Home South African State draws line in sand on just transition to save jobs

State draws line in sand on just transition to save jobs

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DMRE Deputy Director-General Tseliso Maqubela says the country can’t afford to make abrupt energy changes amid global economic conflagration.

Picture: Bloomberg

THE GOVERNMENT has given the strongest indication yet that it will not be swayed by the Just Transition dictates of European countries as South Africa navigates its own path midst escalating fuel prices, maintaining jobs in the coal sector, stabilising risk-prone Eskom, a tentative vehicle manufacturing industry and a dwindling food basket.

This despite South Africa signing a deal last year with Germany, the US, the UK and France have struck a deal worth more than R130 billion aimed at speeding up the country’s shift away from coal and to reduce domestic carbon emissions to within a target range of between 420 CO2-eq and 350 CO2-eq by 2030 – in line with the goals of the Paris Agreement.

Speaking at the collective bargaining conference of the National Union of Metal of South Africa (Numsa) on Monday, Department of Minerals and Energy (DMRE) Deputy Director-General Tseliso Maqubela said on Monday the state had its hands full dealing with containing jobs in the various sectors earmarked for the transition and that better technology for coal energy cleansing was a better alternative than abrupt changes.

“We are in the midst of a global economic conflagration, we faced an energy crisis even before the geopolitical conflict between the Federation of the Russian Union and Ukraine, but the poor economic choices made by European countries on the just transition were hurried decisions. They forgot about the just transition. We maintain that we have broader choices to address the issues of rising inflation,” Maqubela said.

Maqubela said with the progression of the conflict between Russia and Ukraine, about eight percent of global production had been affected, leading to 60 percent of Russian diesel fuel not being delivered to the American market which presented the local coal industry with an advantage to supply the world market with coal which could be cleansed with new technology complying with the demands for clean energy fuel.

“This has created an artificial shortage, the sanctions on the confederation of Russia were short-sighted, they produced unconceived consequences. Russia produced over 10 million barrels of oil a day, seven million of that have now been cut off from the supply chain, that is about 8 percent of global production, what happens when you cut off that much supply? The cost of food production has gone up, it is the working class that suffers, wheat prices are going up because South Africa to a large extent utilises wheat from Russia and Ukraine” Maqubela said.

He said the intervention announced last month by Finance Minister Enoch Godongwana to reduce the fuel levy by R1.50, even if temporarily, amounted to a R6 billion blow to the fiscus, which was unsustainable, and government was adamant not to cut off jobs in the fuel retail sector, meaning that whatever changes were wrought by developments in the just transition had to accommodate job creation in fuel retail, and that self service stations, even the development of the electric car industry had to accommodate the service station jobs.

On Eskom, Maqubela said the rising tariff structures had to be watched closely to not catch out the working class as it battled with over-arching costs.

“The rate of tariff increases must be loosely monitored. It is up to Eskom and Nersa ( National Energy Regulator of South Africa) to monitor the price and keep it in check. If we raise the tariffs, we will face challenging times. We are part of the global energy supply chain. The geo-politics affect us all,” he said.

Maqubela said the R131bn endowment to the local sector for just transition was misunderstood by the country as it appeared to be more than what it was.

“If we took that R131 billion and used it to help train workers in just transition processes… We believe the offer was made without proper understanding what it would do for the just transition. We could use that money to train workers in Mpumalanga for the just transition so they do different jobs enabling the just transition,” he said.

According to energy industry discussions across the fossil fuel, nuclear, wind, solar, gas and hydrogen sectors, the just transition is about a rapid changeover from 2030 to 2050 from what fossil conservatives consider near unlimited and readily available coal resources to a heady cocktail of renewable energy mix, which is yet to win an argument on affordability.

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