Minerals Council South Africa has signalled its support for South Africa’s transition to a low-carbon economy, but is concerned that the immediate risks associated with the country’s more ambitious decarbonisation targets are not being adequately addressed.

CEO Roger Baxter told participants to a virtual Presidential Climate Commission dialogue on the just transition on Thursday that systemic policy interventions, and other support, were required to drive a “risk-managed decarbonisation journey for South Africa”.

He stressed that the domestic mining industry was supportive of implementing measures to transition to a low-carbon economy and was also convinced that green energy could create significant new opportunities, particularly in the area of green hydrogen.

However, the transition had to be grounded in a systemic analysis of the risks and “pragmatism must prevail” so as to minimise disruptions to reliable electricity supply.

“The recently Cabinet approved Nationally Determined Contribution (NDC) provides for a more ambitious target for greenhouse gas (GHG) emission reductions.

“However, the Minerals Council does not see that the increased immediate-term risks related to this ambitious target are being adequately addressed, especially risks to electricity supply,” Baxter said.

Technical, financial and capacity building, together with enabling policy framework, would be required to meet the NDC obligations, he added.

The revised NDC was approved by Cabinet in mid-September and will be deposited with the United Nations Framework Convention on Climate Change ahead of the upcoming COP26 climate talks in Glasgow, Scotland.

South Africa’s 2030 mitigation target range has been updated from the 398 – 614 metric tons of carbon dioxide equivalent (Mt CO2-eq) range pledged in 2015 to a range of 350 – 420 Mt CO2-eq.

The higher figure is said to be in line with the Paris Agreement's commitment to limit the rise in the average global temperature to below 2 °C above pre-industrial levels, while the lower figure is consistent with increasingly assertive moves to cap the rise at below 1.5 °C.

The most recent Intergovernmental Panel on Climate Change report warns that the 1.2 °C threshold has already been breached and that accelerated mitigation action is required this decade for the 1.5 °C target to remain within reach.

“We support the transition to a low-carbon economy and society – contingent on doing it judiciously and systemically,” Baxter said, adding that ensuring that the transition was just for coal workers and communities was dependent on “a compelling plan that understands the socioeconomic implications of the transition”.

There was also a need to acknowledge, he argued, that coal remained a critical component of energy provision and economic development, contributing R80-billion to gross domestic product (GDP) yearly, while sustaining 120 000 jobs and supporting the livelihoods of some 500 000 households.

“Coal-related energy accounts for 45% of employment, 60% of GDP and 70% of export earnings and is hugely important to specific communities, particularly in Mpumalanga,” Baxter said, indicating that this contribution would taper over time.

Speaking on the same platform, Trade & Industrial Policy Strategies senior economist Neva Makgetla said that the shift to new energy sources was inevitable, largely because coal-based electricity technologies were no longer competitive with renewables and because South Africa’s unusually high coal-linked emissions posed real trade and investment risks.

While the transition offered significant new economic opportunities for South Africa, Makgetla said stakeholders in the coal value chain faced substantial costs, particularly as the transition accelerated towards the end of the current decade.

“Coal mining will be the most affected by the decline in coal use, since downstream production can move to other energy sources.

“In this context, many working people and small businesses in the coal-dep...