SUCCESSFUL CONCLUSION OF THE DECISION OF THE MINISTER OF FORESTRY, FISHERIES AND THE ENVIRONMENT ON SASOL'S APPEAL RELATED TO ITS CLAUSE 12A APPLICATION

Rhea-AI Summary

Sasol (SSL) has received a favorable decision from the Minister of Forestry, Fisheries and the Environment regarding its appeal for alternative regulation of sulphur dioxide (SO2) emissions at its Secunda Operations. The Minister has permitted SO2 emissions from the steam plant boilers to be regulated on an alternative emission load basis from 1 April 2025 to 31 March 2030. On 26 July 2024, Sasol was notified of the concentration-based limits to be applied alongside the load-based limit. This decision allows Sasol to proceed with implementing its load-based integrated solution.

Sasol will now apply to the local licensing authority to incorporate these limits into its atmospheric emissions license (AEL) for Secunda Operations, ensuring lawful operations from 1 April 2025. This development marks a significant regulatory milestone for Sasol's environmental compliance strategy.

Positive

• Approval of alternative emission regulation for SO2 from 2025 to 2030
• Permission to implement load-based integrated solution for emissions control
• Potential for improved operational flexibility with new emission limits

Negative

• Ongoing regulatory requirements may impact operational costs
• Need to apply for and obtain updated atmospheric emissions license

Insights

Environmental Policy Analyst

The Minister's decision on Sasol's appeal regarding SO2 emissions regulation is a significant development for the company's operations and environmental compliance strategy. This ruling allows Sasol to implement an alternative emission load-based approach for its Secunda Operations' steam plants from April 2025 to March 2030, coupled with newly determined concentration-based limits.

From an environmental policy perspective, this decision represents a nuanced approach to emissions regulation. The load-based system, combined with concentration limits, aims to provide flexibility while maintaining environmental safeguards. This could potentially serve as a model for other industries grappling with emissions compliance.

However, the devil is in the details. The effectiveness of this approach in reducing overall SO2 emissions and its impact on air quality in the region will need to be closely monitored. It's important to note that this decision doesn't exempt Sasol from environmental responsibilities but rather provides an alternative pathway for compliance.

The next critical step is the incorporation of these limits into Sasol's Atmospheric Emissions License (AEL). This process, involving the local licensing authority, will be pivotal in translating the Minister's decision into enforceable operational parameters. Stakeholders should pay close attention to how these limits are ultimately reflected in the AEL and how they compare to previous standards.

While this decision provides Sasol with operational certainty for the next five years, it also underscores the ongoing challenges in balancing industrial operations with environmental protection in South Africa's energy sector. The long-term implications for Sasol's sustainability strategy and the broader policy landscape for emissions regulation in the country remain to be seen.

Financial Analyst

The Minister's decision on Sasol's SO2 emissions appeal has significant financial implications for the company. By allowing an alternative emission load-based approach, Sasol gains operational flexibility that could potentially lead to cost savings and improved efficiency in its Secunda Operations.

From a financial perspective, this ruling reduces regulatory uncertainty for Sasol, which is important for long-term planning and investment decisions. The five-year timeframe (2025-2030) provides a stable regulatory environment, allowing the company to optimize its operations and potentially defer or modify capital expenditures related to emissions control.

However, investors should note that this decision doesn't eliminate the need for environmental investments. Sasol will still need to manage its emissions within the new load-based and concentration-based limits. The company may need to allocate resources to implement and monitor this new approach effectively.

The impact on Sasol's financials could be multifaceted:

• Potential reduction in compliance costs compared to stricter concentration-based limits
• Possible increase in operational efficiency due to greater flexibility in managing emissions
• Potential avoidance of production curtailments that might have been necessary under more stringent regulations

Investors should closely monitor Sasol's future disclosures on the financial implications of this regulatory change, including any revisions to capital expenditure forecasts or operational cost projections. Additionally, the market's reaction to this news could provide insights into how investors perceive the balance between environmental compliance and financial performance in the energy sector.

While this decision is generally positive for Sasol's near-term financial outlook, long-term investors should also consider the broader trend towards stricter environmental regulations and the potential for future policy changes beyond 2030.

JOHANNESBURG, July 29, 2024 /PRNewswire/ -- Shareholders are referred to Sasol's SENS announcement of 8 April 2024 in which it was stated that the Minister of Forestry, Fisheries and the Environment permitted sulphur dioxide (SO2) emissions, generated from the boilers at our Secunda Operations' steam plants, to be regulated on an alternative emission load basis from 1 April 2025 to 31 March 2030. It was further stated that the decision was contingent on the finalisation of a further regulatory requirement for it to take full effect.

On 26 July 2024, Sasol received notification of the concentration-based limits the Minister has determined to be applied with the load-based limit. This decision must be read in conjunction with the decision issued by the Minister on 5 April 2025. Sasol can accordingly continue with the implementation of its load-based integrated solution.

Sasol will apply to the local licensing authority to incorporate the above-mentioned limits in the atmospheric emissions license (AEL) for its Secunda Operations, to give effect to the Ministers decision. The varied AEL will enable lawful operations from 1 April 2025.

The decision is available on our website: www.sasol.com.

For further information, please contact:
Sasol Investor Relations,
Tiffany Sydow, VP Investor Relations
Telephone: +27 (0) 71 673 1929
investor.relations@sasol.com

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SOURCE Sasol Limited

FAQ

What decision did Sasol (SSL) receive from the Minister of Forestry, Fisheries and the Environment?

Sasol received approval to regulate sulphur dioxide emissions from its Secunda Operations' steam plant boilers on an alternative emission load basis from April 1, 2025, to March 31, 2030.

When will the new emission regulations for Sasol (SSL) take effect?

The new emission regulations for Sasol's Secunda Operations will take effect from April 1, 2025, subject to the incorporation of the limits into their atmospheric emissions license.

What is Sasol (SSL) required to do next regarding its emissions license?

Sasol is required to apply to the local licensing authority to incorporate the new emission limits into its atmospheric emissions license (AEL) for Secunda Operations.

How long is the period granted to Sasol (SSL) for alternative emission regulation?

Sasol has been granted a five-year period for alternative emission regulation, from April 1, 2025, to March 31, 2030.