Minister Edna Molewa’s speech on the occasion of the of the inauguration of the World’s largest oxygen production unit at Sasol, Secunda
26 March 2018
Premier of Mpumalanga Province, Ms Refilwe Mtsweni;
Mayor of Govan Mbeki Municipality, Cllr Thandiwe Ngxonono;
Mr Bongani Nqwababa and Mr Stephen Cornell, Sasol’s Joint Presidents and Chief Executive Officers;
Mr Matthieu Giard, Air Liquide’s Executive Vice-President: Africa, Middle East and India;
Community leaders and members of the community;
All Sasol’s Executives and employees;
Ladies and gentlemen:
It gives me great pleasure to be part of this celebration where we are inaugurating Air Liquide’s 17th Oxygen Train, the World’s largest oxygen production unit here in Secunda, Mpumalanga today.
This occasion marks one of the great strides in our ongoing efforts as a country to encourage both local and international investments to grow the economy, and ultimately improve the lives of South Africans.
We would like to congratulate Air Liquide and SASOL on this partnership, which we understand goes back several decades. This partnership demonstrates the confidence by Air Liquide and SASOL in South Africa and is important in contributing to our industrialization objectives and economic development in the area.
What’s probably more of value to us as the Department of Environmental Affairs (DEA) is that this green field investment will surely makes a meaningful contribution to a cleaner environment by consuming less electricity and reducing carbon emissions. I have been reliably informed that this new air separation unit uses 20% less electricity which equates to avoiding approximately 200 000 tons of carbon dioxide emissions per annum. The unit has capacity to produce 5 000 tons of oxygen per day.
The addition of this new plant will improve the ability to supply oxygen and argon to the industrial gas market in South Africa. I am further informed that the production unit meets the highest standards of safety, reliability and efficiency, and includes first-of-its-kind innovation in the air compression process.
Government welcomes such investments and partnerships as we seek to build our productive capacity and capability. We acknowledge the significant role played by Sasol in attracting this two hundred million euro foreign direct investment by Air Liquide to South Africa.
Since 1994 South Africa has prioritised foreign investment to develop our country. Our government has continued to place the economy on center stage to make our country even more attractive to investments. We recently launched One Stop Shops as an intergovernmental clearing house by InvestSA for all investors to fast track, unblock and reduce red tape in government.
The One Stop Shops will be the focal point of contact in government for potential investors to obtain permits, licences and other regulatory requirements. Services offered by key departments including Home Affairs, Labour, Environmental Affairs, Trade and Industry and agencies such as Companies and Intellectual Property Commission, South African Revenue Service, Visa Facilitation Service centres will be available at the One Stop Shop.
In 2012 we adopted the National Development Plan’s (NDP) Vision 2030. This plan addresses key aspects to ensure our country’s economy changes to the one that is sustainable, climate change resilient and inclusive low-carbon. This development we are launching today, is part of implementing our NDP.
Ladies and Gentlemen,
As the world moves more rapidly towards the development of a cleaner and greener economy that promote the principles of sustainable development, there is a need to ensure efficient utilisation of resources, particularly our natural resources. This will go a long way in ensuring that the habitats, biodiversity and species that many of our people have come to depend on for their livelihoods are preserved in posterity.
Our country has moved from an environmental system that was based on the protection of natural resources in defined areas to a more holistic approach that embraces the sustainable use of our natural resource base with the objectives of addressing triple challenges of unemployment, poverty and inequality. This has been recognised in the NDP, which requires that we sustain South Africa’s ecosystems and use natural resources efficiently.
Ladies and Gentlemen,
This substantial investment of two hundred million euro will also go some way in creating jobs, both during the plant’s construction and operation. I would like to use this opportunity to encourage further investment in South Africa so that we can reach the levels of growth required to meaningfully decrease our high levels of unemployment and poverty. According to the fourth quarter, which ended in December 2017, more than 26 percent of our population is unemployed. We need more and more investments.
Distinguished guests, this is welcomed not only from an innovation and investment perspective, but also from the context of addressing the pressing challenges associated with climate change in our country.
The National Climate Change Response White Paper states that the main opportunities for the mitigation of climate change consists of energy efficiency, demand management and moving to a less emission intensive energy mix. The consequence of this includes the economic benefits of improved efficiency and competitiveness, as well as incentivising economic growth in a sector with lower energy intensities.
This policy further outlines medium-term options with mitigation potential to include significant upscaling of the energy efficiency applications, especially industrial energy efficiency, energy efficient in public, commercial and residential construction, and transport sectors.
It underscores the need to promote transport-related interventions including a transport modal shift, such as road to rail and private to public transport, and switches to alternative vehicles, including electric and hybrid vehicles.
It also highlights the use of lower carbon fuels. In this regard, this project will make a proportional contribution to our mitigation efforts.
Ladies and Gentlemen,
South Africa is making headway in mitigating the effects of, and adapting to, climate change. This is evident from the steps that have been, and continue being taken in terms of national policy and international obligations to reduce the levels of greenhouse gas emissions thus improving the lives of our people.
As a signatory to the Paris Agreement on Climate Change, which comes into effect in 2020, South Africa committed to contributing its fair share to global greenhouse gas mitigation efforts in order to keep global temperature increases below 2°C.
South Africa has committed in its Nationally Determined Contribution (NDC) to the United Nations Framework Convention on Climate Change (UNFCCC) to deviate from business-as-usual to a peak, plateau decline (PPD) Green House Gas emissions trajectory.
The latest South Africa’s Greenhouse Gas Inventory Report, 2000 – 2012 reflects that the greenhouse gas emissions (GHG) decreased slightly from 531 mega tons of carbon dioxide equivalent (Mt CO2e) in 2010 to 518.7 Mt CO2e in 2012. The Department has commissioned work to quantify and estimate the effect that various policies and measures (PAMs) will have on emission reductions in the country. This work will assist in understanding the impact of the various policies and measures that the government employ to reduce the emission.
Energy efficiency has been the largest contributor to climate change mitigation in the country, accounting for 81% of GHG emission reductions from 2010, to 2014. A number of energy efficiency projects have been implemented by Sasol, accounting for the major share of emission reductions during this period.
Thus energy efficiency measures were responsible for between 82% and 85% of the emissions reductions achieved annually between 2010 and 2014.
For business and industry, energy efficiency continues to provide the largest emission reductions for the least cost investment, followed by renewable energy. Significant GHG emissions reductions have also been achieved through the renewable energy programmes, the most important of which has is the Renewable Energy implemented currently through the Independent Power Producers Programme. Sasol has also implemented an industrial feed and fuel switch project, moving from coal to gas as a preferred fuel.
Although the Department of Environmental Affairs is the lead department for climate change response in South Africa, climate change is cross cutting and requires coordination with other government departments and institutions. Key national policies drive mitigation efforts, which in turn drive the country’s mitigation efforts. Various government departments champion these policies and measures. These drive numerous interventions undertaken by the public and private sectors that catalyse or result in the reduction of GHGs. We are making progress in working with other government departments and organisations and have registered progress in a number of areas.
These include the National Energy Efficiency Strategy and Integrated Resource Plan under the Department of Energy and the Department of Trade and Industry’s Incentives Schemes aimed at driving growth, foreign direct investment and promoting competitiveness in the manufacturing sector in line with the country’s Industrial Policy Action Plan (IPAP) and the National Industrial Policy Framework (NIPF).
South Africa’s greenhouse gas emission reduction system is being implemented in phases. The duration of Phase One is five years, extending from 1 January 2016 to 31 December 2020.
In this regard, the development of phase 2 of the mitigation system, to achieve reduction of greenhouse gas emissions, is currently underway, and will include a range of measures as contemplated in the National Climate Change Response Policy, aimed at achieving the long term emissions trajectory range for the whole economy to “peak between 2020 and 2025, plateau for a decade, and decline there-after”.
In 2015 the department initiated the process of allocating carbon budgets to significant emitters of greenhouse gases. The first phase (2016-2020) Carbon Budgets are voluntary, and will become mandatory from 2021. Companies allocated carbon budgets in Phase One will be required to prepare and submit Pollution Prevention Plans/Mitigation Plans indicating how they plan to achieve their carbon budgets. The National Greenhouse Gas Reporting Regulations have also been developed with the main objective of making it mandatory for companies to report their greenhouse gas emissions.
Ladies and Gentlemen,
I am pleased to say that DEA uses some of the Air Liquide gases in our work in environmental monitoring, especially as reference gases in the analysers, where we use this for ambient air quality monitoring – although in a much smaller scale than what this plant will present in our economy.
Over and above, the socio-economic benefits, the establishment of this plant holds profound environmental benefits for Sasol and the country and the rest of the world, in the long-term. This development will most certainly reduce the greenhouse gas emissions and create a healthier and cleaner environment for all our people.
Let me reiterate that our Government welcomes such investments and partnerships as we seek to build our productive capacity.
I hereby declare the World’s Largest Oxygen Production unit here at Secunda officially launched.