MechTech May 2016 Final

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Heating, cooling, ventilation and air conditioning

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Mechanical Technology — May 2016

Prepare now for the

Carbon Tax Bill

n November 2015, the National Trea-

sury published the Draft Carbon Tax Bill

for public comment. Once implemented,

the Bill will penalise companies with exces-

sive green house gas (GHG) emissions,

motivating them to shift towards cleaner,

more energy-efficient technology.

This is a revolutionary step for South

Africa and forms part of the country’s

commitment to reduce GHG emissions by

34% by 2020 and by 42% by 2025, in

line with international guidelines set by the

United Nations.

As outlined in the draft bill, the initial

marginal carbon tax rate will be R120/t of

e (carbon dioxide equivalent), but the

actual thresholds are much lower – ranging

between R6.00 and R48/t – as outlined

below.

To allow transition time to implement

low carbon alternatives in the first phase,

a basic percentage-based threshold of 60%

will apply, below which tax is not payable.

The following additional tax-free allowances

also apply:

• An additional 10% for process emis-

sions.

• An additional allowance for trade ex-

posed sectors, to a maximum of 10%.

• An additional allowance of up to 5%

based on performance against emissions

intensity benchmarks. These bench-

marks will be developed in due course.

• A carbon offset allowance of 5.0 to

10%, depending on the sector.

• An additional 5% tax-free allowance

will also be applied for companies

participating in Phase 1 of the carbon

budgeting system.

• The combined effect of all of the above

tax-free thresholds will be capped at

95%.

• Due to the complexity of emissions

measurement in the waste and land use

sectors, 100% thresholds have been set

i.e. these sectors are excluded from the

tax base for Phase 1.

• Taxable emissions include: emissions

from fossil fuel combustion; emissions

from industrial process and product use;

and fugitive emissions. The greenhouse

gases covered include carbon dioxide,

methane, nitrous oxide, perfluorocar-

bons, hydrofluorocarbons and sulphur

hexafluoride.

• Carbon tax on liquid fuels (petrol and

diesel) will be imposed at source, as an

addition to current fuel taxes.

• For taxation on stationary emissions,

reporting thresholds will be determined

by source category as stipulated in the

National Environmental Air Quality Act.

Only entities with a thermal capacity of

around 10 MW will be subject to the tax

in the first phase. This threshold is in

line with the proposed DEA (Department

of Environmental Affairs) GHG emis-

sions reporting regulation requirements

and the Department of Energy (DoE)

energy management plan.

The carbon tax will be administered by the

South African Revenue Service (SARS).

“Although the Carbon Tax Bill is still in

draft phase, there’s no doubt that it will

be passed. All that remains now is for

the Minister of Finance to determine the

final tax rate, exemptions and the actual

date of implementation. This means that

companies with high GHG emissions,

such as smelter plants, chemical produc-

tion plants, boiler rooms, sulphur and

coal burning power plants, to name but a

few, need to start clean-

ing up their acts by

finding cost-effective

solutions to reduce

their environmen-

tal footprints,”

Rusch says.

One effective

approach to re-

ducing GHG emis-

sions is installing

a scrubber plant

inside the facility.

“Scrubber plants are

designed to capture pol-

lutants such as carbon dioxide

at source. GHGs are then either

redirected to an underground

storage facility or reused in the

manufacturing process,” explains Rusch.

“Scrubbers are the international industry

standard for treating greenhouse gases at

source. They will not only prevent compa-

nies from paying carbon tax penalties, but

will also prevent costly treatment and re-

habilitation of water and ground resources,

fauna and flora,” says Rusch.

One of the most important factors com-

panies will need to consider when installing

a scrubber is choosing the correct material

to use for the components inside the plant.

In this aggressive chemical environment,

companies should consider using GRP

(glass-fibre reinforced plastic) components.

GRP is exceptionally durable, resistant

to galvanic and electrolytic corrosion and

can withstand continuous contact with ag-

gressive compounds. All necessary scrub-

ber equipment such as piping, ducting,

fans, scrubbers, process vessels, chimney

stacks, custom fabrications, bund walls

and related fittings can be constructed out

of GRP. IWC is geared up to provide cus-

tomised reinforced fibreglass components

across all industries.”

IWC’s products and services include

the design, manufacture and installation

of GRP piping, fittings, tanks and other

process equipment. Additionally, IWC also

undertakes repairs and refurbishment proj-

ects and other associated services.

“To avoid massive financial penalties,

South Africa-based industries need to im-

mediately identify technologies such us

these to prepare for the implementation of

the Carbon Tax Bill,” suggests Rusch.

An effective approach to controlling and elim-

inating GHG emissions is to install a scrubber

plant to capture pollutants such as carbon

dioxide at source. GHGs are then either redi-

rected to an underground storage facility or

reused in the manufacturing process.

acting as a condenser and located in

chamber two, is cooled with cold sea

water and powers the custom-designed

SONDEX twin-ejector, which removes

non-condensable gases and brine from

the flooded evaporation process in both

stages.

The pure drinking water obtained from

the process is then directed through a

flash tank, which removes any steam

bubbles, before being pumped into stor-

age tanks using a freshwater pump.

Adds Rusch: “Each chamber is

equipped with a demister that removes

water drops and salt from the steam pro-

duced in stage one as well as stage two.

This results in high quality freshwater

from both condensers.

“This system produces up to 150 t of

drinkable water per day. Typical applica-

tions are off-shore rigs, passenger ships,

land-based industries located near the

ocean and other places where heat is

expensive to create,” he says.