The petrochemical giant said its updated strategy is in line with its commitment to accelerate a transition to a low-carbon world in support of the objectives of the Paris Agreement.
To align with its 2050 ambition, the company has tripled its 2030 greenhouse gas emission reduction targets to 30% off a 2017 baseline for its South African operations, from an initial 10%.
“Based on detailed assessments and modelling, our 2030 target can be delivered without divestments and offsets, but through the direct decarbonisation of our existing assets,” Fleetwood Grobler, Sasol’s president and chief executive, said in a statement.
This will be achieved through a mix of energy and process efficiencies, investments in renewables as well as a shift to incremental natural gas as a transition feedstock for its Southern African value chain, he said.
“These solutions are well known and mostly under our control, and the investments required are cost-effective, preserving strong returns in our business, above the cost of capital,” Grobler added.
This transition, he said, will see the company progressively shifting away from coal to cleaner energy sources such as hydrogen. Beyond 2030 Sasol had more than one viable pathway to reach its net zero ambition by 2050, with different options to transform its value chain.
This entails progressively shifting its feedstock away from coal towards more transition gas and then to green hydrogen and sustainable carbon over the longer term “as economics improve for these options”.
Sasol said South Africa holds significant promise for renewables and low-cost green hydrogen production for own use and export opportunities.
This requires national plans to be established by industry stakeholders and the government to develop opportunities and maximise localisation opportunities to create jobs and economic wealth.
The Centre for Environmental Rights said civil society welcomes Sasol’s updated decarbonisation commitments and net zero ambitions.
“It is heartening to see a corporation responding to the global race towards net zero, increased government regulation and pressure to reduce carbon emissions. We started participating as activist shareholders during Sasol’s AGMs a few years ago and we can see the change in how they are responding to climate related financial and other risks,” it said.
“Sasol clearly recognises that the only financially viable option for its business, particularly in South Africa, is to ensure an urgent and just transition to renewables, green hydrogen, biomass and direct air capture.”
But it said that although civil society organisations recognise Sasol’s commitment and the various business challenges the company faces, concerns remained about its reliance on natural gas as a transition fuel.
“Investments in and reliance on natural gas feedstock till 2050 could lock Sasol into yet another polluting fossil fuel, while suitable renewable and biogenic alternatives are available and could be transitioned to at a faster pace,” the centre added.
Last week, Just Share and Aeon Investment Management co-filed a non-binding, advisory shareholder resolution at Sasol, for tabling at its 19 November AGM — the first time such a resolution has been filed in South Africa. The resolution asks Sasol to improve and expand its disclosure of its direct and indirect climate lobbying, including disclosing the annual membership fees paid to industry associations involved in climate lobbying activities.