According to the report, several large industrial companies opposed the proposed tax, arguing that it would be detrimental to growth and would do little to reduce carbon emissions.
“The legislation has not been finalised yet, but we believe it would have a cost of R1bn rand ( $69,3m) to our earnings,” said Stephen Cornell, Sasol’s Joint President and CEO, on Monday.
In December, government published a new version of the draft bill which was tabled for the first time in 2015 and is aimed at aligning the country with the Paris Agreement.
Treasury expects the carbon tax to help reduce emissions, and restructure the economy to be less emissions-intensive. It also hopes the carbon tax will “provide appropriate price signals to help nudge the economy towards a more sustainable growth path”.
The bill is currently before a Parliamentary committee.
“We have been very clear that we are not supportive of the bill… we don’t think that it is good for South Africa because it puts companies who want to invest in SA at a disadvantage,” said Cornell, speaking at the group’s results announcement.
Cornell argued that the proposed tax would affect much-needed capital investment, and was not the right tool for reducing carbon emissions.
He said the company, which is among the country’s top emitters, had engaged with government on the matter and presented proposals which would only allow tax for an amount that exceeds an allowable margin.
“You can’t eliminate carbon emission, what you can eliminate is the growth,” he said.
Other large carbon dioxide emitters such as Eskom, with its fleet of coal-fired power stations, and a range of mining companies will be impacted by the tax.
In the preamble to the bill, meanwhile, Treasury states that South Africa has to “make a contribution to the global effort to stabilise greenhouse gas concentrations”, so that economic and social development can proceed in a sustainable manner”.