South Africa's Energy Fiscal Policies
An inventory of subsidies, taxes, and policies impacting the energy transition
-
Our subsidy inventory found ZAR 172 billion (USD 10.4 billion) of energy subsidies in total in FY 2020/21.
-
Current environmental taxation does not match the social costs associated with the combustion of fossil fuels. Societal costs associated with air pollution and GHG emissions from fossil fuels in South Africa are estimated to be a minimum of ZAR 550 billion (USD 33 billion) per year.
-
Government should review energy fiscal policies and align them with South Africa's Paris Agreement commitments and long-term economic interests.
Energy fiscal policies (of which fossil fuel subsidies are a subset) in South Africa are linked to promoting domestic energy production, increasing energy security, and providing access to affordable energy. This report aims to assist the South African government by identifying whether or not its energy fiscal policies are aligned with its stated objectives for the energy sector. Fiscal policies include broad government spending, including subsidies, taxes, and grants.
The report compares fossil fuel subsidies, tax and non-tax revenues, and externalities, revealing that social costs are five times higher than revenues and that billons are spent every year on propping up the fossil fuel industry.
You might also be interested in
South Africa’s Energy Subsidies Tripled Since 2017, Hitting ZAR 172 Billion in 2020
Energy subsidies in South Africa more than tripled between FY2017 and FY2020 to ZAR 172 billion (USD 10.4 billion), with the highest subsidies allocated to fossil fuels, according to a new report.
Indonesia Must Quadruple its Annual Renewable Investment Target
Indonesia should quadruple its annual investment target for new and renewable energy to over USD 8 billion by 2025, according to a new brief by the International Institute for Sustainable Development (IISD)
Why South Africa should stop spending billions to support fossil fuels
Pollution from fossil fuel use costs South Africans hundreds of billions of rands in public health damage and environmental harm each year, say Chido Muzondo and Richard Bridle.
Govt spends billions subsidising fossil fuels at huge social cost - report
South Africa is the biggest emitter of greenhouse gases on the continent, with Sasol and Eskom together responsible for more than half of these emissions. A report published by the International Institute for Sustainable Development (IISD) says South Africa spent R172 billion on energy subsidies in the 2020 financial year, with the highest subsidies allocated to fossil fuels.