Understanding the Role of Subsidies in South Africa's Coal-Based Liquid Fuel Sector

This policy brief examines the subsidies provided to the coal-to-liquid (CTL) fuel sector in South Africa, specifically focusing on the company Sasol. It details the financial impact of market price support and carbon tax exemptions, arguing that these measures sustain coal's role in the transport sector and conflict with the country's Paris Agreement commitments.

• In 2019, Sasol received a total of ZAR 6.6 billion (USD 380 million) in support through market price support (MPS) and carbon tax exemptions. The MPS accounts for approximately 5% of the cost of every litre of CTL gasoline sold, meaning motorists effectively pay a subsidy to Sasol during fuel purchases.
• Sasol benefited from an indirect subsidy exceeding ZAR 6.5 billion via an exemption from the Carbon Tax Act 15 of 2019, allowing the company to emit 302 Mt of carbon dioxide equivalent from 2016 to 2020. Additionally, Sasol is expected to under-report emissions until at least 2025 because it fails to meet the Technical Guidelines for Monitoring, Reporting and Verifying of GHGs 2017.
• The CTL industry is a monopoly held by Sasol, which is minority-owned by the South African government. The brief concludes that the continued use of coal-based fuels is incompatible with South Africa's commitments under the Paris Agreement.

APA

Bridle,, A. P. (2020). Understanding the Role of Subsidies in South Africa's Coal-Based Liquid Fuel Sector. International Institute for Sustainable Development. https://www.iisd.org/publications/subsidies-south-africa-coal-based-liquid-fuel-sector

Chicago

Bridle,, Aditya Pant,Richard. Understanding the Role of Subsidies in South Africa's Coal-Based Liquid Fuel Sector. International Institute for Sustainable Development, 2020. https://www.iisd.org/publications/subsidies-south-africa-coal-based-liquid-fuel-sector.

Wikipedia

{{cite report |last1=Bridle, |first1=Aditya Pant,Richard |title=Understanding the Role of Subsidies in South Africa's Coal-Based Liquid Fuel Sector |publisher=International Institute for Sustainable Development |date=13 October 2020 |url=https://www.iisd.org/publications/subsidies-south-africa-coal-based-liquid-fuel-sector |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{bridle2020understanding, author = {Bridle,, Aditya Pant,Richard}, title = {{Understanding the Role of Subsidies in South Africa's Coal-Based Liquid Fuel Sector}}, institution = {International Institute for Sustainable Development}, year = {2020}, month = oct, url = {https://www.iisd.org/publications/subsidies-south-africa-coal-based-liquid-fuel-sector}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }