyes open for every opportunity to improve our record on climate action while improving the lives of South Africans in real, practical ways. We need to take heed of the positive LPG lessons we can learn from our Brics partners.

• Tyusha is CEO of Sunrise Energy, a liquefied petroleum gas import facility in Saldanha, Western Cape.