Country for PR: United Kingdom
Contributor: PR Newswire Europe
Thursday, September 23 2021 - 00:30
Sasol commits to net zero ambition by 2050, triples 2030 GHG emission reduction targets
JOHANNESBURG, Sept. 22, 2021 /PRNewswire-AsiaNet/ --

Sasol Limited (Sasol) today announced its updated strategy that commits it to 
be at net zero emissions by 2050. This is in line with Sasol's commitment to 
accelerate its transition to a low carbon world in support of the objectives of 
the Paris Agreement.

In aligning with its 2050 ambition, Sasol has stepped up its 2030 scope 1 and 2 
greenhouse gas (GHG) emission reduction target, from an initial 10% for its 
South African operations, announced last year, to 30% for its Energy and 
Chemicals businesses, off a 2017 baseline. The company is also introducing a 
scope 3 reduction target, for its Energy Business, off a 2019 baseline.  This 
is consistent with what its peers have committed to.

"Based on detailed assessments and modelling, our 2030 target can be delivered 
without divestments and offsets, but through the direct decarbonisation of our 
existing assets," said Fleetwood Grobler, President and Chief Executive Officer 
of Sasol.

"This will be done through a mix of energy and process efficiencies, 
investments in renewables and a shift to incremental natural gas as a 
transition feedstock for our Southern African value chain. These solutions are 
well known and mostly under our control, and the investments required are 
cost-effective, preserving strong returns in our business, above the cost of 

Beyond 2030, Sasol has more than one viable pathway to get to its net zero 
ambition by 2050, with different options to transform its Southern Africa value 
chain by progressively shifting its feedstock away from coal, towards more 
transition gas, and then, green hydrogen and sustainable carbon over the longer 
term, as economics improve for these options. 

"In an uncertain future, this approach offers agility and enables us to pivot 
as cost effective mitigation levers become available. We are also avoiding 
infrastructure lock-in and regret capital spend," said Grobler.

Sasol's proprietary Fischer-Tropsch (FT) technology, in particular, is well 
suited to play a meaningful role, in a low carbon future, with attractive new 
and emerging value pools. 

"Against this backdrop, we are setting up a new business, Sasol ecoFT, with the 
intent to build on our technology leadership, to establish a significant market 
position internationally.  One of the first applications for the technology is 
likely to be sustainable aviation fuels (SAF), where new regulations are 
driving demand and existing technology and feedstocks, have limitations that FT 
can address."

A just transition
As global economies transform their energy systems, this will disrupt industry, 
shift value pools and job markets, and require diverse skills and capabilities 
in different geographies. Sasol will progress a just transition across its 
geographical footprint, with the aim of protecting and fostering employment 
opportunities by accelerating the development of new energy value pools. 

South Africa in particular, holds significant promise for renewables and 
low-cost green hydrogen production for own use and export opportunities. This 
will require national plans to be established by industry stakeholder and 
government to develop opportunities, maximise localisation opportunities to 
create jobs and economic wealth.

"While the workforce impact is likely to be after 2030 – this needs to be 
anticipated now, with the right long term human capital plans – managing a 
natural transition of people involved in fossil fuels related activities and 
investing in reskilling for the needs of a low carbon economy in the future," 
said Grobler.

Future Sasol's businesses
Sasol's Energy business is positioned to lead the energy transition in Southern 
Africa through its advantaged asset base with a cash breakeven oil price below 
US$35 dollars per barrel. As one of the world's largest producers of grey 
hydrogen, Sasol aims to leverage this expertise to decarbonise through lower 
carbon feedstocks and increase production of cost-competitive sustainable fuels 
and energy.

Chemicals will pursue growth opportunities through its unique chemistry, 
specifically in FT and Ziegler-Alumina-Guerbet technologies. With its Lake 
Charles plants now fully operational, Sasol has clear pathways to generate 
attractive cash flows, as capacity ramps up. It will accelerate growth in more 
specialty solutions and sustainable chemicals, particularly Essential Care 
Chemicals and Advanced Materials, where Sasol already has leading market 

Sasol ecoFT, will focus on building new sustainable businesses by leveraging FT 
technology. Currently, FT uses fossil-fuel based sources of hydrogen and 
carbon. This technology has the potential to use green hydrogen and sustainable 
sources of carbon feedstock, such as biomass, carbon captured from carbon 
intensive processes and eventually direct air capture.

"Our FT technology, at the heart of our Southern Africa value chain, positions 
us well, to decarbonise through lower carbon feedstocks and to ramp-up the 
production of cost competitive sustainable fuels and chemicals," said Grobler. 

Self-funding the transition, while delivering sustainable returns

Sasol's refocused strategy is underpinned by a financial framework that will 
enable the company to grow shared value, while accelerating its transition, as 
sustainable and resilient dividends are restored to our shareholders. 

"Through our clear and updated capital allocation framework and governance 
structure, we will ensure effective and efficient decision making to navigate 
all the capital decisions we face in delivering Future Sasol," said Paul 
Victor, Group Chief Financial Officer of Sasol.

In the short to medium term, the first phase up to 2025 will see Sasol 
strengthen its balance sheet, while improving cost-competitiveness and ability 
to increase cash flow generation in a low oil price scenario. Sasol targets to 
improve return on invested capital (ROIC) to between 12 and 15% in this period.

The second phase in the short to medium term up to 2030 prioritises the balance 
between returns and investing in Sasol's transition plan. In this period up to 
2030, Sasol plans to invest between R20 to R25 billion per annum to maintain 
its asset base, comply with all relevant environmental and air quality 
regulations, as well as fund the transition to reach the 30% GHG emissions 
reduction target. This includes a total of R15 to R25 billion in aggregate 
transformation capital up to 2030, while targeted ROIC is anticipated to be 
above 15%.

"The overall Sasol group return profile will continue to improve significantly 
and remains attractive – there is a clear pathway through to higher returns 
while we achieve our climate change objectives," added Victor.

Dividends will be resumed once key triggers are reached and there is confidence 
that these returns delivered to shareholders are sustainable based on the 
prevailing outlook at that time. The minimum pay-out of 2,8 times or 36% of 
Core Headline Earnings Per Share (CHEPS) will be triggered when a leverage 
ratio of 1,5 times Net Debt to EBITDA is reached and the absolute debt 
level is below US$5 billion. The step-up to 2,5 times or 40% of Core HEPS will 
follow when absolute net debt levels reduce to below US$4 billion. The regular 
dividend will be maintained in this range.

Issued by: 
Matebello Motloung, Manager: Group Media Relations
Direct telephone: +27 (0) 10 344 9256; Mobile: +27 (0) 82 773 9457 

About Sasol:
Sasol is a global chemicals and energy company. We harness our knowledge and 
expertise to integrate sophisticated technologies and processes into 
world-scale operating facilities. 

We safely and sustainably source, produce and market a range of high-quality 
products in 27 countries, creating value for stakeholders. Our Purpose 
'Innovating for a better world' compels us to deliver on the triple bottom line 
outcomes of People, Planet and Profit, responsibly and always with the intent 
to be a force for good. 

We have prioritised four Sustainable Development Goals to ensure our business 
is environmentally, socially and economically sustainable.

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Within our company, only Sasol Group Media Relations will receive your Personal 
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discussed more fully in our most recent annual report  on Form 20-F filed on 24 
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Source: Sasol Limited