Petrochemical giant Sasol has come under fire for its emission reduction plans, particularly around its reliance on new technologies and resources to deliver the needed gains.
“Sasol’s plans are risky, expensive, and potentially unfeasible,” said Just Share. The company intends to reduce its use of coal, ramping up gas and hydrogen, in order to cut emissions by 30% by 2030.
The target covers scope 1 and 2 emissions, giving a target of 44.75 million tonnes of CO2 equivalent in 2030.
Just Share noted an acknowledgement from Sasol that such a shift faces challenges of “unavailability and unaffordability” of gas. It also faces potentially “prohibitive costs” of green hydrogen. Replacing coal with other feedstocks for operations in Secunda is “likely to increase the cost of production and reduce our profitability significantly”.
As a first step, Sasol aims to achieve a 5% reduction by 2026. Just Share described the additional 25% reduction in four years as “highly unlikely”.
Sasol’s plan relies on new supplies of gas, from Mozambique and likely LNG imports.
Just Share was unconvinced. The company failed to “demonstrate that a pivot to gas is feasible or affordable, or that it is a credible decarbonisation pathway”, the report said. Sasol has also failed to shed light on what happens if it does not secure the needed supplies.
Furthermore, Sasol does not report emissions from Mozambique.
Sasol will hold its AGM on November 19. Resolution Number 3, a non-binding vote, asks shareholders to endorse the company’s climate change report.
Just Share has advised shareholders to vote against the resolution. If at least 25% of the votes go against Sasol’s report, the company has said it will engage with shareholders. As such it would address “legitimate and reasonable objections and concerns”.