Sasol shares jump after it wins emissions appeal

Sasol won an appeal over how emissions are calculated at its Secunda plant in South Africa, preventing an interruption to chemical and fuel production in a ruling environmentalists argued will cause additional pollution.

The company’s shares jumped following this news.

Parts of the business that are at the heart of Sasol’s coal-based chemical and fuels production in Secunda — the world’s largest single-point emitter of greenhouse gas — had been under threat after authorities initially ruled the company couldn’t change the way it regulates emissions.

However, South African Environment Minister Barbara Creecy upheld Sasol’s appeal that it should be permitted to switch to regulate emissions on a so-called alternative-emission load basis instead of current concentration-based limits, as it said in a statement on Monday.

Sasol shares gained as much as 6.6%, the most since January 2023, and traded 5.6% higher by 12:50 p.m. in Johannesburg.

The decision “will result in emissions significantly above those permitted by the minimum emissions standards, which are already weaker than comparative standards around the world,” said Robyn Hugo, director of climate change engagement for Just Share, a Cape Town-based investor activist organization.

“The negative air quality and health impacts of these emissions are significant.”

Sasol is South Africa’s second-biggest emitter of greenhouse gases and is under growing pressure to reduce pollution caused largely by its coal-based manufacturing processes.

Executives have announced plans to reduce the group’s emissions by 30% by 2030 and lined up renewable energy and clean power solutions, though investors have criticized the strategy as light on specifics.

When launching its appeal for an alternative calculation to measure sulfur dioxide, Sasol used an analogy of six mugs of coffee with sugar.

The company argued on its website that the number of teaspoons of sugar, representing sulfur dioxide, could be reduced in each cup (concentration-based) or half the mugs could be used with the same amount of the pollutant (load-based).

The latter would also curtail the amount of “caffeine,” representing particulate matter and nitrogen oxides, it said.    

According to Sasol, Creecy permitted load-based limits to be applied from April 1, 2025, until March 31, 2030.

The company said, “We will engage with the minister to finalize the regulatory requirements for the decision to take full effect.”