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Energize Lack of transparency around fossil fuel subsidies lands SA...
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Lack of transparency around fossil fuel subsidies lands SA in the G20 dogbox

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Information from IISD  –  

South Africa is regarded as the second worst performer of the G20 non-OECD member countries due to its lack of transparency and continued support for coal production, fossil fuel-based power and the consumption of fossil fuels.

This is according to a report on global fossil fuel subsidies released recently by the International Institute for Sustainable Development (IISD), the Overseas Development Institute (ODI), and Oil Change International (OCI).

Anna Geddes

The report found that the South African government spends more than R93-billion a year ($5,7-billion) on direct support for fossil fuel use through subsidies to its predominantly coal-based electricity system. A lack of transparency around other hidden forms of price support to fossil fuels and bailouts to the state’s power utility Eskom means that this figure is likely to be higher, says the report.

Anna Geddes, lead author of the report, said that SA’s poor performance compared to G20 and emerging market peers is due to a lack of transparency around fossil fuel subsidies. “The South African government fails to regularly report and quantify various forms of state support for heavy fossil fuel users such as Eskom and Sasol,” says Geddes. “South Africa committed to reduce its reliance on fossil fuels, yet we have seen a 14% increase in total government support for fossil fuels over the last three years. This is predominantly due to a 79% increase in price support for fossil fuel-based power.”

In Doubling Back and Doubling Down: G20 Scorecard on Fossil Fuel Funding G20 countries are ranked according to seven indicators: transparency, pledges, public money for coal, oil and gas, fossil fuel-based power (both production and consumption), as well as how support has changed over time.

Researchers raised “particular concern” over the government’s continued spending to pipe precious water from drought-prone areas to coal-fired power plants. “More than R1-billion ($68-million) in government funding has been made available for water transportation projects to supply water to coal power plants in the Limpopo province,” says Geddes. “This includes the Matimba and Medupi power stations near Lephalale, and the water-intensive Grootegeluk coal mine.”

South Africa urgently needs to build new renewable energy to ensure sustainable development and address the energy security crisis and start its just transition,” says Jesse Burton, a senior associate at global think tank E3G.

Contact Paulina Resich, International Institute for Sustainable Development (IISD), presich@iisd.org

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