global partner of choice in the green economy

The United Nations Environment Programme (UNEP) defined the Green Economy as the low carbon, resource efficient and socially inclusive economy.

The Green Economy cuts through all the industries. Green Building Design Group works with clients across the various industry value chains in helping them achieve their sustainability and climate change mitigation goals.

The Carbon Tax is a new tax in response to climate change, which is aimed at reducing greenhouse gas (GHG) emissions in a sustainable, cost effective and affordable manner. Carbon Tax gives effect to the polluter-pays-principle and helps to ensure that firms and consumers take the negative adverse costs (externalities) of climate change into account in their future production, consumption and investment decisions.

The 12L Tax incentive, according to Income Tax Act, 1962 (Act No. 58 of 1962) provides an allowance for businesses to implement energy efficiency savings. The savings allow for tax deduction of 95c/kwh saved on energy consumption. The incentive allows tax deduction for all energy carriers (not just electricity) with the exception of renewable energy sources.

The 12I Tax Incentive is designed to support Greenfield investments (i.e. new industrial projects that utilise only new and unused manufacturing assets), as well as Brownfield investments (i.e. expansions or upgrades of existing industrial projects).

Note: The window period for receiving applications under this programme has been extended initially from 31 December 2015 to 31 December 2017 and subsequently to 31 March 2020.

The Carbon Tax Act of 2019 came into effect on 1 June 2019. It will be administered and collected by
SARS.
The Carbon Tax is assessed, collected and enforced as an environmental levy in terms of the
Customs and Excise Act, 1964, read with the relevant provisions of the Carbon Tax Act, 2019.

The Carbon Tax is imposed on entities in the country that operate emissions generation facilities at a
combined installed capacity equal to or above the carbon tax threshold. To this extent, the following sectors are the most affected by the implementation of a carbon tax: the energy sector, the manufacturing and construction industry, the mining sector, various mineral industries (cement, glass and lime production), the chemical industry, and the metal industry (iron and steel, aluminium) to name a few. 

The carbon dioxide equivalent of greenhouse gas emissions as defined in the Carbon Tax Act, 2019,
are subject to Carbon Tax

The emissions that are subject to Carbon Tax are determined in accordance with either an approved
reporting methodology of the Department of Environment, Forestry and Fisheries (DEFF), or the
prescribed formulas in terms of the Carbon Tax Act, 2019.

The first phase has a carbon tax rate of R120 per ton of carbon dioxide equivalent emissions. This
rate will increase annually by inflation plus 2 per cent until 2022, and annually by inflation
thereafter.

Significant industry-specific tax-free emissions allowances ranging from 60 per cent to 95 per cent
will result in a modest nett carbon tax rate ranging from R6 to R48 per ton of carbon dioxide
equivalent emissions to provide current emitters time to transition their operations to cleaner
technologies through investments in energy efficiency, renewables, and other low-carbon measures.

In line with the COVID-19 related economic stimulus package announced by President Cyril Ramaphosa, the filing requirement and the first carbon tax payment which was due by 31 July 2020 will be delayed to 31 October 2020.

To help ease your carbon tax worries, the Green Building Design Group has designed a Carbon Tax Assessment and Reporting tool, enabling businesses to do a basic calculation to determine their carbon tax liability based on production data and GHG data

The Carbon Tax Tool enables clients to submit their returns to South African Revenue Service (SARS) with the click of a button! It has an annual tax and accounting period. Every licensee must submit an annual CBT environmental levy account in respect of each licenced facility of that licensee in the month of July of the year following the tax period.

All licensees must be registered for eFiling as the submission and payment of CBT accounts should be made via eFiling. The following process should be followed:

• Register on eFiling;
• Once registered, log on;
• Click on the Request Declaration button;
• Insert the warehouse number;
• Click on continue and the form will be generated.

If clients are not able to access the SARS eFiling service, they must contact the nearest SARS Excise
Branch Office for assistance.

A circular economy is an economic system that tackles global challenges like climate change, biodiversity loss, waste, and pollution. Most linear economy businesses take a natural resource and turn it into a product which is ultimately destined to become waste because of the way it has been designed and made. In a circular economy, manufacturers design products to be reusable. For example, electrical devices are designed in such a way that they are easier to repair. Products and raw materials are also reused as much as possible. 

A Solar Power Purchase Agreement (PPA) allows businesses to pay off and maintain their own solar energy systems at no upfront costs, while enjoying the immediate benefit of cost savings. Just like a solar lease or solar rental, a solar PPA allows business owners to benefit from solar energy without the upfront cost of buying a system. Solar PPAs are becoming a popular choice in the Commercial & Industrial space because the operations and maintenance of the system are covered by the solar services provider, and most often includes insurance and performance guarantees, with the biggest advantage being reduced electricity costs from day one. In the case of South Africa, with the costs of solar equipment falling and electricity tariffs escalating, it is expected that a large-scale solar facility will provide power at costs lower than Eskom’s lowest bulk tariff from 2019 onwards; making solar a viable option to investigate for all energy-intensive clients

ESG stands for Environmental, Social and Governance. This is also called sustainability in many cases. In a business context, sustainability is about the company’s business model, i.e. how its products and services contribute to sustainable development. With growing concern about the ethical status of listed companies, these standards are the central factors that measure the ethical impact and sustainability of investment in a company. Our global team of ESG consultants can assist companies complete materiality assessments and thereby mitigate these enterprise risks in the short to longterm. 

Energy Performance Certificates are a rating scheme to summarise the energy efficiency of buildings. The building is given a rating between A (Very efficient) – G (Inefficient),

In the South African Government Gazette on 8 December 2020, Energy Performance Certificates are now mandatory for private sector, non-residential buildings with a total net floor area of over 2000sqm, and government buildings of over 1000sqm. The EPC must be displayed at the building’s main entrance; and must be submitted to the South African National Energy Development Institute (SANEDI).  Energy performance certificates are used in many other countries. South Africa is the first African country to make EPCs mandatory.

EPC’s will be available publicly and will give greater knowledge to buyers about the historical consumption of a building. Similar EPC’s have been in effect in Europe and the UK since 2007, where they are required when selling a property mandatory. 

A Renewable energy credit (REC) is a certificate corresponding to the environmental attributes of energy produced from renewable sources such as wind or solar.  While RECs are not actually a measure of power, each REC represents one megawatt hour (MWh) of renewable-generated energy. A REC can be sold separately from the actual electricity (kilowatt-hour, or kWh). If you own the RECs associated with your renewable energy project’s electricity output, you can sell these RECs to another party.