The New 2024 Climate Change Act, signed into law on 18 July 2024, is set to introduce significant regulations on greenhouse gas emissions across various sectors, including mining. While the Act is yet to come into full operation, its provisions outline the future landscape of emissions control in South Africa’s mining industry.
On 23 July 2024, South Africa published the Climate Change Act (No. 22 of 2024) in the Government Gazette, signalling a significant change in environmental legislation. Signed by President Cyril Ramaphosa on 18 July 2024, this Act aims to address the pressing need for climate action by establishing a comprehensive legal framework to regulate greenhouse gas (GHG) emissions across sectors, particularly high-emission industries such as mining. This legislation, though not yet in force, will come into operation once the President issues a proclamation. Mining companies must prepare for its far-reaching impact on their operations and the industry as a whole.
Key Provisions of the 2024 Climate Change Act and Mining
The 2024 Climate Change Act introduces several crucial measures, including carbon budgets, sectoral emission targets, and penalties for non-compliance. These provisions will shape how South African mining companies operate in the future.
2024 Climate Change Act On Sectoral Emission Targets for Mining
The Act requires the Minister of Forestry, Fisheries, and the Environment to publish a list of sectors that will be subject to emission targets within one year of the Act’s commencement. Mining, being one of the most GHG-intensive industries in South Africa, will likely face strict emission limits. The Minister responsible for mining—currently the Minister of Mineral Resources and Energy—will be consulted to determine specific emission limits for the sector. This collaboration between ministries ensures that the targets are feasible but still aligned with national goals for emissions reduction.
For mining companies, the introduction of sectoral emission targets means:
- They will be required to adjust operational processes to reduce emissions, potentially phasing out reliance on fossil fuels such as coal.
- Innovation in mining technology will be critical, with a strong emphasis on adopting cleaner energy sources and improving energy efficiency.
Carbon Budgets and Mitigation Plans
A core feature of the Act is the introduction of carbon budgets, which set specific emission limits for high-GHG-emitting companies. Mining companies will need to submit GHG mitigation plans that outline how they will operate within their allocated carbon budgets. Each budget will span at least three successive five-year periods, ensuring that companies have ample time to implement meaningful changes.
Key details include:
- Companies that have already submitted pollution prevention plans under the National Environmental Management: Air Quality Act (NEMAQA) will have their existing plans considered as GHG mitigation plans for the first five-year cycle. This helps align current regulatory requirements with the new Act, streamlining compliance efforts for companies.
- Mining companies must regularly report their progress, ensuring that their operations remain within the allocated budget. This reporting requirement emphasizes transparency and accountability across the sector.
The introduction of carbon budgets is not new, having been first mentioned in the National Climate Change Response White Paper (2011). However, the Act now provides the legal structure to enforce these budgets, which is a significant step forward in South Africa’s climate policy.
Offences and Penalties
The 2024 Climate Change Act introduces penalties for non-compliance, which are designed to encourage adherence to the new environmental standards. These penalties are particularly relevant for the mining sector, given its high potential for GHG emissions.
The penalties include:
- Fines of up to ZAR 5 million or imprisonment of up to five years for offenses such as providing false or misleading information, failing to submit a mitigation plan, or not complying with sectoral emission limits.
- For repeat offenders, these penalties can increase to ZAR 10 million or up to 10 years of imprisonment.
Although these penalties are significant, the Act notably does not include direct penalties for exceeding a carbon budget or sectoral emission target. Instead, companies that exceed their budget may be subject to increased carbon taxes under the Carbon Tax Act, 2019. This lack of criminal penalties for non-compliance with carbon budgets has drawn some criticism, with environmental advocacy groups arguing that stricter measures would be more effective in enforcing the Act.
Increased Carbon Tax
The Carbon Tax Act, 2019 works in tandem with the 2024 Climate Change Act to ensure that companies that exceed their allocated carbon budgets face financial consequences. Mining companies, many of which already pay carbon taxes, will need to be particularly vigilant in adhering to their carbon budgets to avoid increased taxation.
The Carbon Tax Act introduced a tax on GHG emissions, with mining companies among the largest taxpayers due to their high emissions. Under the Climate Change Act, mining firms that fail to meet their carbon budgets or sectoral emission targets will likely see a steep increase in their carbon tax liability, further incentivizing them to adopt cleaner technologies and reduce emissions.
Reporting and Accountability Under the 2024 Climate Change Act
The Act places a strong emphasis on transparency and accountability. Mining companies will need to report their progress on emission reduction efforts regularly. Failure to report or submitting false reports will result in fines and other penalties.
This requirement is crucial for the mining sector, where accurate reporting on emissions and mitigation measures will be necessary to avoid penalties. In addition to GHG mitigation plans, companies will need to provide data on how they plan to remain within their allocated carbon budgets. The Act’s reporting obligations align with the National Greenhouse Gas Emission Reporting Regulations (GN 275 of 3 April 2017), ensuring continuity in environmental monitoring.
The Role of the Government Gazette and Implementation Updates
The Government Gazette will be the key platform through which the President and the Department of Forestry, Fisheries, and the Environment communicate updates on the Act’s implementation. The President’s proclamation, which will bring the Act into full force, is expected in the coming months. Additionally, the Minister will publish sectoral emission targets and carbon budgets through the Gazette, providing a clear timeline for companies to align their operations with the new regulations.
Until these official announcements are made, mining companies must continue to submit their pollution prevention plans and operate in compliance with existing legislation, such as NEMAQA.
Financial and Operational Implications for Mining Companies
The Climate Change Act will have significant financial and operational implications for South African mining companies, many of which are already grappling with the challenges of decarbonizing their operations. The cost of compliance is likely to be substantial, with investments in renewable energy, carbon capture technologies, and improved operational efficiency all necessary to meet the Act’s requirements.
Mining companies may need to:
- Transition to renewable energy sources to reduce their reliance on fossil fuels.
- Adopt carbon capture technologies to mitigate the environmental impact of emissions.
- Improve resource efficiency to reduce waste and limit the environmental footprint of their operations.
Failure to invest in these areas could result in non-compliance, leading to penalties or increased carbon taxes, both of which will have a direct impact on a company’s bottom line.
Sectoral Emission Targets and Future Developments
While the exact sectoral emission targets for the mining sector have yet to be defined, it is expected that they will be stringent, given the industry’s significant contribution to South Africa’s GHG emissions. Mining companies will need to prepare for tighter limits on CO2 emissions, and potentially more government scrutiny over their operations.
The future of mining in South Africa will depend on how well companies can adapt to these changes, which could include:
- Phasing out coal in favour of renewable energy alternatives.
- Enhancing energy efficiency across all stages of the mining process.
- Incorporating new technologies that reduce emissions and improve sustainability.
Preparing for the Future of South African Mining
The Climate Change Act, 2024, represents a significant step in South Africa’s efforts to address climate change, with the mining sector standing to be one of the most affected industries. Mining companies must begin preparing now to align their operations with the Act’s requirements, including carbon budgets, sectoral emission targets, and strict reporting obligations. As South Africa aims to achieve net-zero emissions by 2050, the mining industry will need to innovate and adapt to ensure its long-term sustainability in a low-carbon future.
Mining companies must remain vigilant for further updates in the Government Gazette and closely monitor announcements from the Department of Forestry, Fisheries, and the Environment to ensure they are ready to comply with the new regulations as they come into force. For more information on The Climate Change Act, 2024, you can access the official government guidelines here.
To ensure your mining company complies with the new 2024 Climate Change Act, consider consulting Bishop Fraser Attorneys for expert legal guidance. Our team specialises in environmental law and can guide you through the complexities of carbon budgets, emission targets, and compliance requirements. Reach out today for professional advice on securing your business’s future in a regulated, sustainable industry.
