Proposals on how firms could offset their carbon tax liability by buying into so-called offset projects were tabled for public comment on Tuesday.
The Carbon Offset Paper “outlines proposals for a carbon offset scheme that will enable businesses to lower their carbon tax liability and make investments that will reduce greenhouse gas emissions”, the Treasury said in a statement.
The carbon offsets scheme is designed to complement the carbon tax South Africa plans to introduce from 2016.
“A carbon offset is a measurable avoidance, reduction, or sequestration of carbon dioxide or other GHG [greenhouse gas] emissions.”
Offsets would allow firms to effectively lower their carbon tax liability as well as “incentivise investment in least-cost mitigation options in the country”.
The paper spells out the types of off-set projects envisaged and the principles that must be fulfilled for a project to be awarded a tradable emissions reduction credit under a specific standard.
Among other things, projects that generate carbon offset credits “must occur outside the scope of activities of the entity subject to the carbon tax”.
Further, “only South African based credits will be eligible for use within the carbon offset scheme”.
Offsets could include, among a wide range of others, investment in small-scale afforestation, municipal waste projects, public transport, fuel switching projects and energy efficiency measures.
Full details are contained in the paper, which can be viewed on the Treasury’s website www.treasury.gov.za.
In its statement on Tuesday, Treasury said all written comments on the document should be submitted to Peter Janoska, at e-mail email@example.com by the close of business on June 30 this year. – Sapa