Transitioning SA's Petrochemical Value Chain

Sasol is systemically important to the South African economy and society in a number of respects. Sasol’s history is intertwined in the working of the Apartheid state, hence the company’s transformation in line with South Africa’s Black Economic Empowerment initiatives has been an imperative.

The liquid fuels and chemicals value chains are central to the way society is structured and functions. The country’s apartheid past produced cities highly segregated with the majority of the population living far from centralised places of work. This implies long commutes for high numbers of people. At the same time, appropriate public transport infrastructure was not developed to adequately provide for this situation. South Africa is a relatively thinly populated country, with significant distances between major centres, again determining transport patterns. In more recent times, inadequate attention to the maintenance and expansion of transport infrastructure has locked people and freight into transport based on liquid fuels, or travel by foot.

Currently, therefore, liquid fuels play a critical role in mobility in the country. However, Paris-aligned decarbonisation implies that liquid fuels will need to largely disappear globally for transport by mid-century. Alternatives include a switch to EVs, a modal shift (from road to rail), and demand reduction through design and efficiency measures. All of these options have societal impact, particularly when mapped onto a society with the level of equality of South Africa’s. Similarly with chemicals, these are used in every facet of modern living in the country. Again, a combination of demand reduction and production and product switching will be required, with corresponding societal implications. Social drivers for change will be critical, together with an acknowledgement that people don’t like change (Government Engagement).

On a macro-economic level, both Sasol and the petrochemicals value chain are highly interlinked with the South African economic and financial systems. This is considered in greater detail the Techno-Economic section.

Getting the timing right is critical for aligning with the international part of the transition (Labour Engagement). South Africa does not want to be caught with a vehicle fleet it can’t run due to lack of fuel without sufficient transport alternatives. This speaks to the need to balance rapid decarbonisation with ensuring people and economies are not left stranded – making sure that decarbonisation decisions are not put above the imperative of just transition (Business Engagement).