[miningmx.com] — THE government is looking to introduce a carbon tax next year to reduce harmful greenhouse gas emissions, although nearly two-thirds of emissions will be tax-exempt until 2020 to lessen the impact on industry, the Treasury said on Wednesday.
In its 2012/13 budget, the Treasury proposed a 60% tax-free threshold on annual emissions for all sectors, including electricity, petroleum, iron, steel and aluminium.
All but electricity, where state-owned power utility Eskom dominates, would be able to claim additional relief of at least 10%.
Companies have said a carbon tax that places too heavy a burden on the key energy, mining and manufacturing sectors – already under pressure due to rising power and wage costs – will hit profits and wider economic growth.
“To minimise adverse impacts on industry competitiveness and effectively manage the transition to a low carbon economy, temporary thresholds are proposed… which an exemption from the carbon tax will be granted,’ the budget said.
It proposed a carbon tax of R120 per tonne of CO2e (carbon dioxide equivalent) for emissions above the thresholds. The levy would come into effect in 2013/14, and increase by 10% a year until 2020.
The Treasury said the draft policy would be published later this year.
