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South Africa\u2019s troubled state-owned power utility has yet another thing to worry about – a big carbon tax bill expected to kick in from 2023.<\/p>\n
Eskom which has been forced to turn to the government for bailouts to meet its obligations, mostly burns coal to generate power and is one of the country\u2019s biggest polluters.<\/p>\n
The company will benefit from exemptions in the first phase of the tax that took effect from 1 June.<\/p>\n
However, a second phase that starts in 2023 may mean an annual carbon-tax bill of about R11.5 billion ($813 million), Gina Downes, chief adviser for environmental economics at the utility, said Tuesday in a presentation in Johannesburg.<\/p>\n
“There\u2019s likely to be a significant additional revenue requirement,” Downes said. The utility said earlier that \u201csubstantial\u201d costs were anticipated in the second phase of the tax, without giving an estimate.<\/p>\n
Eskom, which produces more than 90% of South Africa\u2019s electricity, accounts for about 42% of the country\u2019s greenhouse gas emissions, Downes said.<\/p>\n
As part of efforts to revive Eskom\u2019s finances, South Africa is considering plans to increase the amount of renewable-energy generation and shut some coal plants early in exchange for getting better terms on the utility\u2019s debt, a person familiar with the matter said last month.<\/p>\n