Data and Insights: South Africa

VCS Quarterly Update

ISSUE #2 - Q4/2020

We are pleased to present the second quarterly “Data and Insights” brief for South Africa, which includes up-to-date cumulative data on VCS activity in the country as well as information about recent trends through December 2020.

Under South Africa’s Carbon Tax Act, tax-liable entities can satisfy up to 10% of their tax obligations by purchasing carbon offsets. Verra’s Verified Carbon Standard (VCS) Program is recognized as an accredited standard under this regulation, and entities with tax obligations can use Verified Carbon Units (VCUs) to cover a portion of their tax liability. As the first Carbon Tax payments for the 2019 tax year were due by 30 October 2020, VCU issuances picked up significantly prior to that date.

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Main Takeaways

COVID-19 notwithstanding, VCU issuances in 2020 far surpassed 2019 issuances.

Despite the pandemic, which has impacted most economic sectors, the total number of VCUs issued from projects in South Africa increased considerably in 2020: from over 75,000 VCUs in 2019 to almost 1,200,000 VCUs in 2020.

The launch of the South African Carbon Offset Administration System (COAS) Mechanism surged VCU issuances.

While 2020 generally saw more VCU issuances than 2019, Q4/2020 — when the first tax payments for the tax year of 2019 were due — saw by far the biggest increase; this indicates that the launch of the carbon offset mechanism was the driver behind 2020 in issuances.

VCUs in South Africa are largely retired for compliance purposes.

Nearly 85% of all retired VCUs in South Africa to date have been for compliance purposes; however, so far only 28% of all retired VCUs (516,745 VCUs) have been listed in the COAS system for use by tax-paying entities to meet their tax obligations. An additional 1,049,095 VCUs are expected to be listed in COAS in the near future to be used in the upcoming tax payment period (which ends July 29, 2021).
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VCS Data and Insights: South Africa - Q4/2020
PROJECTS
This chart includes cumulative data about VCS projects in South Africa.
Project Total
Under Development 1
Under Validation 1
Registration Requested 2
Registered 15
Transferred* 8
*Projects whose credits were transferred from another GHG program
Project Types
AFOLU*
Energy industries (renewable/non-renewable sources)
Waste handling and disposal
Transport
Chemical industry
Industrial processing
Project Total
AFOLU* 4
Energy industries (renewable/non-renewable sources) 8
Waste handling and disposal 6
Transport 1
Chemical industry 7
Industrial processing 1
*Agriculture, Forestry, and Land Use
4,837,467 Expected Annual Reductions from All Projects in South Africa
Summary Totals to Date
VCU Issuances* (Total to Date)

*One VCU represents one tonne of carbon dioxide equivalent that was removed from the atmosphere or not emitted.

Greenhouse gas equivalencies for emission reductions and removals were calculated using the EPA Greenhouse Gas Equivalencies Calculator

540,423,886
VCUs Globally
116,755,105
cars taken off the road
for a year
2,035,052 VCUs from Projects in South Africa
VCU Issuances by Year
*The South Africa carbon tax was implemented in 2019.
VCU Issuances by Project Type
Energy industries
Waste handling and disposal
Chemical industry
Industrial Processing
Project Type VCUs
Energy industries 275,639
Waste handling and disposal 422,177
Chemical industry 1,327,593
Industrial Processing 9,643
Retirements
VCUs that have been purchased and taken off the market forever; a retired VCU represents a carbon offset.
1,847,123 VCUs
30,542,570
cars taken off the road
for a year
281,283 VCUs Retired for Voluntary Purposes
1,565,840 VCUs Retired for Compliance Purposes
516,745VCUs Retired & Listed in the COAS for the Oct 30, 2020 tax period