South Africa’s Carbon Offsets Proposal to Lower Taxes Published

Apr 29, 2014 9:46 am ET

April 29 (Bloomberg) -- South Africa has published proposals for businesses to lower carbon-tax liability, which includes proposalsto reduce greenhouse gas emissions.

Public comments on the carbon offets paper must be submitted by June 30, according to an e-mailed statement by the National Treasury in Pretoria. The carbon offsets program is meant to complement the carbon tax that South Africa plans to introduce from 2016, it said.

The carbon-tax formula allows for a basic tax-free threshold for emissions above a minimum 60 percent, according to the paper. Other elements of the formula include additional transitional allowances, including the carbon offsets, which can increase the threshold by up to 90 percent.

“Projects that generate carbon-offset credits must occur outside the scope of activities that are subject to the carbon tax” in order to prevent double counting of the carbon reduction benefit should an offset project be implemented on an activity that is liable to the carbon tax, according to the paper. South Africa-based credits will only be eligible for offsets.

Projects focused on energy efficiency, public transport, transport energy efficiency, agriculture, forestry and waste, may be eligible for the offsets, which exclude South Africa’s renewable-energy independent power-producer program, according to the Treasury statement.