THE MINISTER OF FORESTRY, FISHERIES AND THE ENVIRONMENT (MINISTER) UPHOLDS SASOL SOUTH AFRICA'S APPEAL AND PERMITS THAT A LOAD-BASED LIMIT BE APPLIED TO REGULATE SULPHUR DIOXIDE EMISSIONS FROM THE BOILERS OF THE SECUNDA OPERATIONS
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The recent decision by the Minister to allow Sasol South Africa Limited to regulate sulphur dioxide emissions on a load-based limit rather than concentration-based limits from April 2025 could have a significant impact on the company's operational flexibility and cost management. Load-based limits provide a cap on the total amount of emissions over a period, which could enable Sasol to optimize operations during periods of high production demand without breaching emission limits, as long as the total emissions stay within the approved load. This could potentially lead to cost savings in terms of reduced need for immediate technological upgrades or process changes that would have been necessary to meet concentration-based limits.
However, this decision also places a spotlight on the company's environmental responsibilities and the scrutiny it faces from both regulators and the public. Investors should monitor how Sasol plans to maintain or reduce overall emissions within the new framework and any investments they make in cleaner technologies. The long-term implications include the potential for improved stakeholder relations if Sasol uses this opportunity to demonstrate environmental leadership, as well as risks associated with potential future regulatory changes or public backlash if improvements to air quality are not perceived.
From an investment perspective, the Minister's decision to uphold Sasol's appeal is a positive development for the company. It provides a clearer regulatory environment for the next five years, which can enhance investor confidence in the stability of Sasol's operations. By mitigating the immediate risk of having to significantly reduce SO2 emissions on a concentration basis, Sasol may avoid substantial capital expenditures in the near term, which could have impacted its financial performance and, consequently, investor returns.
Investors should also consider the potential impact on Sasol's reputation as a sustainable operator and how this might affect its long-term market valuation. As environmental, social and governance (ESG) criteria become increasingly important to investors, Sasol's actions following this decision could influence its attractiveness to sustainability-focused funds and investors. The company's subsequent environmental initiatives and communication strategy will be critical in shaping investor perception.
On 31 July 2023, SSA submitted an appeal to the Minister, as provided for in section 43(1) of the National Environmental Management Act,1998 (Act No. 107 of 1998), to set aside the decision of the NAQO.
On 5 April 2024, the Minister issued her decision, in terms of which she upheld SSA's appeal and set aside the decision of the NAQO. The Minister concluded that SSA's application met all the requirements of Clause 12A, and therefore replaced the NAQO's decision by permitting that load-based limits be applied from 1 April 2025 up to 31 March 2030. Sasol will engage with the Minister to finalise the regulatory requirements for the decision to take full effect, following which our atmospheric emission license will have to be varied accordingly. The decision is available on our website: www.sasol.com.
For further information, please contact:
Sasol Investor Relations,
Tiffany Sydow, VP Investor Relations
Telephone: +27 (0) 71 673 1929
investor.relations@sasol.com
View original content:SOURCE Sasol Limited
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