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

The document examines subsidies for South Africa's coal-to-liquid (CTL) sector, dominated by Sasol. It identifies two primary support mechanisms: market price support via the Basic Fuel Price and exemptions from the Carbon Tax Act 15 of 2019. In 2019, these combined to a total value of ZAR 6.6 billion (USD 380 million). The brief argues that these subsidies increase costs for consumers, contribute to high coal use in transport, and conflict with South Africa'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 carbon tax exemption, based on the Carbon Tax Act 15 of 2019, allowed Sasol to emit 302 Mt of carbon dioxide equivalent between 2016 and 2020 and was valued at over ZAR 6.5 billion. Additionally, Sasol received ZAR 1.552 billion through the Basic Fuel Price.
• The pricing of fuels results in a subsidy to Sasol that accounts for approximately 5% of the cost of each litre of CTL gasoline sold, meaning motorists effectively pay this amount as a subsidy when filling their tanks.
• Sasol is expected to under-report its emissions until at least 2025 because it does not meet the environmental standards set by South Africa's Technical Guidelines for Monitoring, Reporting and Verifying of GHGs 2017.

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} }