Energy and chemicals giant, Sasol Limited, has announced that it has updated its strategy to reach net zero emissions by 2050. The company will transform its business model by transitioning from coal to gas and green hydrogen. The company says the strategy is in line with its objectives to help accelerate the transition to a low carbon world in support of the objectives of the Paris Agreement.
In aligning with its 2050 ambition, Sasol has stepped up its 2030 scope 1 and 2 greenhouse gas (GHG) emission reduction target, from an initial 10% for its South African operations, announced last year, to 30% for its Energy and Chemicals businesses, off a 2017 baseline. The company is also introducing a scope 3 reduction target, for its Energy Business, off a 2019 baseline.
“Based on detailed assessments and modelling, our 2030 target can be delivered without divestments and offsets, but through the direct decarbonisation of our existing assets,” said Fleetwood Grobler, President and Chief Executive Officer of Sasol.
“This will be done through a mix of energy and process efficiencies, investments in renewables and a shift to incremental natural gas as a transition feedstock for our Southern African value chain. These solutions are well known and mostly under our control, and the investments required are cost-effective, preserving strong returns in our business, above the cost of capital.”
Sasol ditching coal
Beyond 2030, Sasol says it has more than one viable pathway to get to its net zero ambition by 2050. In Southern Africa the company will shift its feedstock away from coal, towards more transition gas, and then, green hydrogen and sustainable carbon over the longer term, as economics improve for these options.
“In an uncertain future, this approach offers agility and enables us to pivot as cost effective mitigation levers become available. We are also avoiding infrastructure lock-in and regret capital spend,” said Grobler.
“We are setting up a new business, Sasol ecoFT, with the intent to build on our technology leadership, to establish a significant market position internationally. One of the first applications for the technology is likely to be sustainable aviation fuels (SAF), where new regulations are driving demand and existing technology and feedstocks have limitations that FT can address,” added Grobler.
As global economies transform their energy systems, this will disrupt the industry, shift value pools and job markets. This transition will require new diverse skills and capabilities in different geographies. Sasol says it will progress a just transition across its geographical footprint, with the aim of protecting and fostering employment opportunities by accelerating the development of new energy value pools.
“While the workforce impact is likely to be after 2030 – this needs to be anticipated now, with the right long term human capital plans – managing a natural transition of people involved in fossil fuels related activities and investing in reskilling for the needs of a low carbon economy in the future,” said Grobler.
