[DEBATE] : (Fwd) SASOL CDM scam alert

[Patrick Bond]

-------- Original Message --------
Subject: 	[EnergyCaucus] FW: Press Release: SASOL’s CDM and Greenwash
Date: 	Tue, 17 Feb 2009 14:13:41 +0200
From: 	Nomxolisi Mapuza <seccp at earthlife.org.za>
Reply-To: 	EnergyCaucus at googlegroups.com
To: 	<EnergyCaucus at googlegroups.com>



Press Release: SASOL’s CDM and Greenwash

Earthlife Africa Jhb
17th of February 2009

In December 2008, Sasol formally applied to register a project with the 
United Nations Framework Convention on Climate Change (UNFCCC) Clean 
Development Mechanism (CDM); i.e. they requested the right to produce 
and sell carbon credits. This project is a 645km natural gas pipeline 
running from Mozambique to its Secunda coal-to-liquids plant in South 
Africa, along with the requisite gas conversion and processing 
technology and the development of natural gas fields in Mozambique.

There is a strong suspicion that SASOL’s application is no more than a 
particularly lucrative piece of greenwash. This suspicion is based off 
SASOL’s own published documents.

Sasol claims that it needs to find a new source of fuel as the coalmine 
that previously fed its coal-to-liquids Secunda plant has reached the 
end of its lifespan. It had the option of either opening a new coal 
mine, or building a natural gas pipeline from Mozambique. The company 
chose the natural gas option. 

Using natural gas instead of coal will reduce greenhouse gas emissions, 
and, hence Sasol’s argument for registering as a CDM project. The value 
of the carbon credits is considerable, in the neighbourhood of R1.1 
billion a year.
 
The area of contention deals with Sasol’s claim that if there wasn’t an 
option to sell carbon credits, it would not have built the pipeline, and 
it should therefore qualify for the CDM. This ‘additionality’ provision 
to the project is vital for CDM approval and only is retrospectively 
applied to projects from 1st of January 2000. This means if that you 
were planning to do a project before 01/01/00, then you violate the 
‘additionality’ clause 

The question is, was Sasol planning to implement the pipeline and the 
Secunda and Sasolburg conversions in the absence of CDM and, most 
crucially, planning before the 1st of January 2000, as mandated under 
UNFCCC rules? Somewhat surprisingly, the answer seems to be in Sasol’s 
own Annual Report in 1999, before the advent of CDM, and is worth 
quoting at length:

“Sasol’s pursuit of alternative hydrocarbon sources advanced appreciably 
in Mozambique where Sasol Petroleum International (SPI) and its joint 
venture partners, Arco of the USA, Zarara of the United Arab Emirates 
and EMH of Mozambique, continued their exploration for natural gas in 
the Temane field. They have, to date, discovered a reserve of 
world-class size, presently under certification of an exceptionally high 
quality. Sasol believes that the possibility of Mozambique being able to 
benefit economically from its extensive natural gas reserves and of 
Sasol and other South African companies becoming beneficial users of 
this gas is nearing realization….

“Sasol has a viable market for Mozambican gas, as a supplementary 
feedstock for its petrochemical plants at Sasolburg and Secunda, which 
currently rely exclusively on coal for their hydrocarbon feedstock. 
Being rich in methane, natural gas is a viable alternative feedstock for 
Sasol’s Fischer-Tropsch process. Sasol has also been supplying synthetic 
gas to downstream markets since 1964, through its distribution 
pipelines, which now form a 1 500-kilometre network in the provinces of 
Gauteng, Mpumalanga and Kwa-Zulu Natal.

“Sasol plans to build a 925-kilometre pipeline to link the Temane fields 
to its South African operations. The pipeline is by far the most 
expensive part of the project at an estimated US$600 million. The 
remaining production facilities and support infrastructure are likely to 
entail a further investment of about US$400 million.”

Not only does Sasol state in the document that it found high quality 
natural gas in Mozambique (a process that would have begun well before 
1999), that it had a use for such gas in its Sasolburg and Secunda 
plants, that the gas from Mozambique was a “viable alternative” to 
locally mined coal, that it had an external market for the gas, but also 
that it was planning to build the pipeline. In fact, Sasol had already 
costed the operation and did not find it prohibitive. 

In other words, Sasol’s plans to build the natural gas pipeline and use 
that gas in its CTL plants predates the adoption of the amendments to 
the Kyoto Protocol in Bonn in 2001, and misses the cut-off date of 1st 
of January 2000.

This marks, in Earthlife Africa Jhb’s opinion, a cynical attempt to game 
the CDM system; thus earning billions in revenue and perverse ‘right’ to 
continue pumping greenhouse gases into the atmosphere.

Tristen Taylor, Energy Policy Officer for Earthlife Africa Jhb, further 
states, “Even apart from the additionality concerns, there are strong 
reasons to view Sasol’s application for carbon credits with a cynical 
eye. The whole rationale behind the Kyoto Protocol is to limit and then 
reduce greenhouse gases.  Sasol’s conversion to natural gas at its 
Secunda plant will not work towards that goal; simply because the 
company’s total emissions are due to rise. It plans to build at least 
three new coal-to-liquid plants; Indonesia, China, and South Africa. Any 
emissions cuts at Secunda will be quickly surpassed by emission rises at 
other Sasol operations.”

Even if the UNFCCC grants the CDM credits, Sasol will remain one of 
biggest corporate emitters of greenhouse gases on the planet.

Earthlife Africa Jhb has filed a formal objection with UNFCCC to SASOL’s 
application for CDM credits, and calls for SASOL to withdraw its 
application.

For more information, please contact:

Makoma Lekalakala
Programme Officer
Earthlife Africa Jhb
Tel: +27 11 339 3662
Fax: +27 11 339 3270
Cell: +27 82 682 9177
Email: makomaphil at gmail.com <mailto:makomaphil at gmail.com>

Tristen Taylor
Energy Policy Officer
Earthlife Africa-Johannesburg Branch
Tel: +27 11 339 3662
Fax: +27 11 339 3270
Cell: +27 84 250 2434
Email: tristen at earthlife.org.za <mailto:tristen at earthlife.org.za>


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