Corporate lobbying to weaken and delay climate and pollution regulation is pervasive, and largely unseen. It continues to succeed in obtaining long delays and weaker regulation of both greenhouse gas (GHG) emissions and toxic air pollution.
Yet the extent and influence of this lobbying often remain hidden from public view.
A crucial step in addressing this lobbying is greater transparency in government dealings with industry. South Africa needs mandatory public disclosure of business-government interactions, as well as the publication by government of all submissions from stakeholders in response to government calls for public comment on proposed policy and legislation.
To this end, Just Share calls upon the Department of Forestry, Fisheries and the Environment (DFFE) not only to publish the carbon budget and mitigation plans regulations without further delay, but also the accompanying comments and response report setting out which stakeholders made submissions and how government responded to them.
We have also requested from DFFE – and not received – the comments and response reports for the draft second Nationally Determined Contribution and the 2025 proposed amendments to the List of activities and associated minimum emission standards. Without access to these documents, the public cannot assess how industry lobbying may have influenced policymaking.
The Taxation Laws Amendment Bill, 2025, which incorporates changes to several tax-related laws, commenced on 1 April 2026. Amongst other changes to the Carbon Tax Act, it amends section 5 to introduce a higher carbon tax for emissions that exceed the carbon budgets allocated to high-emitting companies by DFFE.
The Climate Change Act provides that carbon budgets will be allocated to companies that conduct activities emitting GHGs above a particular threshold. However, these budgets are not yet mandatory because the regulations governing their determination, implementation and enforcement have still not been finalised.
In terms of the draft carbon budget and mitigation plans regulations, companies operating fossil fuel plants (for example) that emit at least 30 000 tonnes of carbon dioxide equivalent (tCO2e) will be subject to carbon budgets. These budgets must have a duration of at least three successive five-year periods; and must specify the maximum amount of GHG emissions that companies are allowed to emit during the first five-year period.
Just Share has long argued that significant penalties should apply to companies that pollute in excess of their carbon budgets. Although emitters have been aware of the imperative to decarbonise for over two decades, they have consistently failed to take the requisite action at the pace required to reduce emissions in line with climate science. It is clear that they will not do so unless there are serious consequences for this failure.
Unsurprisingly, industry pushed back hard against the inclusion in the Climate Change Act of penalties for non-compliance with carbon budgets. Instead, DFFE has “outsourced” the consequences of this violation to National Treasury.
When the draft carbon budget regulations were published for comment in August 2025, these stated that a company that exceeds its carbon budget would be subject to a higher tax rate “as provided for in the Carbon Tax Act”. In other words, excess carbon tax will be levied on emissions that exceed carbon budgets, but DFFE prescribes no penalties for this contravention.
The current carbon tax rate is R308 per tCO2e of GHG emissions for all companies that conduct activities emitting a prescribed quantity of GHGs. For instance, all power plants with a thermal input capacity of 10 megawatts or more are liable to pay carbon tax.
South Africa’s carbon tax is low, in large part due to sustained lobbying by big emitters like Sasol, and powerful industry associations like Business Unity South Africa and the Minerals Council.
The tax’s impact is even further diluted by the fact that between 85-95% of taxable emissions are exempt from the carbon tax, even though Phase 2 of the tax has since commenced. This phase was supposed to ramp up its effect to “provide a strong price signal to both producers and consumers to change their behaviour over the medium to long term” – in other words, to give real effect to the “polluter pays” principle.
Instead, not only was Phase 2 of the tax delayed by three years, but it continues largely to permit polluters to conduct business-as-usual.
Assuming maximum allowances, the current effective carbon tax rate is around R46.20 (US$2.82) per tCO2e for combustion emissions and R15.40 ($0.94) per tCO2e for process and fugitive emissions. In 2024, the International Monetary Fund stated that the global average carbon price was around $5 per tCO₂e when averaged across all emissions.
Even by 2030, South Africa’s carbon tax will only be R462 per tCO2e ($28.22). Again assuming maximum allowances, the 2030 effective rate would be R69.30 ($4.23) per tCO2e and R23.10 ($1.41) per tCO2e.
By contrast, the 2017 High Level Commission on Carbon Prices determined that a carbon price “consistent with achieving the Paris temperature target” would be $50-100 per tCO2e by 2030, and recommended $50 per tCO2e by 2030 for middle-income countries.
The amendments to section 5 of the Carbon Tax Act introduce a higher tax rate – R640 per tCO2e – which will apply to GHGs above the emitter’s carbon budget. Whilst it is positive that no allowances will apply to these emissions, even this supposedly “punitive” rate remains well below the carbon price levels required by climate science.
This new provision is also not yet in force because the DFFE has yet to publish its carbon budget and mitigation plans regulations.
The fact that the South African carbon tax is so weak has substantially compromised its effectiveness. Pricing carbon to reflect the actual cost of emissions to society would force high-emitters to internalise these costs, driving innovation to reduce emissions.
By giving effect to the “polluter pays” principle, an effective carbon tax can accelerate decarbonisation and green industrialisation.
Corporate lobbying to delay and weaken regulatory action is ongoing. Major polluters repetitively deploy a series of arguments to attempt to convince policymakers that their proposed course of regulatory action is unwise and will have devastating “unintended” consequences. These arguments have been successful in relation to multiple policies and all legislation aimed at reducing industrial emissions – including the Carbon Tax Act, the Climate Change Act, and the Air Quality Act.
This is precisely why transparency matters. It is in the public interest for stakeholders to understand how corporate lobbying shapes policy outcomes.
Without significantly-enhanced transparency in business-government interactions, and meaningful penalties for polluters that fail to reduce emissions, corporate influence will continue to undermine South Africa’s emissions reduction commitments, exacerbate environmental injustice, and threaten South Africa’s economic competitiveness in a rapidly-decarbonising global market.
IMAGE: Leon Sadiki/Bloomberg via Getty Images