Sasol’s greenhouse gas (GHG) emissions are only topped by Eskom among companies in Africa, and it is under growing shareholder and public pressure to clean up its act.  

The company said on Tuesday that it had signed three power purchase agreements (PPAs) on the renewable energy front in line with its target of cutting its absolute GHG emissions from its South African operations by at least 30%, with its 2017 profile as the baseline.  

One is with Msenge Emoyeni Wind Farm for 69MW of wind-powered energy for the group’s Sasolburg operations, which should start providing renewable power next year. 

“This is key in achieving the first production of green hydrogen generated from renewable energy sources at Sasolburg and progressing our ambition to lead the development of a green hydrogen economy in southern Africa,” Sasol said.  

Sasol and ArcelorMittal South Africa — which unveiled its decarbonisation roadmap on Tuesday — announced a partnership last year to develop carbon capture technology to produce sustainable fuels and chemicals and “green steel” with green hydrogen and its derivatives. 

On top of that, Sasol said that it and Air Liquide had signed two long-term PPAs with Enel Green Power for 220MW of wind power for the Secunda operations. The projects should be up and running by 2025.  

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“The concluded agreements are the first as part of a joint procurement initiative with Air Liquide and demonstrate Sasol’s commitment to procuring 1,200MW of renewable energy capacity by 2030,” Sasol said.  

The pace of Sasol’s decarbonisation efforts will be closely monitored and the ball is clearly in motion, though getting it in the net by 2030 will take a lot of effort. 

Sasol also said in a production and sales update for the six months to the end of December 2022 — the first half of its current financial year — that sales volumes were down 5% over that period in the face of a worsening global economic environment.  

“Sasol remains well positioned in the current oil price and refining margin environment, despite the negative impact from the weaker global economic growth, disrupted supply chains, depressed chemicals prices and higher feedstock and energy costs. Our South African operations experienced several operational challenges, most notably in the mining business,” the company said. 

“Despite these challenges, external sales revenue for H1 FY23 was only 2% lower compared to H1 FY22, driven by lower sales volumes. H1 FY23 sales volumes were 5% lower than H1 FY22, largely due to lower Eurasia volumes, offset by higher sales volumes in America.” 

Apparently, the market was braced for worse as Sasol’s share price shot up by more than 4% on the news in the face of a flat oil price on the day.  

Still, there are headwinds on the horizon, and not the kind that produce renewable power. For its mining unit, Sasol revised its production guidance slightly lower and raised concerns about the sector’s terrible twins, Eskom and Transnet.  

“Further pricing and demand volatility is expected for the remainder of FY23 in light of the volatile global macroeconomic environment and the potential for ongoing disruption from Eskom and Transnet on our suppliers and customers. Uncertainty around these factors impacts our ability to provide accurate volume forecasts at this time,” Sasol said. DM/BM