South Africa’s carbon tax entered its second phase on 1 January 2026, and the cost of emitting has jumped. The headline rate rose from R236 to R308 per tonne of carbon dioxide equivalent, the biggest increase since the tax started in 2019.
What changed in phase two
- The headline rate increased to R308 per tonne of CO2e from 1 January 2026
- Phase two runs from 2026 to 2030
- The carbon offset allowance increased from 10% to 15% for fuel combustion emissions, and from 5% to 10% for process and fugitive emissions
- Treasury has proposed aligning carbon budget refunds with the five year carbon budget cycle
Who is affected
Carbon tax applies directly to businesses whose activities exceed the emissions thresholds, typically in mining, manufacturing, energy and heavy industry. Even if you are not a carbon tax payer, your customers, lenders and export markets increasingly ask for emissions data.
How to reduce your exposure
- Build an accurate greenhouse gas inventory so you know where your emissions come from
- Cut fuel and electricity use through energy efficiency, and claim Section 12L for verified savings
- Switch fuels where it makes sense, and add solar PV to reduce grid electricity
- Use carbon offsets strategically within the higher allowance
- Set a decarbonisation roadmap so future rate increases do not catch you by surprise
How Mega Unit can help
We prepare carbon footprints, energy baselines and decarbonisation plans, and we support Section 12L claims. Learn more about our energy and carbon services or talk to our team.
Source: Anthesis. This article is general information, not tax advice.
