Sasol Plots New Emission Discount Route as Fuel Plan Teeters

Sasol Ltd. Chief Govt Officer Simon Baloyi is searching for a brand new path for South Africa’s second-largest polluter to succeed in its emissions goal after doubling down on coal to run its gasoline and chemical substances manufacturing. 

The Johannesburg-based firm plans to spice up the usage of renewable power to counter the rising dependence on coal, Baloyi mentioned. The agency has confronted rising strain to decrease the emission of greenhouse gases – primarily from the manufacturing course of at its Secunda plant, the world’s greatest single website for emissions. 

Sasol is falling again on coal after encountering obstacles in its plan to pivot to pure fuel and inexperienced hydrogen in its path to internet zero by 2050. The return of Donald Trump — who has promised to assist the coal trade — as US president can also dampen some criticism for corporations utilizing the dirtiest fossil gasoline.

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Sasol identifies itself as a coal-based firm, which is “on the core of the South African financial system” and must transition at a tempo that works for the nation, Baloyi mentioned in an interview at Bloomberg’s Johannesburg workplace final week. Shutting operations to satisfy local weather objectives “for me doesn’t make any logical sense in any respect,” he mentioned.

The corporate has attracted criticism up to now from a few of its greatest shareholders over its decarbonization plans.  The corporate’s hares slipped as a lot as 3.6 p.c in Johannesburg on Wednesday earlier than paring losses. They’ve declined 42 p.c over the previous 12 months, essentially the most on an index of the 40 greatest traded shares within the metropolis.

The outlook shares similarities to current selections by state-owned Eskom Holdings SOC Ltd., the one emitter larger than Sasol, that makes use of coal for greater than 80 p.c of South Africa’s electrical energy manufacturing. The utility is operating items past their slated retirement date to be able to stabilize energy provide following years of file blackouts that crimped the financial system.

Sasol in 2021 pledged to scale back its emissions 30 p.c by the tip of the last decade by substituting coal with extra fuel – delivered by pipeline from operations in neighboring Mozambique. The corporate has been criticized over time, in a report and separate coverage temporary, for missing satisfactory entry to the alternative gasoline that raises its dangers.

“That GHG technique was predominantly based mostly on numerous fuel coming in, and the place are we at the moment? We all know there’s no fuel in Mozambique,” and Sasol’s current wells are operating down, Baloyi mentioned, referring to greenhouse fuel. Sasol stays dedicated to the 30 p.c emissions discount goal, “however we are able to’t do it the way in which we thought we have been going to do it,” he mentioned.

The corporate’s revised technique will have a look at power effectivity to scale back the quantity of steam wanted all through its amenities. It could improve the 750 megawatts of inexperienced power it’s already sourced and that can assist scale back coal consumption, based on the CEO. “If we have to double up on renewable power from one gigawatt to 2, we’ll do this.”

There will probably be extra to offset if Sasol improves the provision and high quality of coal it mines to feed its operations and revive gasoline and chemical manufacturing from Secunda. 

A plan to take away stones from coal might see manufacturing improve manufacturing from the present 7 million tons. Output was at 7.6 million tons in 2021. 

Sasol’s ambition to succeed in internet zero in 2050 was launched by Fleetwood Grobler, Baloyi’s predecessor, who three years in the past emphasised transferring shortly on know-how to supply inexperienced hydrogen within the wake of Ukraine’s invasion of Russia. 

The corporate has appeared right into a mission on the port of Boegoebaai on South Africa’s northwest coast that may export the gasoline and supply home provide for its personal operations.

However the worth of the clear power has deterred patrons. Sasol sees little profit from being a primary mover from utilizing the know-how, based on Baloyi. 

“Why do you wish to be like a guinea pig of know-how,” he mentioned. 

Firm research have discovered the realm close to the mission might help as a lot as 200 gigawatts of renewables if supporting infrastructure comparable to ports are constructed after which “you nearly get inexperienced hydrogen without cost,” he mentioned.