Chemicals and energy group Sasol has announced a material acceleration of its decarbonisation plans, confirming that it will reduce greenhouse gas (GHG) emissions by 30% by 2030 rather than by the much-criticised 10% level to which it initially committed.
CEO Fleetwood Grobler has also pledged that the group will transition to net-zero emissions by 2050 and has confirmed that Sasol will not invest in any new coal reserves.
The JSE-listed group will invest between R15-billion and R25-billion by the end of the decade to meet the new target, which involves reducing Scope 1 (direct) and Scope 2 (derived from the consumption of purchased electricity, steam, heat and cooling) emissions from a 2017 baseline of 63.9-million carbon dioxide equivalent (CO2e) tons to 44.7-million CO2e tons.
The target represents a 19-million CO2e tons reduction in emissions over the period and is a tripling of Sasol’s previous target, which aimed to reduce GHG emissions to 57.5-million CO2e tons by the end of the decade.
In addition, Sasol has pledged to reduce Scope 3 emissions (indirect emissions that occur in its value chain) from a 2019 baseline of 35.6-million CO2e tons to 28.5-million CO2e tons by 2030.
Much of the decarbonisation plan to 2030 will involve replacing coal in its value chain with natural gas, starting with another 40 PJ/y to 60 PJ/y by 2030.
“While our end-state is a move to green hydrogen and sustainable carbon feedstocks, we believe gas has an important role to play in our mix, as a transition feedstock, with an inherent but significantly lower GHG footprint versus coal,” Grobler says.
COAL-TO-GAS SHIFT
Sasol is considering new sources of gas, including securing additional resource from the Pande and Temane gasfields in southern Mozambique, as well as importing liquefied natural gas (LNG) through Motola, in Maputo, and Richards Bay, in KwaZulu-Natal. Grobler reports that negotiations are at an advanced stage for the importation of LNG through a proposed import terminal at Motola.
Much of the capital investment to 2030 will, thus, be directed towards a gas reforming technology that will enable Sasol to inject the gas into its processes, with the balance flowing towards energy efficiency projects, mostly at Secunda.
CFO Paul Victor says most of the investments will take place between 2026 and 2028 and will be easily absorbed into the group’s anticipated yearly capital investments profile of between R20-billion and R25-billion.
Victor does not anticipate any coal-related impairments, despite the falling consumption profile, stating that it has sufficient reserves to 2043.
The group will also procure 1 200 MW of renewable electricity from independent power producers by 2030, the first 600 MW of which in partnership with Air Liquide.
GREEN HYDROGEN
Grobler again stressed the leadership role that Sasol intended playing in the development of Southern Africa’s green hydrogen economy but indicated that the bulk of the investment would arise only after 2030.
A new business, called Sasol ecoFT, is being established, however, to lead the development of sustainable solutions that leverage the group’s Fischer Tropsch (FT) technology.
“We believe that FT is uniquely positioned to thrive in a fossil fuel-free world.
“One of the first applications for the technology is likely to be sustainable aviation fuels.”
Sasol is partnering with Enertrag, Afrox and Navitas on a sustainable aviation fuel initiative, involving the deployment of green hydrogen, wind and solar assets at Secunda, in Mpumalanga, to produce carbon-neutral jet fuel.
Currently, Sasol produces certified aviation fuel from coal.
“South Africa has fantastic potential for renewables and low-cost green hydrogen production, which positions us well for export opportunities,” Grobler says, indicating that its primary objective is to shift from grey to green hydrogen rather than to pursue so-called blue hydrogen, which involves adding carbon capture to grey hydrogen production processes.
Sasol produces 2.3-million tons of grey hydrogen from coal yearly to manufacture synthetic fuels, making Secunda the largest point source of carbon-dioxide emissions in the world.
The group is also establishing a dedicated Just Transition Office to “anticipate and mitigate” the impacts on workers and communities as it transitions away from coal.
“While the workforce impact is likely to be largely after 2030, this needs to be anticipated now.
“We are committed to a just transition [and] we will continue to actively engage and partner with our local communities and various stakeholders in Southern Africa, to support these objectives – including the Industrial Development Corporation and the regulator,” Grobler says.
SOURCE: oglinks.news