JOHANNESBURG- - South African fuel and chemical producer Sasol Ltd has raised its emissions reduction target for 2030 to 30% from 10% as it aims to become a net zero carbon emitter by 2050, its CEO said on Wednesday.
The company has come under pressure from investors and environmentalists to take decisive steps to clean up its heavily polluting plants, often described as amongst Africa's worst greenhouse gas emitters (GHG).
South Africa has been reluctant to give up coal as it provides more than 90,000 jobs by local estimates. But on Monday it set more ambitious climate targets.
Sasol CEO Fleetwood Grobler told Reuters the company intended to cut its GHG emissions from 63.9 million tonnes to about 44.73 million tonnes by 2030, compared with its previous target of 57.5 million tonnes.
"This works on three levers - increase of natural gas as a transition fuel, renewable power source and energy efficiency processes," he said in an interview.
The world's top manufacturer of motor fuel from coal uses around 40 million tonnes of coal annually from its own mines and exports up to 4 million tonnes each year.
Its coal consumption will continue until 2040 but exports will fall to zero by 2030, Grobler said, adding the company would not invest in any new coal mines.
He said the reduction in coal consumption would also lead to some job losses by 2030, without giving details.
Sasol, written off by investors as on the brink of bankruptcy last year, has bounced back thanks to restructuring and higher crude oil prices. Its shares are up by about 900% since March 2020 and its debt has halved.
Sasol will invest up to roughly 20 billion rand ($1.35 billion) annually to achieve the 2030 target, finance chief Paul Victor said in a presentation, adding this would be around 10-15% of total capital expenditure between 2021 and 2030.
While Sasol gave few details on how it would make its sustainability efforts profitable beyond 2030, Grobler said it had made "green" hydrogen - or hydrogen produced using renewable energy - a centre-piece of its plans beyond that date.
The company will form a new division for sustainability, adding to its two main commercial divisions covering energy and chemicals.
Grobler said the division would develop technologies around green hydrogen and use its proprietary Fischer-Tropsch technology - a process to convert a combination of gases into liquid fuels - to manufacture commercially viable sustainable chemicals and fuels.
The new business division will contribute to turnover and profit after 2030, Grobler said.
($1 = 14.7651 rand)
(Reporting by Promit Mukherjee Editing by Louise Heavens and Mark Potter) ((email@example.com; +27 64833 4448;))