Reducing our environmental footprint

 
Reducing greenhouse gas emissions forms an important part of new projects and influences final investment decisions.
 
Case studies
Sasol New Energy: building on a history of innovation
Recognised for our sustainable development reporting and performance
 
 

Responding to the climate change challenge

By its nature the coal-to-liquids process upon which Sasol’s success has been built is a significant contributor of greenhouse gases. We are fully aware of the desire of policymakers around the world to encourage a shift to a low-carbon future, and we understand the immense pressure that we will be facing to adapt to this future. We also recognise, however, that we need to maintain a strong balance sheet to survive the current financial situation and to address other pressing socioeconomic and environmental concerns. The challenge of balancing immediate energy security needs with the desire to move to a low-carbon future is profound. We are committed to using our proven skills – particularly in technology innovation and commercialisation – to contribute to finding solutions to this challenge. 
 

Ambitious targets guide our strategic response 

We have developed a comprehensive climate change response strategy and have adopted ambitious emission reduction targets. Accountability for the strategy rests with the group executive SH&E committee chaired by the chief executive, while execution of the strategy lies with the various business units. During the year additional governance structures have been developed to address greenhouse gas challenges facing the group. The greenhouse gas management committee have met every quarter for the past three years to discuss strategic greenhouse gas issues. The members are also mandated to take decisions on behalf of the group.

A carbon credit management committee has been operational since 2008 that functions as a sub-committee of the greenhouse gas management committee and governs the group carbon portfolio. A climate change task team has recently been constituted by the group executive committee to assess, evaluate and make recommendations on pressing climate change related matters.

Reducing GHG emissions forms part of the risk profile of all new projects exceeding R150 million and thus influences the final investment decision on these major projects. A carbon calculator has been in use for two years to assess the GHG footprint of all new projects to enable project teams to assess the cost of carbon, with the aim of factoring this cost into the overall project cost. The calculator was recently updated to not only use current carbon prices associated with clean development mechanism (CDM) certified emission reductions (CERs) and the emissions trading system (ETS), but also to test the sensitivity of projects against higher carbon prices in the future.
 
"We recognise that without achieving substantial reductions in greenhouse emissions, our coal-to-liquids (CTL) technology, as well as other key elements of our longer-term growth plans, are unlikely to be socially, financially or environmentally acceptable in the medium to long term." 
Pat Davies
 
Additional information on the approaches we are taking to meet our GHG reduction targets is provided in our online sustainable development report, along with a Q&A on climate change with Sasol’s corporate environmental manager, and a comprehensive review of the potential risks and opportunities of climate change for our business.
 
(GRI – EC2, EN5, EN6, EN7, EN17, EN18)
 
In December 2008, the GEC approved a revised GHG policy and environmental roadmap for the next decade, and also agreed to a new set of GHG targets. In terms of these targets, we have committed to reducing the GHG emissions intensity of all our operations by 15% by 2020 on a 2005 baseline, and to reducing our absolute GHG emissions by 20% for all new CTL plants commissioned before 2020, and by 30% for plants commissioned before 2030 (with the average 2005 CTL design as the baseline).

We will strive to meet these targets in many ways, including by: 
promoting energy efficiency measures in our existing plants and processes; 
developing and implementing new energy and carbon-efficient technologies and processes, primarily through the recently established Sasol New Energy; 
investigating opportunities for carbon capture and storage as part of the planned international expansion of our CTL interests; 
actively pursuing mitigation-related financial instruments such as the CDM; 
working with governments and other stakeholders in the countries where we operate to achieve optimum GHG management solutions; and 
engaging our employees on climate change. 
 
As part of the process of annual monitoring and tracking performance against our targets we forecast our emissions to 2050. We will be reviewing our long-term absolute GHG emission ambitions on a regular basis, taking note of developments in the global climate change policy arena, as well as technological advances relating to renewable energy and carbon capture and storage. Progress in meeting our targets is monitored and reported internally on a quarterly basis, both through written board submissions and face-to-face meetings of the Sasol group executive SH&E committee. Performance against these targets and our related energy efficiency commitments form part of a broader suite of environmental performance measures by which personal performance is assessed, annual salary adjustments are made and specific incentive bonuses are based on. The weightings of these different components vary and are dependent on the level of influence of each individual.

We have been reporting externally on our GHG emissions since 1996 through our integrated annual reports and, more recently, through our participation in the Carbon Disclosure Project. We place our GHG emissions figures in context by comparing our performance with that of our peers, as well as with the overall South African emission levels (View table). 
 

Achieving improvements in our GHG emissions intensity 

Our absolute emissions of greenhouse gases globally (measured in CO2 equivalent), have increased from 71,3 million tons (MT) in 2009 to 74,9 Mt in 2010. This figure has been determined using the greenhouse gas reporting protocol of the World Business Council for Sustainable Development and the World Resources Institute. This figure includes the direct emissions associated with our processes including emissions arising from our own tanker fleets (Scope 1 emissions), the indirect emissions associated with our electricity imports (Scope 2), as well as the emissions associated with the transportation of goods and services to and from most of our operations (partial Scope 3). For joint venture projects over which we have operational control, we have included 100% of the GHG emissions, even though we may only have part ownership of the joint venture. Our direct and indirect emissions levels have been independently verified by an external assurance provider.

The increase in emissions this year was accompanied by a significant increase in production levels, at Sasol Synfuels, Sasol Polymers and Sasol Synfuels International. Our emissions intensity for 2010 (measured as carbon dioxide equivalent per ton of production) was 3,05; this compares with 3,24 in 2009 and 3,02 in 2008. The improvement in our GHG intensity is primarily due to the increased production this year at our Oryx GTL operation, which has a lower carbon-intensity. We anticipate further emissions-intensity improvements following the commissioning of the Secunda gas turbine project from June 2010.

Quantitative data on the GHG emissions at each of Sasol's separate business units is provided in our integrated annual review. A high-level summary of these emissions is provided in the table below. 
 
GRI – EN16
 

Sasol GHG emissions

 
Scope 1 emissions
(kilotons CO2e)
Scope 2 emissions
(kilotons CO2e)
Country
2009 2010 2009 2010
South Africa 60 046 61 173 9 409 9 690
Germany 512 538 142 136
USA 673 854 155 236
Others (Oryx GTL included 2010) 536 1 596 34 753
Total Sasol 61 768 64 161 9 739 10 815

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