Electricity + Control

Silvana Claassen, CES South Africa

Following the promulgation of the National Greenhouse Gas Emission Reporting Regulations during April this year, the National Pollution Prevention Plans Regulations were announced in the Government Gazette 40996 on 21 July together with the Declaration of Greenhouse Gases as Priority Air Pollutants.

Mitigation of GHG emissionsThese sets of rules (further throughout this article referred to as ‘The Regulations’) were introduced within a short timeframe and not long after South Africa ratified the international Paris Climate Agreement. Is this an indication that South Africa is progressively preparing the regulatory and administrative infrastructure required for a low carbon economy? The aim of this article is twofold: to provide clarity on how these regulations are linked, thus helping companies to develop systems that enable compliance in a strategic and efficient manner; ánd to highlight some key background-elements to create for an understanding of these regulations within a broader context of international climate change treaties and agreements.

Why this sudden introduction of greenhouse gas emissions regulations?

The Regulations have been introduced in a timeframe of less than four months and within less than half a year after South Africa ratified the Paris Climate Agreement in November last year (2016). At the same time, these sets of rules are the first that are directly targeting greenhouse gas emissions in South Africa. Could this be the beginning of a new series of snowballing regulations? In the run up to the Paris climate summit that took place in December 2015, South Africa submitted its ‘Intended Nationally Determined Contribution’ (INDC) containing a commitment to reduce its greenhouse gas emissions to a range of between 398 and 614 MtCO2e by 2025 and 2030 (to put this into perspective, South Africa emitted 462 MtCO2e in 2015 [1]). When the Paris Agreement entered into force in November 2016, this commitment became internationally binding.

The emission reduction target is adopted from the National Climate Change Response White Paper of 2011. It could therefore be questioned whether this target is in line with current knowledge about the global carbon budget and required level of ambition to keep the rise in global average temperature below 2°C. Although such debate is beyond the scope of this article, analysis backed by science demonstrates that countries (including South Africa) must set more ambitious targets in order to achieve what they signed up for [2]. Nevertheless, South Africa committing to climate action at an international level has an impact on the regulatory environment in which South African businesses operate. South Africa is a Party to the United Nations Framework Convention on Climate Change [UNFCCC]. When a Party to this convention signs the Paris Agreement it has the obligation to translate its intended international commitments into national policies to be implemented in its own legal systems. Consequently, the National Greenhouse Gas Emission Reporting Regulations and the National Pollution Prevention Plans Regulations together with the Declaration of Greenhouse Gases as Priority Air Pollutants have now entered into force.

Legal connection between The Regulations

The Regulations are linked to each other through the overarching National Environment Management Air Quality Act (No 39 of 2004) [NEMAQA]. The Regulations give content to Sections 53, 12 and 29 of NEMAQA. Section 53 stipulates that regulations may be introduced to give effect to South Africa’s international commitments. When South Africa signed and ratified the Paris Agreement, NEMAQA’s Section 53 became applicable and consequently The Regulations were introduced. The National Greenhouse Gas Emission Reporting Regulations [NGERs] and the National Pollution Prevention Plans Regulations [NPPRs] give content to Sections 12 and 29 of NEMAQA respectively. The NPPRs are an instrument to address the actual mitigation of emissions, where the NGERs are regulating the administrative side by imposing legal obligations to monitor and report on emissions.

Practical connection between The Regulations

The Technical Guidelines for Monitoring, Reporting and Verification of Greenhouse Gas Emissions by Industry [Technical Guidelines], which were made available by the Department of Environmental Affairs [DEA] in April 2017 together with the NGERs, link The Regulations in a practical way. The NGERs contains an ‘Annexure 1’ which lists activities that are sources of greenhouse gas emissions. Companies performing one or more of these ‘listed’ activities ánd with an installed capacity exceeding a defined threshold (e.g. 10 MW(th)) are required to report on their annual greenhouse gas emissions as per the NGERs. The NPPRs contain an ‘Annexure A’ which also lists activities that are sources of greenhouse gas emissions. Companies in control of one or more of these activities ánd emitting in excess of 0,1 MtCO2e per year must submit Pollution Prevention Plans. This plan must outline what the company is planning on doing to reduce its annual greenhouse gas emissions. The NGERs and the NPPRs have got in common that both sets of rules require an annual calculation of greenhouse gases emitted ánd that the Technical Guidelines are followed in doing so. Annexure 1 of the NGERs and Annexure A of the NPPRs are not identical: Annexure A of the NPPRs is much shorter (15 production processes at the time of writing this article). It is safe to say that activities listed in Annexure A are also on the list of Annexure 1 of the NGERs. However, all activities listed in Annexure 1 are not necessarily also listed in Annexure A. For example, cement production is an activity that is listed in Annexure A of the NPPRs ánd also in Annexure 1 of the NGERs, hence both regulations are applicable (provided that the company is meeting the capacity threshold and the greenhouse gas emissions ‘minimum’ of 0,1 MtCO2e per year). But for example, a waste management site is required to annually report on its greenhouse gas emissions (on condition that it has a capacity of more than 25 000 tonnes) but the NPPRs are not applicable.

What do the National Pollution Prevention Plans Regulations mean for businesses?

The NPPRs were promulgated on 21 July 2017. This means that on 21 December 2017 (five months from the date of promulgation) companies must submit their first Pollution Prevention Plan (PPP). This plan must cover the period between 21 July 2017 and 31 December 2020. Subsequent PPPs must cover a five-year period. Next to the five-yearly submission of a PPP, companies must submit a progress report by 31 March each year, indicating on how they are meeting the targets set out in the PPP. Non-compliance to these Regulations may result in a maximum fine of between R5 M and R10 M and/or a maximum of 10 years imprisonment. Activities covered in Annexure A of the NPPRs include production of coal, cement, glass, paper, chemicals, metals, electricity and fossil fuel refining activities. Evidently the industrial sectors that require significant amounts of energy are targeted by the NPPRs. For an indication, 0,1 MtCO2e emissions translates roughly to the consumption of between 30 and 45 ktonnes (the exact amount depends on the emission factor) of the fuel of diesel, petrol, coal or natural gas.

Anticipated future greenhouse gas emissions regulations

Up and until the introduction of the NGERs, NPPRs and the Declaration of greenhouse gases as priority air pollutants, other environmental regulations, including energy efficiency incentives and renewable energy production programmes, have been in place for some years and have ultimately resulted in greenhouse gas reductions compared to a situation without such incentives. This is mainly due to South Africa’s carbon intensive energy mix, hence instruments aimed at regulating energy-consumption and deviation from carbon intensive energy sources has an indirect on the emissions of greenhouse gases. The Regulations however are directly targeting greenhouse gas emissions through legal obligations to monitor ánd mitigate. It is expected that the introduction of the NGERs, NPPRs and the Declaration is only the beginning of a series of more greenhouse gas related rules. Some of the regulations that are awaiting promulgation are: the allocation of carbon budgets to companies with carbon intensive production processes; proposed phase out of the so-called F-Gases (HFCs, PFCs and SF6 that find applications such as refrigerants, non-stick coatings, high voltage applications, etc.); carbon pricing, e.g. through establishment of a domestic carbon offset mechanism; and of course, the extensively debated carbon tax. Although uncertainty around the introduction of these instruments remains, fact is that climate change is a risk to businesses in South Africa and worldwide. Traditionally climate change would be an issue for companies’ sustainability department. But trends are showing that increasingly organisations are recognising the actual impact of climate change hence climate change related risk mitigation, as well as maximising opportunities is progressively taking up a central position in companies’ business strategies.

Conclusion

Whether or not the NPPRs are applicable to your organisation, assessment of the impact that current and future greenhouse gas legislation has on your business-activities is a sensible thing to do in this dynamic regulatory environment.

References

[1] Global Carbon Atlas (http://www.globalcarbonatlas.org)
[2] Climate Action Tracker (http://climateactiontracker.org)

Enquiries: Email silvana@carbon-energy-solutions.co.za

Image credit:  Copyright: papa1266 / 123RF Stock Photo

 
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