Scope 3 Emissions Estimator
South Africa

Scope 3 emissions reporting in South Africa: Carbon Tax Act 15 of 2019; National Greenhouse Gas Emission Reporting Regulations (2017); JSE Listings Requirements for climate disclosure; proposed Climate Change Bill

South Africa's carbon reporting framework combines a carbon tax, mandatory GHG reporting, and stock exchange disclosure requirements. The Carbon Tax Act 15 of 2019 imposes a tax on Scope 1 emissions from fossil fuel combustion, industrial processes, and fugitive emissions, with a current effective rate of approximately ZAR 190 per tonne CO2e (after allowances and trade exposure rebates reduce the headline rate of ZAR 190 per tonne). The National Greenhouse Gas Emission Reporting Regulations (published under the National Environmental Management: Air Quality Act) require facilities exceeding specified activity thresholds to report GHG emissions to the DFFE. The JSE Listings Requirements, updated to incorporate King IV governance principles, require listed entities to apply integrated reporting principles that include climate-related disclosures. While South Africa has not adopted CSRD or ISSB standards as mandatory, the JSE Climate Disclosure Guidance (published 2022) recommends TCFD-aligned reporting including Scope 3, and South African subsidiaries of EU parent companies subject to CSRD must provide Scope 3 data for group consolidation. The proposed Climate Change Bill, if enacted, would create a more formal regulatory framework for emissions reduction targets and reporting.

Regulatory context: Department of Forestry, Fisheries and the Environment (DFFE); South African Revenue Service (SARS) for carbon tax; Johannesburg Stock Exchange (JSE) for listed entity disclosure

The DFFE administers the National Greenhouse Gas Emission Reporting Regulations and the South African National Atmospheric Emission Inventory System (NAEIS), which collects facility-level emission data. SARS administers the carbon tax, which requires entities to calculate their tax liability based on Scope 1 emissions using methods prescribed in the Carbon Tax Act schedules. The carbon tax covers emissions from fuel combustion, industrial processes (including cement, iron and steel, glass, ceramics, and chemicals), and fugitive emissions from coal mining and oil and gas. The JSE, as the frontline regulator for listed entities, requires companies to publish an integrated report that includes governance, strategy, and performance indicators related to material sustainability matters. King IV Principle 15 specifically addresses sustainability, and the JSE's Climate Disclosure Guidance recommends that listed entities disclose Scope 1, Scope 2, and material Scope 3 emissions. The National Business Initiative (NBI) in South Africa promotes voluntary carbon disclosure through the CDP South Africa programme, which provides a platform for South African companies to disclose emissions data including Scope 3.

Practical guidance for South Africa

South Africa's grid emission factor is approximately 0.93 kg CO2e per kWh (2023, per Eskom published data and DFFE technical guidelines), one of the highest in the world. This reflects Eskom's generation mix, which is approximately 85% coal-fired. The high grid factor means that any Scope 3 category involving electricity consumption in South Africa produces significantly higher emission estimates than the same activity in most other countries. For example, an electric vehicle commuting in South Africa generates higher lifecycle emissions than a diesel vehicle commuting in France, because the South African grid is so carbon-intensive. For Category 1, South African mining entities (South Africa is a major producer of platinum group metals, gold, coal, iron ore, and manganese) face procurement emissions from explosives, chemicals, and energy-intensive mining consumables. The DFFE's Technical Guidelines for Monitoring, Reporting and Verification of Greenhouse Gas Emissions provide South African emission factors for fuels, electricity, and industrial processes. For transport, South Africa's road freight network carries approximately 86% of inland freight by tonne-km (Department of Transport data), and the road freight emission factors should reflect the predominantly diesel-powered truck fleet. For waste (Category 5), South Africa's limited recycling infrastructure (approximately 10% of municipal waste is recycled) means that landfill emission factors dominate, with associated methane generation.

Audit expectations

South African registered auditors performing assurance over sustainability information follow the Independent Regulatory Board for Auditors (IRBA) standards, which align with ISAE 3000 (Revised) and ISAE 3410. The IRBA published sustainability assurance guidance in 2023. South African assurance providers focus on the accuracy of the grid emission factor applied (Eskom has published varying figures and the DFFE technical guidelines should be the authoritative source), the completeness of carbon tax reporting (which provides a verified Scope 1 baseline), and the consistency of Scope 3 calculations with the entity's financial reporting boundary. For mining entities, assurance providers examine whether the Scope 3 boundary correctly captures contractor emissions (mining operations frequently use large contractor workforces whose transport and accommodation emissions should sit in Category 1 or Category 7). For financial institutions listed on the JSE, PCAF methodology application for Category 15 is examined with attention to the data quality challenges of the South African market, where many listed and unlisted companies do not yet disclose emissions.

South Africa-specific considerations

South Africa's just energy transition (JET) is central to the country's climate strategy. The JET Investment Plan, supported by the International Partners Group (IPG) with USD 8.5 billion in pledged finance, aims to accelerate the retirement of coal-fired power stations and build renewable capacity. As Eskom decommissions coal plants and new renewable energy projects come online through the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), the grid emission factor will decline. However, progress is slow: load shedding (rolling blackouts) persisted through 2023 and into 2024, and the grid factor has not fallen materially in recent years. South African entities should use the current DFFE grid factor and note the expected trajectory in their transition plan disclosures. South Africa's Broad-Based Black Economic Empowerment (B-BBEE) scorecard does not directly address emissions, but enterprise development and supplier development obligations under B-BBEE intersect with Scope 3 data collection by encouraging engagement with local suppliers. The South African wine, fruit, and agricultural export sectors face increasing pressure from EU customers to provide product carbon footprint data under the EU's Carbon Border Adjustment Mechanism (CBAM) and CSRD supply chain requirements, which accelerates Scope 3 data availability for South African exporters.

Common inspection findings

The IRBA's 2024 inspection of sustainability assurance engagements found that assurance providers did not consistently verify the grid emission factor used by South African entities, with some entities using outdated Eskom factors rather than the current DFFE technical guideline factor.

The DFFE's NAEIS review found that approximately 30% of facilities required to report under the National Greenhouse Gas Emission Reporting Regulations had not filed their most recent annual report, creating gaps in the national emission data that downstream entities rely on for Scope 3 estimation.

JSE review of climate disclosures by Top 40 companies found that only 25% of companies that disclosed Scope 3 provided methodology descriptions sufficient for a user to understand how the figures were calculated.

South African assurance providers found that mining companies frequently classified contractor diesel consumption as Scope 1 rather than separating it between Scope 1 (contractor equipment under the mining company's operational control) and Scope 3 Category 1 (contractor-owned and operated equipment), leading to boundary misclassification.

The SARS carbon tax audit programme identified that some entities underreported Scope 1 emissions for carbon tax purposes while reporting higher figures in their sustainability reports, creating an unexplained discrepancy that raises questions about the reliability of both datasets.