By Samkele Mchunu
South Africa’s subsidies for fossil fuels tripled between 2018 and 2023, reaching a staggering R118 billion, according to the latest findings of the “Blackouts and Backsliding: Energy Subsidies in South Africa 2023” report released by the International Institute for Sustainable Development (IISD), a renowned think tank.
The surge in subsidies, up from R39 billion five years earlier, has been attributed primarily to the global energy crisis, exacerbated by soaring prices for oil, gas, and coal following geopolitical tensions, particularly Russia’s invasion of Ukraine.
Anna Geddes, co-author of the report and associate consultant at IISD, expressed concern over South Africa’s deepening reliance on economically unstable fossil fuels. Geddes highlighted that the country’s fossil fuel subsidies fail to effectively shield the most vulnerable households while perpetuating dependency on non-renewable energy sources.
“Carbon tax exemptions for major emitters like Eskom, coupled with plans to expand gas-generated power, contradict South Africa’s commitments to transitioning away from fossil fuels,” Geddes remarked, emphasizing the need for government support aligned with climate targets and social priorities.
The report revealed that fossil fuels accounted for 91% of South Africa’s total energy supply in 2021, significantly higher than the global average of 80%. Coal remained the dominant source of electricity generation, comprising 86% of the total, despite substantial cost reductions in renewable energy installations over the past decade.
Moreover, South Africa’s electricity grid has been under strain, with frequent and prolonged blackouts reaching record levels in the preceding year. The report attributed these challenges to insufficient investment in new generation capacity and grid infrastructure by both the government and Eskom, the state-owned utility burdened with heavy debt.
Despite commitments to phase out inefficient fossil fuel subsidies as a G20 member and in alignment with COP 28 agreements, South Africa’s draft Integrated Resource Plan 2023 indicates a growing reliance on gas at the expense of renewables, raising concerns about the nation’s energy future.
Geddes warned that escalating blackouts pose significant socio-economic risks for South Africa and urged a shift towards sustainable energy alternatives. “Expanding subsidies for volatile fossil fuels will heighten risks and hinder long-term energy security,” she cautioned, urging the country to embrace greener alternatives to avoid being left behind in global efforts to combat climate change.
As South Africa grapples with persistent power outages, exacerbated by looming water shortages and challenges in electricity generation, private sector industries are urged to play a pivotal role in reducing the country’s carbon footprint, as highlighted by Rectron, a leading company advocating for environmental sustainability.
The latest data from the World Bank indicates that South Africa’s per capita carbon emissions stand at 6.7 metric tons annually, significantly higher than the global average of 4.3, underscoring the urgency for comprehensive action to mitigate climate impacts and transition towards a greener future.
