President Cyril Ramaphosa  has signed into law the South African Carbon Tax Act No 15 of 2019, which comes into effect from 1 June 2019, an announcement made  by the Minister of Finance in the 2019 Budget.

The Act was gazetted on 23 May 2019 (Gazette No. 42483), together with the Customs and Excise Amendment Act No. 13 of 2019 (Gazette No. 42480). Climate change represents one of the biggest challenges facing human kind, and the primary objective of the carbon tax is to reduce greenhouse gas (GHG) emissions in a sustainable, cost effective and affordable manner.

The South African government has outlined its strong commitment to play its part in global efforts to mitigate GHG emissions as outlined in the National Climate Change Response Policy (NCCRP) of 2011 and the National Development Plan (NDP) of 2012.

Subsequently, the government has reportedly set its own domestic targets as outlined in the Nationally Determined Contribution (NDC), which was incorporated as the South African commitment in the Paris Agreement (convened by the United Nations Framework Convention on Climate Change (UNFCCC). South Africa ratified the Paris Agreement in November 2016.

The carbon tax forms an integral part of ensuring that South Africa meets these targets.

The Carbon Tax Act gives effect to the polluter-pays-principle for large emitters and helps to ensure that firms and consumers take the negative adverse costs (externalities) into account in their future production, consumption and investment decisions.Firms are incentivized towards adopting cleaner technologies over the next decade and beyond.

The carbon tax will initially only apply to scope 1 emitters in the first phase. The first phase will be from 1 June 2019 to 31 December 2022, and the second phase from 2023 to 2030, according to AllAfrican.