On 6 September 2019, the Minister of Environment, Forestry and Fisheries published notice of her intention to amend the National Greenhouse Gas Emission Reporting Regulations (GHG Reporting Regulations).
The GHG Reporting Regulations introduced South Africa’s first attempt at a national system for the transparent reporting of greenhouse gas emissions. The intention is to provide a single national reporting system which will be used predominantly to update and maintain a National Greenhouse Gas Inventory, and will assist South Africa in meeting its international obligations in relation to climate change mitigation.
In addition, the emission data submitted in accordance with the GHG Reporting Regulations will facilitate SARS’ determination of the associated tax liability of a taxpayer as defined under the Carbon Tax Act 15 of 2019. The GHG Reporting Regulations form the basis of a wider complex and often cryptic regulatory framework associated with climate mitigation.
The noteworthy proposed amendments provide as follows:
- Classification of data provider – the proposed amendment seeks to remove the distinction between Category A and Category B data providers and now simply refers to “Data Providers” as a single grouping consisting of any natural or juristic person in operational control of, or conducting any activity that meets the capacity threshold listed in Annexure 1. Notwithstanding the above, the Minister may, by notice, identity additional greenhouse gases, sources and associated data providers and require such data providers to register their emissions within a specified period.
- Registration and reporting of the GHG emissions – the proposed amendments provide that the threshold to trigger registration is applicable at data provider level and that the data provider is required to register all facilities at which Annexure 1 activities are undertaken.
- Change of control notification – data providers will be required to notify the competent authority of any change in respect of registration details within 30 days from the date of such change occurring. The same applies when there is a change of ownership or operational control of a facility. In this regard, it is important to note that operational control does not always mean majority control. Furthermore, this notification is required at facility level and not by the data provider and it would therefore appear that at date of transfer of ownership or operational control, the data provider would cease monitoring and reporting of that particular facility. It is unclear how this will translate in practice.
- Reporting of the GHG emissions – reporting will be required to include GHG emissions from normal operating conditions and upset conditions, including start-up and shut-down and emergency situations, over the reporting period and is required at both data provider and facility level. Proposed amendments to Regulation 9 require that a data provider’s monitoring and reporting must be complete and cover all process, fugitive and combustion emissions from all GHG emission sources and source streams belonging to activities listed in Annexure 1, taking into account the capacity thresholds specific to the different activities.
- Review of emission factor – a welcomed inclusion in the proposed amendments is the proposal to allow data providers an opportunity to request a review of the applicable emission factor where such data provider reasonably believes that an emission factor specified in the Technical Guideline for a particular activity does not fall under the specific conditions of GHG emission.
- Transitional period for tier methods – a data provider may, for a transitional period of up to five years from the date of commencement of the GHG Reporting Regulations, apply either tier 1, 2 or 3 methodology to the activities listed in Annexure 1 and the supporting Technical Guidelines. At the end of the transitional period, the data provider should use tier methods prescribed for the activities listed in Annexure 1 and the Technical Guidelines. Annexure 1 to the GHG Reporting Regulations has been amended to provide the methodologies applicable to the reporting of activities and the transitional arrangement applicability.