South Africa’s carbon tax has remained intact in the 2026 budget, despite proposals from Energy Minister Kgosientsho Ramokgopa to suspend it amid pressure from fossil fuel lobbies. The tax increased from R236 to R308 per tonne of carbon dioxide equivalent as of 1 January 2026, continuing its role in climate mitigation efforts. Debates persist on its economic impacts and alignment with job creation needs.
South Africa’s carbon tax, introduced under the 2019 Carbon Tax Act based on the “polluter pays” principle, faced potential suspension following reports in early February 2026 that Energy and Electricity Minister Kgosientsho Ramokgopa was developing a proposal to pause it. This move came under pressure from fossil fuel lobbies, including documented private meetings by companies like Sasol with the Treasury between December 2024 and January 2025.
Civil society groups, such as Just Share, urged the Presidency to resist any rollback, highlighting patterns of corporate lobbying that had previously weakened tax proposals. In the 2026 Budget speech delivered by Finance Minister Enoch Godongwana on 26 February 2026, there was no mention of suspension. The budget review confirmed the tax’s increase to R308 per tonne of CO2 equivalent from R236, describing it as integral to the country’s climate change mitigation.
Robyn Hugo of Just Share expressed relief but cautioned vigilance, stating, “Vested fossil fuel interests will undoubtedly keep trying to delay and weaken the tax.” James Mackay, CEO of the Energy Council of South Africa—which represents entities including Sasol, Exxaro, and Eskom—noted the debate raises necessary questions about implementation timing amid economic recovery pressures, but affirmed support for climate commitments.
Climate scientists and researchers from the University of Cape Town, including Britta Rennkamp and Harald Winkler, argued in an opinion piece that suspending the tax would undermine the rule of law, the 2024 Climate Change Act, and South Africa’s Paris Agreement obligations. They emphasized its alignment with constitutional rights to a healthy environment and its role in the Just Energy Transition Partnership, which secures international funding for clean energy shifts. Without the tax, they warned, climate impacts could reduce GDP by up to 3.6% annually, leading to R259-billion in losses over 35 years.
Economist Peter Attard Montalto observed that lobbying has diluted some aspects but not altered the overall commitment, predicting economic arguments will soon favor decarbonization. Analyst Emily Tyler called the survival a relative relief, stressing that growth, jobs, and emissions reduction must be addressed simultaneously. No responses were received from the Presidency, Finance Ministry, or Energy Ministry by publication.
