Sasol lacks access to gas for emissions reduction plan, study says
Company has confirmed access only to about 10% of the natural gas needed to displace coal, Global Climate Insights says
Sasol, SA’s second-biggest producer of greenhouse gases, risks missing its climate targets if the energy-to-chemicals group can’t secure the alternatives needed to replace coal, according to a study.
The company, which announced a plan in September to reduce emissions 30% by 2030, has confirmed access only to about 10% of the natural gas that will be increasingly needed to displace the dirtiest fossil fuel, according to analysts at Global Climate Insights (CGI). Sasol should also provide more information on the potential use of biomass as a lower-carbon feedstock, they said.
“The company has provided insufficient data” for an independent assessment on meeting emissions targets before the annual meeting on November 19, when shareholders will vote on the company’s latest climate change plan, according to GCI.
Sasol disagrees with the report and said in an emailed response to a Bloomberg News request for comment that a proper understanding of the company’s complex operations is necessary to do an accurate analysis. In recent years, the firm has been assailed by climate activists and investors for limited progress in cutting emissions.
The company has sourced gas by pipeline from fields it developed in Mozambique. But because output from those areas is declining, it’s looking at planned import terminals and the potential for a 2,600km pipeline to northern Mozambique’s mammoth offshore discoveries.
Most of the coal that Sasol mines is used for its own operations, but it also exports the fuel and recently hedged that production will benefit from higher prices. Halting such sales could cut the company’s Scope 3 emissions by 13%, which cover the use of its products, and allow Sasol to exceed its target in that category, GCI said.
As part of the transition from coal, Sasol will set up a new business unit, ecoFT, which will focus on developing its proprietary Fischer-Tropsch technology. The company produces about 2.3-million tonnes of so-called grey hydrogen from coal in its manufacturing processes, which it ultimately wants to replace with green hydrogen made using renewable energy.
In its response to the report, Sasol reiterated a commitment to reducing emissions at all operations, achieving its 2030 targets and realising its 2050 net-zero ambition.
Bloomberg News. More stories like this are available on bloomberg.com
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