The Carbon Tax Act and the Customs and Excise Amendment Act were both officially gazetted on Thursday (23 May) and will come into effect from 1 June 2019.
The two acts work in conjunction with each other, with the Customs and Excise Amendment Act primarily dealing with administrative issues surrounding the implementation of the new carbon tax.
According to environmental lawyer at Norton Rose Fulbright, Tina Costas, the Carbon Tax Act aims to reduce harmful emissions by introducing the ‘polluter-pays principle’.
“This principle incorporates the costs of damage caused by greenhouse gases into the price of high carbon-emitting goods and services,” she said.
“It should change consumer behaviour and encourage investors to shift towards low carbon options.”
Costas said that companies, individuals and public entities will be liable to pay the carbon tax if conducting an activity that results in the emission of GHGs above the prescribed emission thresholds.
The greenhouse gases covered include carbon dioxide, methane, nitrous oxide, perfluorocarbons, hydrofluorocarbons and sulphur hexafluoride.
This will effectively eat into any substantial drop in petrol price, with the CEF’s data mid-month showing a slight over recovery for both grades of petrol (93 and 95), pointing to a 5 to 7 cents per litre drop on the cards for June (including the tax).
However, the new carbon tax is also expected to be felt in the longer term.
This includes ‘trickle-down taxing’ on fugitive emissions in the petrol and diesel value chains from oil production, transport and venting which will likely be passed down to consumers.