Why investing in the planet should be everyone’s business

The devastating effects of the floods in KZN can easily be viewed as one of the most recent indications of climate change, which is becoming ever-more difficult to ignore. The finance sector in South Africa has an important role, in not only helping to alleviate the impact of these events for their clients, but also implementing internal policies to generate profound and lasting solutions to prevent the escalation of climate change.

“Africa faces many socio-economic challenges in which banks must play a progressive role in terms of start-up funding, SMME support and the introduction of innovative practices aligned with new technologies. At Nedbank, we also view climate change as a major investment focus. It’s as much a business reality as it is an environmental challenge. We believe all organisations must place the preservation of the planet higher up on their corporate agenda and instil an internal culture of sustainability, “says Mark Boshoff, Head: Strategic Initiatives and Specialised Asset Finance at Nedbank.

Every large organisation has the means to impact change – with their staff compliment being an obvious asset. These comprise thousands of people for whom sustainable business practices have a direct personal bearing. They have a vested interest in being at the forefront of a company’s mission to make a difference in mitigating climate change. Organisations committed to preserving the planet therefore can and must galvanise their people to view the protection of it as a business imperative.

“Without doubt, the continent faces numerous sustainability challenges. However, if embraced and leveraged, there are ways to help to build a more resilient, equitable and transformed continent. At Nedbank our mission is to create a workforce that is inspired by taking on the challenges faced by our clients, “says Boshoff.

The support and financing of renewable energy sources in Africa is just one example of turning a challenge into an opportunity. Additionally, investors, shareholders, employees, consumers and society are demanding responsible consumption and business practices and the finance sector should not only heed the call but also be a voice for change. This starts within.

Humans and Resources

Now is the time to attract and retain employees aligned to eco-friendly business practices, educate staff to recognise entrepreneurs with innovative sustainability ideas and to implement internal policies that reinforce the all-important mission of putting the planet first.  Sustainability goals must be embraced by Human Resource departments that actively recognise the need to advocate the company’s environmental policies, using their expertise in communicating and instilling behaviours and policies. Meaningful training material and ongoing outreach programmes can further entrench an organisation’s environmental mission – and inspire its people to participate not only as an employee but a proactive global citizen.

Products and the Planet

Shareholders and investors are increasingly considering companies with good track records in ESG as investment targets while disinvesting in those with the reputation of polluters and displaying exploitative strategies. Customers and clients like-wise are considering purchases of services and products from companies with better track records. These factors alone should already inspire the creation of products for the greater good. After all, developing offerings that attract sustainability-conscious clients benefits all. The support of businesses engaged in areas such as eco-packaging, e-waste, renewable energy, regenerative procedures in agriculture, or sustainability-linked financing is a win for the economy and the planet. Fostering a virtuous circle where corporates, communities, small businesses, suppliers, and manufacturers work together for all to benefit, has to be the future.

Home and Away

Whilst initially a necessary measure imposed by the pandemic, the rise of hybrid working environments also presents an opportunity.  Flexible workplace models should be considered in terms of the larger sustainability mission. Employees can massively limit their carbon footprint, reduce traveling times, improve well-being and attract commerce to residential areas to the benefit of communities.

Ultimately, climate change will increasingly impact businesses and supply chains, and most importantly the lives of everyone on the continent. Government’s environmental policies will make a difference but companies can play a vital role in creating change from within. Through planet-first corporate models, the financing of sustainability-focused businesses, the introduction of eco-friendly office practices, including recycling and energy-efficient solutions, employees can be inspired to bring the vision home.  It’s only then, when more people will work together towards the vital collective mission of seeing the planet as our greatest asset., “concluded Boshoff. 

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Wind industry welcomes presidential support of accelerated energy transformation

Responding to President Ramaphosa’s address on the budget vote (9 June 2022), the South African Wind Energy Association (SAWEA) applauds the president’s unequivocal support of the energy sector’s transformation. Furthermore, the industry welcomes the presidency’s clarity of the various reforms.

Fundamentally, the Association points out that the reforms and work underway will deliver a robust, competitive energy sector with multiple generators competing to supply electricity at the lowest cost and selling power directly to customers, which will go a long way in supporting local business and South Africans individually. 

“This is a historical moment in our country as we are recreating not only our energy generation sector, but providing stable foundations for economic growth that is in line with the National Development Plan which sees 2030 as a time when South Africa will reduce its dependency on carbon,” commented Niveshen Govender, SAWEA CEO.

The President clearly outlined the work underway aimed at increasing the energy availability factor (EAF), and closing the electricity gap between generation and demand, which is the root cause of load shedding. These included ensuring that projects from existing procurement programmes, including Bid Window 5 of REIPPPP, reach financial close and are connected to the grid as quickly as possible; accelerating private sector investment in generation capacity under 100 MW; enabling Eskom to purchase surplus power from existing power producers; supporting municipalities to procure power independently; and encouraging households and businesses to invest in small-scale solar power installations and feed energy to the grid, amongst others.

“The interventions are in line with the RE sector advocacy efforts. We believe that this step change that we are experiencing will alleviate the impact of power disruptions and allow us to build back better. While these are ambitious intervention, strong leadership is required to move us forward,” added Govender. 

 The wind sector is excited by Cabinet’s approval of the appointment of Jacob Mbele as the new Director-General (DG) for the Department of Mineral Resources and Energy, as announced by Minister Mondli Gungubele, yesterday. On behalf of its members’ SAWEA welcomes Mbele, who is currently a Deputy Director-General for general programmes and projects at the department, noting that he has been intimately involved with both the Integrated Resource Plan and the procurement of electricity from independent power producers for many years, and wishes him well on his journey to drive and support the energy transition in a fair and equitable manner.

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JSE unveils Sustainability and Climate Disclosure Guidance

The Johannesburg Stock Exchange (JSE) has released its Sustainability and Climate Disclosure Guidance that aims to promote transparency and good governance, and guide listed companies on best practice in environmental, social and governance (ESG) disclosure.

In December 2021, the bourse published the Draft Sustainability and Climate Disclosure Guidance for public comment, which paved the way for a comprehensive consultation process with a broad group of stakeholders including market participants, sustainability specialists and corporate governance bodies.

“The JSE recognises the need to create an enabling environment for better disclosure practices, especially in light of regulation and guidance that are changing rapidly globally. The Sustainability Disclosure Guidance is intended to help companies to align with recent and imminent changes in global standards and international best practice regardless of their experience in sustainability reporting,” says Leila Fourie, Group CEO at the JSE.

The JSE disclosure guidance combines global best practice with local relevance, and simplifies ESG disclosure for both listed and private companies in a context of a myriad of frameworks, guidelines, standards and ratings in the market.

Unpacking the JSE Disclosure Guidance

The Sustainability Disclosure Guidance is an impact-focused, overarching reference document that has a basic set of metrics which are rooted in existing, well-established global standards. It is the blueprint which will assist companies to understand what matters, both on a local and global landscape, and start disclosing.

Parallel to that, is the Climate Disclosure Guidance which specifically aims to clarify current global best practices in climate-related disclosure and provides a step-by-step guide to get issuers started on this journey. The guidance can be a starting point for those tasked with preparing reports with the goal of integrating climate-related information for the first time, while also providing additional resources that can help deepen the journey into climate-related disclosure for those that are more advanced.

“It is our hope that the JSE Disclosure Guidance will help to improve business leadership, performance, accountability and transparency across the entire sustainability ecosystem,” concludes Fourie.

While organisations will have the prerogative to draw fully or in part from the guidance framework to augment their existing disclosure practices, the JSE supports the understanding that the structure of any high-quality disclosure is similar for organisations of all forms and sizes.

The JSE has long championed sustainability as it was the first emerging market – and the first stock exchange globally – to introduce a sustainability index in 2004. It is also a signatory to the United Nations-backed Principles for Responsible Investment and a founding partner of the Sustainable Stock Exchanges Initiative. The JSE is also home to the existing FTSE/JSE Responsible Investment Index and launched the Green Bond Segment in 2017, which was expanded to a fully-fledged Sustainability Segment in 2020.

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Operation Vulindlela: catalyst to NERSA’s approval of 16 more distributed generation projects, streamlining water processes and national rail policy

In the water sector, Operation Vulindlela has been providing technical support to the Department of Water and Sanitation to implement a turnaround plan for the granting of water use licences, with a target to process 80% of all applications within 90 days.

by GCIS Vuk’uzenzele

The South African economy, like any other economy, cannot function, let alone grow, without efficient and competitive network industries. These industries – which include electricity, water, transport and telecommunications – are the arteries through which the oxygen of the economy runs.

Structural problems in these areas have long been cited as some of the main constraints on South Africa’s economic growth. Inefficiency and the high cost of network services are an impediment to doing business in the country.

To address and overcome these challenges, we set up Operation Vulindlela in October 2020 as an initiative of the Presidency and National Treasury to accelerate structural reforms in these network industries. While the responsible government departments and entities drive these reforms, Operation Vulindlela monitors and identifies challenges and blockages. Where needed, it facilitates technical support to departments.

The recent quarterly report outlines the progress made by Operation Vulindlela and the departments responsible for these reforms. Across government, our focus is on reforms that are fundamental and transformative; that reshape the way our economy works.

This includes the auction of high-demand spectrum for mobile telecommunications, which was delayed for more than 10 years and finally completed in March. The release of new spectrum will improve connectivity and bring down broadband costs. 

The establishment of the National Ports Authority as a separate subsidiary of Transnet last year had been delayed for more than 15 years. This was the necessary first step towards enabling private sector participation and increasing the efficiency of our port terminals.

We have also reinstated the Blue Drop, Green Drop and No Drop system for the first time since 2014 to ensure better monitoring of water and wastewater treatment quality. We have published an updated Critical Skills List, also for the first time since 2014.

These are just some examples where, by focusing effort and attention on a limited number of priority reforms, this administration has been able to drive progress.

Through Operation Vulindlela, we have also been able to take a more focused and holistic approach to reforms, ensuring better coordination where multiple departments and entities are involved.

The best example of this is in the energy sector, where a number of important, interconnected reforms are underway to change the way that we generate and consume electricity.

Milestones include the raising of the licensing threshold for new generation projects to 100MW, allowing these projects to connect to the grid and sell power to customers. We have revived the Renewable Energy Independent Power Producer Procurement Programme through the opening of new bid windows.

Changes to the regulations on new generation capacity have allowed municipalities to procure power independently for the first time. And legislative reforms will ultimately give birth to a new competitive electricity market, supported by the publication of the Electricity Regulation Amendment Bill and the work underway to amend the Electricity Pricing Policy.

The process of unbundling Eskom is on track, with the entity meeting its December 2021 deadline for the establishment of a National Transmission Company. By December this year we hope to complete the unbundling of Eskom’s generation and distribution divisions.

The quarterly report highlights a number of other important achievements, as well as areas where intensive work is underway.

In the water sector, Operation Vulindlela has been providing technical support to the Department of Water and Sanitation to implement a turnaround plan for the granting of water use licences, with a target to process 80% of all applications within 90 days.

Work is also underway to establish a National Water Resources Infrastructure Agency that will ensure better management of our national water resources.

In the transport sector, inefficiencies in port and rail have severely affected our ability to export goods. Work is underway to establish partnerships with private sector operators to invest in port infrastructure and improve the management of container terminals at the ports of Durban and Ngqura.

The White Paper on National Rail Policy, which was approved by Cabinet in March, outlines plans to revitalise rail infrastructure and enables third party access to the freight rail network. Transnet Freight Rail is already in the process of making slots available for private rail operators on the network.

A fully operational e-Visa system has been launched in 14 countries, including some of our largest tourist markets. A comprehensive review of the work visa system is also underway to enable us to attract the skills that our economy needs.

These reforms have been made possible due to better collaboration across government behind a shared reform agenda.

We call on business and investors to take advantage of the changes that are underway and turn their pledges and commitments into tangible, job creating investments.

This article was originally published in the GCIS Vuk’uzenzele.

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SA consumers are pivotal in achieving Net Zero

The phrase, “net zero” has become synonymous with global sustainability objectives and the movement to curb climate change. As the world gears up to present a united front against impeding realities like environmental degradation and global warming, many have opinions on the role that the public and private sectors have to play in driving positive change. These efforts, however, need to be supported by civil society, which holds sway over transformation on a grassroots level.

This is according to Mustafa Soylu, chief executive officer of Defy Appliances, who says that South Africans need to make the shift to conscious consumerism, reconsider their buying decisions and opt for brands and products that can visibly demonstrate their commitment to solving climate issues. “For a net-zero economy by 2050, energy efficiency is a must.

Four product groups – electric motors, air conditioners, refrigerators, and lighting – account for 40% of global electricity consumption.

Home appliances consume a significant amount of household energy. This forces us, and our industry, to take a hard look at ourselves, and reconsider our impact on the planet. As climate conditions worsen, people in developing countries will become more and more vulnerable to heat. With growing middle-classes, the demand for cooling products will only increase. Therefore, one of the most critical short-term actions is working on increasing the energy efficiency of the products even in countries where there is no current legislation that forces us to do so.”   

For Soylu, decisive and collective action by all South Africans is the only solution to lowering our country’s carbon footprint and making a meaningful contribution to the global movement against climate change. “As South Africans, we need to avoid relegating the responsibility of fighting global warming to big corporates and the government. Instead, we need to share responsibility and use education and awareness drives to filter these commitments down to consumer level, which is where change can is seen in the most tangible way.”

This change is underway, as a study by Euromonitor International suggests. According to the study, 34% of South African survey respondents indicate that they buy sustainably produced items and 49% make use of sustainable packaging. A further 32% (compared to 24% globally) say that they make donations to non-profit organisations that support and protect the environment. This shift to conscious consumerism, is a trend that is slowly but surely taking hold in South Africa, with over 70% of respondents indicating that they try to make a positive impact on the environment by recycling, saving water and reducing the use of single-use plastic.

As Soylu argues, taking actions that protect the environment have a dual benefit for South Africans who face unique energy challenges. Load shedding – which was implemented during the later months of 2007 – is still a reality more than a decade later. It is becoming clearer that energy-efficiency and the more responsible use of energy is a necessity for the millions of South Africans whose daily lives are affected in a very direct way by electricity blackouts. Furthermore, Defy is committed to helping consumers by reducing their utility bills and aiding the government’s decarbonisation goals.

“To this end, as Euromonitor International reports, almost half of South Africans are earnestly pursuing ways to reduce their energy consumption and use more efficient products. For Defy Appliances, insights such as these informed the design and development of the Defy Solar Hybrid range of household appliances that can offer an up to 35% reduction in energy use.”

The range is the materialisation of Defy’s commitment as a company to help consumers to play their part in working towards net zero, says Soylu.

“We are committed to mitigating the impact of climate change by ensuring that our production processes, our manufacturing methods and the materials we use are carbon efficient. This sustainable approach will underlie everything we do as a group moving forward. As we take action that is reflective of this commitment, we encourage consumers to vote with their money by making conscious purchasing decisions that will contribute towards a more sustainable future,” he concludes.

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Energy regulator to oppose court application to review Karpowership licences

The National Energy Regulator of SA has told The Green Connection that it will oppose its court application to review and set aside the decision to grant three electricity generation licences to Karpowership South Africa.

By Tembile Sgqolana

23 May 2022  

The National Energy Regulator of South Africa (Nersa) last week notified The Green Connection that it will oppose the sustainable development NGO’s court application to review and set aside the decision to grant three electricity generation licences to Karpowership South Africa.

This was on the same day that the Minister of Mineral Resources and Energy, Gwede Mantashe, laid out the department’s budget for the 2022/23 financial year.

Minister of Mineral Resources and Energy Gwede Mantashe. (Photo: Gallo Images / Felix Dlangamandla)

In September 2021, Nersa approved the Karpowership licences despite the Department of Forestry, Fisheries and Environment’s refusal to grant environmental authorisation. 

Nersa ignored the public outcry, particularly from small-scale fishing communities around Saldanha Bay in the Western Cape, Ngqurha (Coega) in the Eastern Cape and Richards Bay in KwaZulu-Natal, where these floating power plants were to be anchored.

Small-scale fishers are mainly concerned about the irreparable damage that powerships and other oil and gas projects could cause to marine life and ecosystems, thereby affecting their livelihoods.

The Green Connection’s Liz McDaid said that as Africa’s largest carbon emitter, South Africa not only lacked the vision needed to address the climate crisis, but the government seemed to oppose the president’s goals for a just transition from fossil fuels to clean energy. 

“While we welcome the increased commitment to renewable energy, there are still too many projects that do not appear to be in the public interest, such as Karpowerships. 

“Over the past year or so, several coastal communities around the country have expressed their dissatisfaction with oil and gas exploration. And the December 2021 court judgment against Shell found that it was wholly insufficient to merely consult traditional leaders. 

“We must have proper, meaningful public participation with all who may be affected,” she said.

McDaid said The Green Connection has been opposing powerships since early 2021.

“First were the flawed environmental authorisation processes, then came the electricity generation licence application process, which Nersa still approved despite Karpowership being refused an environmental authorisation.

“It was because of these flawed processes that The Green Connection filed its papers (on 25 April 2022) to review the Nersa generation licence. The organisation now waits for Nersa to provide all the records that justifies its decision to grant the licences. 

“The deadline for Nersa to provide these records was 20 May 2022, but Nersa requested an extension,” she said.

McDaid said both the Department of Mineral Resources and Energy and Nersa are supposed to make decisions in the public’s best interest and seek to address the climate crisis with a view to a just transition to renewable energy. 

“The minister harps on sector plans like the gas plan and plans for nuclear, but fails to provide any clarity about holistic and socially inclusive energy planning. 

“When can the country expect to see the updated integrated resource plan instead of this piecemeal approach that, to date, appears set to undermine our climate commitments?

“What we need is a bolder vision for our future energy plans. We need a roadmap – specifically the integrated energy plan as outlined in section 6 of the National Energy Act – to lead us out of the energy crisis we are in. 

“But so far, we do not see the minister showing the necessary leadership to drive such a process, which would require meaningful input from all South Africans,” McDaid said.

She added that South Africans are united in their frustration with load shedding. 

“What we should see is more effort to address this, from the grassroots. For example, the government could give small businesses and homes a tax break for putting up solar systems – it should also expedite the process to allow such generators to feed into the grid,” she said. 

The Green Connection said in a statement on Monday that it remains concerned about Energy Minister Gwede Mantashe’s ongoing “divisive comments” about those who are anti fossil fuel. 

“With the country facing a climate emergency, it seems bizarre for a government minister to deride and oppose people’s efforts to combat climate change. 

“In addition, the minister continues to push for the very fuels which will make things worse, and which will likely lead to more suffering for people on the ground,” read the statement.

The Green Connection’s community outreach coordinator, Neville van Rooy, said: “Is this now officially an onslaught from the government and industry, to bully communities and violate their rights to a healthy and clean environment? 

“Even after two court interdicts that stopped seismic surveys – part of the initial phase to search for oil and gas – demonstrated the people’s opposition, the government is still forcefully pushing for these fossil fuels. 

“In our view, communities want to phase out oil and gas, and move to the just transition, but, instead, more oil and gas projects are popping up without proper, meaningful community participation.”

He said the Department of Mineral Resources and Energy’s agenda seems to ignore climate crises. 

“The recent floods in KZN should be a clear warning that this is no longer a distant phenomenon. Climate change is at our doorstep, and we cannot afford to be stranded with fossil fuel decisions any longer. 

“We have a right to choose the energy future we want for our country, and the future we want is renewable,” said Van Rooy.

“It would be un-African of us to just sit by and let the government’s sluggish climate response potentially ruin the country’s chance for a just transition. 

“Not only will we have to survive more floods and droughts, but our people are missing out on the many accessible socioeconomic opportunities that will come as part of the transition, if it is done in partnership with the people.”

On Friday, 20 May, Eskom gave notice that it would not oppose The Green Connection’s application and would abide by the court’s decision. 

McDaid said that, to the best of their knowledge, Eskom had not signed the power purchase agreement with Karpowership. To them, this indicates that Eskom might also have concerns about the impact of potentially higher electricity prices if the powership deal goes ahead. 

Courtesy of Daily Maverick

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SA wind energy industry reaffirms commitment to energy security

May 2022

As the country bears the weight of continued load shedding, the South African Wind Energy Association (SAWEA), has reaffirmed the sector’s role in delivering energy security. This is despite the recent announcement of delays of two renewable energy procurement rounds meant to unlock and deliver new generation capacity.

Responding to a recent statement issued by the head of South Africa’s Independent Power Producer Office (IPPO), Mr Bernard Magoro, the Association says it is encouraged by the leadership demonstrated and the sentiments of stakeholder alignment. SAWEA has been lobbying for increased stakeholder engagement and alignment, as it is the key to establishing the foundation for accelerated procurement and unblocking hurdles.

“We continue to build relationships with the key stakeholders including the IPPO, Eskom, Department of Trade Industry and Competition (dtic) and Department of Mineral Resources and Energy (DMRE) and are assured that the stakeholders are having the right conversations to support the procurement process with the aim of more megawatts on the grid as quickly as possible,” said Niveshen Govender, CEO of SAWEA.

The South African wind power sector is robust and has the appetite, ability and capacity to deliver (at least) 1.6GW of new power generation per year, for the next decade. This has been demonstrated by exceedingly high levels of bid submissions for BW5 and reaffirmed by Magoro this week, who stated his confidence in the market appetite for the Renewable Energy Independent Power Producer Procurement Programme’s BW6. He noted that more than 50 potential bidders have acquired the bid documentation, and furthermore that the National Treasury has confirmed that the programme will continue to be granted government guarantee.

The Association points out that the sheer scale of these mega-projects, valued each on average over R1.5billion investment, require a slew of work to bring them to commercial closure. Commercial close is when the project agreements are signed, which is basically the achievement of the necessary power purchase agreement to sell electricity with Eskom and the implementation agreement with Government, which determines how Independent Power Producers (IPPs) will implement their projects and what economic development goals will be achieved.

“We are dealing with billion-rand projects that require in excess of sixty applications, licences, permit agreements, regulatory compliance processes, which demonstrates the importance of cross-sector stakeholder relations and supportive policies,” added Govender.

Citing the recent procurement round delay from end-April, the Association has pointed out that the failure to secure final budget quotes from Eskom for grid connection, shouldn’t be singled out as the only reason for postponements. It is suggested that a six to 12-month timeframe may be more realistic to navigate the cumbersome processes.

“I estimate around 12 months is a more realistic timeframe, which should be incorporated into the procurement process to reduce the public perception of delays, in addition to increased stakeholder engagement to resolve this,” reiterated Govender.

When asked about the comments made by the African Independent Power Producers Association Chairperson, SAWEA, has stated that it prefers to engage key stakeholders directly and work through the challenges in a constructive manner.

“South Africa can address fundamental challenges of energy access, energy security and climate change through the deployment of renewable energy. For this to happen, it is best that all stakeholders move towards working better together to achieve this,” concluded Govender.

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It’s getting worse: June petrol price nearing R4-per-litre increase

The latest projections for the June petrol price are barely believable, and motorists are set for a struggle.

As South Africa continues on its terrifying trajectory towards a sky-high June petrol price, the last two revisions of what motorists can expect to pay have increased further – to the point where a R4-per-litre rise is not out of the question.

June petrol price: an absolute shocker

The shock figures are in line with the latest projections from the Central Energy Fund. They estimate that the cost of some fuels will now rise by a punishing R2.25. That on its own is troubling enough – but the suspension on the General Fuel Levy is set to run out next week.

That act of government intervention had kept an additional R1.50 off the petrol price. However, it’s expected to snap back into action at the start of June – meaning some motorists could end up paying R3.75 MORE for a litre of fuel.

The situation continues to spiral out of control, and if no state help is forthcoming, South Africans could be confronted with prices of R26p/l at the pumps in June. It’s quite simply unsustainable, and the DA Shadow

Minister for Energy knows that all too well.

Failure to plan

Kevin Mileham has reprimanded Ministers Gwede Mantashe and Enoch Godongwana ‘for failing to plan for a fuel shock’ they knew was coming. He accused the pair of ignoring the plight of the people, and called for an extension on the General Fuel Levy suspension.

“The admission by the Minister of Mineral Resources and Energy, Gwede Mantashe, that the general fuel levy cut won’t be extended beyond the end of May, is an unacceptable dereliction of duty and a failure to enact a sustainable rationalisation of the composition of the fuel price.”

“If projections by players in the fuel industry hold, the petrol price increase will lead to an upward pressure on inflation, hitting consumers directly through rising transport and food costs. South Africans are already struggling to make ends meet and unemployment is soaring.”

Article courtesy The South African
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ICMM Members Commit to Consistent Reporting on Social and Economic Contribution

The International Council on Mining and Metals (ICMM) has published a new Social and Economic Reporting Framework which commits members to report against a set of social and economic indicators, empowering stakeholders such as communities, governments, and investors to assess the contribution of mining to social and economic development more easily.   

ICMM members, representing around a third of the industry, have committed to report on eight key indicators which includes country by country tax reporting on revenues, payment and tax, workforce composition, pay equality, wage level, training provided, local procurement, education and skills programmes, and capacity building.

This disclosure will also help companies to better assess and strengthen the delivery of their social and economic contribution programmes, and provide a clearer overview of the contribution mining is making to economic growth, employment, skills, health, education and a range of other development opportunities in the regions close to their operations. 

Rohitesh Dhawan, CEO, ICMM said: “Mining plays a significant role in driving social and economic development in the regions where it takes place. What has been missing until now is a consistent set of indicators that measure these contributions, like for like. ICMM’s Social and Economic Reporting Framework raises the bar in several areas including the disaggregation of data by gender and ethnicity, and reporting of employee wages compared to the local living wage. This commitment represents a major step forward, and I encourage all mining companies to adopt the Framework to provide a more complete picture of the industry’s social and economic contribution and collectively identify areas for improvement. 

We recognise that there is still more to do to measure, prevent and manage the negative impacts mining activities can have on local communities. We will continue to work closely with stakeholders to assess the potential evolution of the Framework so that we can build on the data already being provided to give a clear picture of our members’ performance.”

Chris Griffith, CEO Gold Fields, said: “Along with other ICMM members, Gold Fields was actively involved in the development of the Framework as we believe the reporting of social and economic indicators is critical to help provide a clear picture of the contribution we make. This transparency is key to winning the trust of our stakeholders, particularly host communities and governments. We are already aligned with several of the indicators – as reported in our annual Report to Stakeholders – and are working towards disclosure against the full Framework.”

The Framework was developed through an assessment of existing reporting frameworks and company practices relating to social and economic contribution. It was informed by consultation with a range of external stakeholders including investors, civil society, customers, and international organisations and tested at sites by ICMM members. It builds on existing frameworks such as the Global Reporting Initiative (GRI), thereby ensuring a streamlined approach to reporting. Where indicators were not available in existing frameworks, new ones have been developed and included in the Framework.  

ICMM members have already started the work needed to incorporate these indicators into their reporting systems and are committed to disclose against the indicators by 2024, except for country-by-country tax, for which reporting is expected from 2025.

Rohitesh Dhawan will be moderating a panel at African Mining Indaba, where ICMM Council member Chris Griffith (Gold Fields CEO) and Anglo American South Africa Chair Nolitha Fakude will discuss mining’s overall contribution to society, the importance of consistent reporting on contribution, and how transparent reporting will help to build trust across the sector.

  • You can view the Social and Economic Reporting Framework and Guidance here

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Minister Blade Nzimande: Launch of Hydrogen Society Roadmap

Address by the Minister of Higher Education, Science and Innovation, Dr Blade Nzimande, on the occasion of the launch of the Hydrogen Society Roadmap

17 Feb 2022

I am grateful to be joining you this afternoon on this occasion of the launch of the Hydrogen Society Roadmap (HSRM).

We are holding this important launch of the Hydrogen Society Roadmap at a time when our country and the world is faced with the fourfold challenges of:

  1. The Covid 19 pandemic;
  2. Persisting and stubborn economic crises, and its associated challenges of poverty, inequality and unemployment;
  3. The crises facing poor families, households and communities to make ends meet – the struggle to sustain life and livelihoods; and
  4. Climate Change.
     

This launch also takes place at a time when South Africa is also focusing on extraordinary measures of economic recovery and reconstruction to achieve inclusive growth following the devastation caused by Covid-19 and economic challenges.

Indeed the depth of the crisis caused by the Covid-19 pandemic has sharpened our resolve to rededicate ourselves to address our massive socio-economic challenges.

At the centre of our Reconstruction and Recovery Plan (ERRP), is the creation of sustainable jobs and livelihoods.

Our determination is to get our people back into the jobs they lost during the pandemic and  create new ones. This means that we want to broaden the participation of all South African’s in an inclusive economic.

As government we are determined to create an environment which encourages investment, the  creation of employment and skills needed for our economic growth and development.

I therefore view the launch of the Hydrogen Society Roadmap as amongst the critical and leading instruments towards our economic recovery and developing our economy.

Ladies and gentlemen

The South African hydrogen economy journey started in 2007 when Cabinet approved the national hydrogen and fuel cells research, development and innovation (RDI) Strategy (HySA Strategy).

The HySA Strategy is currently implemented by the Department of Science and Innovation (DSI) through the 15-year Hydrogen South Africa Programme.

The HySA Programme, now on its 13th year of implementation, has made significant contribution towards the creation of a Hydrogen Economy in South Africa.

This has been achieved through the creation of knowledge, technological expertise and human resources development.

During the 2019/20 financial year, the HySA Programme underwent its second five-year review, which recommended the development of an overarching Hydrogen Society Roadmap (HSRM).

In September 2020, the DSI initiated a process to develop the HSRM in collaboration with key relevant departments as well as the private sector and civil society through a consultative process, which culminated in a stakeholder collaboration workshop on 14 July 2021.

This led to the Cabinet approval of the Hydrogen Society Roadmap on the 14th  September 2021.

The implementation of this Roadmap is expected to support inclusive growth and assist government to reduce unemployment, poverty and inequality.

In South Africa, hydrogen is extensively used in the chemical and fuel-refining sectors, but it is currently produced mainly from non-renewable sources such as coal and natural gas.

Was is concerning is that hydrogen and fuel cell technologies (HFCT) are currently used in very few industrial activities in our country.

However, the use of hydrogen and fuel cell technologies is likely to expand significantly in future, driven by both mobile and stationary applications, as well as its use in industrial processes such as ammonia and steel production.

In addition to the renewable resources and available land to build the required renewable energy plants, South Africa has comparative advantage in that the country is home to 75% of the world reserves of the platinum group metals (PGMs).

The PGMs such as platinum, ruthenium and iridium are key components in fuel cell catalysts and electrolysers for green hydrogen production.

In addition, South Africa has a unique and patented Fischer-Tropsch process owned by Sasol, which gives South Africa a competitive edge in the production of liquid fuels based on the hydrogen production route.

Opportunities exist for direct replacement of the hydrogen from natural gas by green hydrogen.

For example, with the existing gas-to-liquids facility operated by PetroSA, as well as the existing port infrastructure located from the east coast all the way to the west cost of the country, this basic infrastructure can be modified and expanded to supply hydrogen into the domestic and international markets.

South Africa currently produces 2% of the global demand for hydrogen, mostly made from natural gas by Sasol.

Given the projected global demand for green hydrogen, South Africa has the opportunity to convert its current global supply to green hydrogen and the potential to increase the country’s share of the green hydrogen market.

As a country, South Africa has good trading relations with the countries that are looking to import green hydrogen.

These include the European Union broadly and Germany in particular, Japan, South Korea and China.

According to the recently launched South African Hydrogen Valley Feasibility Study Report, the average cost of green hydrogen will be around USD 4 (EUR 3.5) per kg by 2030 along the Platinum Valley corridor, representing a green premium of USD2-2.5 per kg above grey hydrogen, produced from natural gas.

The Platinum Valley Corridor starts from Anglo American Platinum’s Mogalakwena Mine in Limpopo, through Pretoria and Johannesburg down to Durban, passing through the N1 and N3.

It is expected that by implementing the catalytic projects identified in the South African Hydrogen Valley Feasibility Study Report, the green premium could be lowered to enable green hydrogen to be at parity with grey hydrogen.

Ladies and gentlemen

As part of developing the Roadmap, the DSI, in collaboration with other stakeholders, identified projects or studies that will be implemented in parallel to kick-start the development of the Hydrogen industry in South Africa.

For instance, the Department of Trade, Industry and Competition, is developing a National Green Hydrogen Commercialisation Strategy that will give confidence to investors that South Africa is a destination for investment in the Hydrogen Economy.

The following catalytic projects have been identified as key to kick starting the implementation of the Roadmap:

Platinum Valley

The Department’s hydrogen valley partnership with Anglo American, Bambili Energy and ENGIE is an example of leveraging investments made in the Hydrogen South Africa Programme to create mechanisms for the uptake of publicly financed intellectual property and supporting small, medium and micro enterprises (SMMEs).

Estimates place the potential gross domestic product (GDP) impact, direct and indirect, of H2 projects in the country at $3,9 billion to $8,8 billion, if the full vision of the hydrogen valley is realised.

This project could bring an additional $900 million to $2,000 million in tax revenue into South Africa’s coffers by 2050.

Limpopo Science and Technology Park

The DSI commissioned a joint study with the Limpopo Economic Development Agency on the role of hydrogen and hydrogen fuel cells to power data centres that will be installed at the Limpopo Science and Technology Park.

While the use of diesel generators to power data centres is the standard practice, recently the move towards stationary fuel cells for uninterrupted power supply has gained momentum.

The CoalCO2-X RDI Programme

The CoalCO2-X Programme aims to use renewable or green hydrogen and pollutants (CO2, SOx, NOx etc.) contained in the flue gas from coal fired boilers to make value added products that can support the transition to a decarbonized energy system and assist the country to meet its emission reduction goals while also ensuring a Just Energy Transition.

To date, the DSI has provided R50 million to kick-start the CoalCO2-X RDI Programme and is looking to demonstrate the flue gas conversion technology at a cement plant in collaboration with PPC Cement.

To ensure that the implementation of the HSRM is successful, a Monitoring, Evaluation, and Learning Framework (MEL) has been drafted to provide the means to monitor progress and evaluate the performance.

A detailed Monitoring, Evaluation, and Learning Framework (MEL) framework document, together with some baseline data is expected to be completed by April 2022.

South Africa’s geography with wide open spaces coupled with port infrastructure creates the environment for ensuring that hydrogen and ammonia produced with renewables can be readily shipped to other countries in the world.

The HSRM identifies the following high-level outcomes for the South African Hydrogen Economy:

The creation of an export market for green hydrogen and ammonia

In this regard, a key outcome of the HSRM is the creation of an export market for the South African green hydrogen.

The demand from international buyers for the South African green hydrogen will be determined by cost competitiveness, confidence in the South African hydrogen market, and an enabling export infrastructure;

The green and enhanced power and buildings sector

In this regard, hydrogen is capable of contributing to the achievement of a decarbonised and enhanced power sector by providing renewable energy storage and green power to the main electricity grid, thus improving overall grid stability;

The decarbonisation of Heavy-Duty Transport

In this regard, the HSRM will support the objective of decarbonisation of transport by 2050.

The initial focus will be road transport, which accounts for the majority of transport emissions and where the technology is most developed to use Hydrogen to power heavy duty vehicles.

Rail, shipping and aviation will be addressed in the medium term (2025-2030);

The decarbonisation of Energy Intensive Industry

In this regard, the HSRM will support the objective of decarbonisation of industry by 2050.

The initial focus will be on the steel, mining, chemicals, refineries and cement sectors, which together account for the majority of energy used in industry; and

Local manufacturing of hydrogen products and fuel cell components

In this regard, the establishment of a manufacturing sector for Hydrogen products and components is a key outcome for the HSRM.

The manufacturing sector will support the transition from internal combustion engine (ICE) to electric vehicle (EV) manufacturing, produce products for export and will contribute to the beneficiation of South African minerals through the supply of value added components in the Hydrogen value chain.

In addition, the HSRM identifies the production, storage and distribution of hydrogen; RDI as well as gender, equality and social inclusion (GESI) as important cross-cutters within the Hydrogen Economy.

More importantly, these are areas where potential interfaces could be explored to create a truly inclusive Hydrogen Economy for the country.

Next Steps

Today we are here to celebrate, but with an understanding that hard work is ahead of us.

The DG’s in his presentation will highlight the 70 key actions that have been identified by stakeholders.

The HSRM articulates the roles that all these stakeholders (comprising of government, industry, academia and civil society) are expected to play in implementing the action plan.

Stakeholders will be expected to mobilise resources through partnerships and create an ecosystem where investment decisions can be made to unlock the socio-economic benefits that can accrue through the integration of hydrogen and fuel cell technologies in various sectors of the economy.

Given the complex and extensive requirements for the implementation the HSRM, it will be enabled by a team of experts, from across industry, SOEs, academia and government, that have been assembled to ensure that the identified 70 key actions are completed as soon as possible to create an enabling environment for investment.

We have also established a partnership with the United Nation Industrial Development Organisation (UNIDO) that will assist with creating an agile, effective and relevant National Hydrogen Energy Centre that will institutionalise the implementation of the Hydrogen Society Roadmap.  

UNIDO has been working with governments, business associations and companies to solve industrial problems for more than 50 years, earning a reputation as the world’s most experienced industrial problem solver, as well as a neutral and honest broker in promoting cooperation and coordination among countries around the world.

UNIDO is fully committed to contributing to the achievement of the Sustainable Development Goals (SDGs), in particular Goal 9 focusing on Infrastructure, Industry and Innovation.

As South Africa we joined UNIDO as a Member State on 24 October 2000.    

Ladies and gentlemen

In conclusion, if South Africa fully implements the HSRM, within a few years, at least 20 000 new jobs will be created in South Africa as part of the adoption of the Hydrogen economy.

My Department of Science and Innovation and Department of Higher Education and Training are working together to scale up training and reskilling programmes across South Africa to ensure that the requisite infrastructure, curriculum and lecturers are in place to educate the next generation of employees and participants for the hydrogen economy.

The Department of Science and Innovation is working with the private sector partners to develop an updated Research Development and Innovation Strategy that will support the aspirations to have a vibrant domestic manufacturing sector for fuel cell components.

A number of MoUs have been signed with leading energy companies both in the private and State-owned to co-fund and co-create future technologies for the hydrogen economy.

In closing, let me first thank the Director General, Dr Phil Mjwara for ensuring that the officials of the Department as well as the other members of the National System of Innovation have worked to ensure the successful implementation of the HySA Strategy

They have ensured that through the Hydrogen Society Roadmap we have levelled up our efforts to the full participation of private sector, other government departments and civil society and academia in securing a clean, affordable and sustainable energy future for South Africa.

I want to express my gratitude to all of you.

I want to assure you today that government will continue to create an enabling environment for the implementation of the roadmap.

We will also focus on more attention on shovel ready projects such as those identified with the Platinum Valley Initiative.  

We have a huge task ahead, but the level of commitment that you have thus far demonstrated indicates that there is no challenge which is unsurmountable.

As the Minister of Higher Education, Science and Innovation, I therefore launch the Hydrogen Society Raodmap.

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