JOHANNESBURG, Sept. 22, 2021 /PRNewswire/ -- Sasol Limited
(Sasol) today announced its updated strategy that commits it to be
at net zero emissions by 2050. This is in line with Sasol's
commitment to accelerate its transition to a low carbon world in
support of the objectives of the Paris Agreement.
In aligning with its 2050 ambition, Sasol has stepped up its
2030 scope 1 and 2 greenhouse gas (GHG) emission reduction target,
from an initial 10% for its South African operations, announced
last year, to 30% for its Energy and Chemicals businesses, off a
2017 baseline. The company is also introducing a scope 3 reduction
target, for its Energy Business, off a 2019 baseline. This is
consistent with what its peers have committed to.
"Based on detailed assessments and modelling, our 2030 target
can be delivered without divestments and offsets, but through the
direct decarbonisation of our existing assets," said Fleetwood Grobler, President and Chief Executive
Officer of Sasol.
"This will be done through a mix of energy and process
efficiencies, investments in renewables and a shift to incremental
natural gas as a transition feedstock for our Southern African
value chain. These solutions are well known and mostly under our
control, and the investments required are cost-effective,
preserving strong returns in our business, above the cost of
capital."
Beyond 2030, Sasol has more than one viable pathway to get to
its net zero ambition by 2050, with different options to transform
its Southern Africa value chain by
progressively shifting its feedstock away from coal, towards more
transition gas, and then, green hydrogen and sustainable carbon
over the longer term, as economics improve for these options.
"In an uncertain future, this approach offers agility and
enables us to pivot as cost effective mitigation levers become
available. We are also avoiding infrastructure lock-in and regret
capital spend," said Grobler.
Sasol's proprietary Fischer-Tropsch (FT) technology, in
particular, is well suited to play a meaningful role, in a low
carbon future, with attractive new and emerging value pools.
"Against this backdrop, we are setting up a new business, Sasol
ecoFT, with the intent to build on our technology leadership, to
establish a significant market position internationally. One
of the first applications for the technology is likely to be
sustainable aviation fuels (SAF), where new regulations are driving
demand and existing technology and feedstocks, have limitations
that FT can address."
A just transition
As global economies transform their energy systems, this will
disrupt industry, shift value pools and job markets, and require
diverse skills and capabilities in different geographies. Sasol
will progress a just transition across its geographical footprint,
with the aim of protecting and fostering employment opportunities
by accelerating the development of new energy value pools.
South Africa in particular,
holds significant promise for renewables and low-cost green
hydrogen production for own use and export opportunities. This will
require national plans to be established by industry stakeholder
and government to develop opportunities, maximise localisation
opportunities to create jobs and economic wealth.
"While the workforce impact is likely to be after 2030 – this
needs to be anticipated now, with the right long term human capital
plans – managing a natural transition of people involved in fossil
fuels related activities and investing in reskilling for the needs
of a low carbon economy in the future," said Grobler.
Future Sasol's businesses
Sasol's Energy business is positioned to lead the energy
transition in Southern Africa
through its advantaged asset base with a cash breakeven oil price
below US$35 dollars per barrel. As
one of the world's largest producers of grey hydrogen, Sasol aims
to leverage this expertise to decarbonise through lower carbon
feedstocks and increase production of cost-competitive sustainable
fuels and energy.
Chemicals will pursue growth opportunities through its unique
chemistry, specifically in FT and Ziegler-Alumina-Guerbet
technologies. With its Lake Charles plants now fully operational,
Sasol has clear pathways to generate attractive cash flows, as
capacity ramps up. It will accelerate growth in more specialty
solutions and sustainable chemicals, particularly Essential Care
Chemicals and Advanced Materials, where Sasol already has leading
market positions.
Sasol ecoFT, will focus on building new sustainable businesses
by leveraging FT technology. Currently, FT uses fossil-fuel based
sources of hydrogen and carbon. This technology has the potential
to use green hydrogen and sustainable sources of carbon feedstock,
such as biomass, carbon captured from carbon intensive processes
and eventually direct air capture.
"Our FT technology, at the heart of our Southern Africa value chain, positions us
well, to decarbonise through lower carbon feedstocks and to ramp-up
the production of cost competitive sustainable fuels and
chemicals," said Grobler.
Self-funding the transition, while delivering sustainable
returns
Sasol's refocused strategy is underpinned by a financial
framework that will enable the company to grow shared value, while
accelerating its transition, as sustainable and resilient dividends
are restored to our shareholders.
"Through our clear and updated capital allocation framework and
governance structure, we will ensure effective and efficient
decision making to navigate all the capital decisions we face in
delivering Future Sasol," said Paul
Victor, Group Chief Financial Officer of Sasol.
In the short to medium term, the first phase up to 2025 will see
Sasol strengthen its balance sheet, while improving
cost-competitiveness and ability to increase cash flow generation
in a low oil price scenario. Sasol targets to improve return on
invested capital (ROIC) to between 12 and 15% in this period.
The second phase in the short to medium term up to 2030
prioritises the balance between returns and investing in Sasol's
transition plan. In this period up to 2030, Sasol plans to invest
between R20 to R25 billion per annum to maintain its asset base,
comply with all relevant environmental and air quality regulations,
as well as fund the transition to reach the 30% GHG emissions
reduction target. This includes a total of R15 to R25 billion in
aggregate transformation capital up to 2030, while targeted ROIC is
anticipated to be above 15%.
"The overall Sasol group return profile will continue to improve
significantly and remains attractive – there is a clear pathway
through to higher returns while we achieve our climate change
objectives," added Victor.
Dividends will be resumed once key triggers are reached and
there is confidence that these returns delivered to shareholders
are sustainable based on the prevailing outlook at that time. The
minimum pay-out of 2,8 times or 36% of Core Headline Earnings Per
Share (CHEPS) will be triggered when a leverage ratio of 1,5 times
Net Debt to EBITDA is reached and the absolute debt level is below
US$5 billion. The step-up to 2,5
times or 40% of Core HEPS will follow when absolute net debt levels
reduce to below US$4 billion. The
regular dividend will be maintained in this range.
Issued by:
Matebello Motloung, Manager: Group Media Relations
Direct telephone: +27 (0) 10 344 9256; Mobile: +27 (0)
82 773 9457
matebello.motloung@sasol.com
About Sasol:
Sasol is a global chemicals and energy company. We harness our
knowledge and expertise to integrate sophisticated technologies and
processes into world-scale operating facilities.
We safely and sustainably source, produce and market a range of
high-quality products in 27 countries, creating value for
stakeholders. Our Purpose 'Innovating for a better world' compels
us to deliver on the triple bottom line outcomes of People, Planet
and Profit, responsibly and always with the intent to be a force
for good.
We have prioritised four Sustainable Development Goals to ensure
our business is environmentally, socially and economically
sustainable.
About Sasol's Information Privacy Policy:
We wish to inform you about the processing of your Personal
Information by Sasol South Africa Limited and your rights under
applicable data protection law, as interpreted and included in
Sasol Information Privacy Policy.
Within our company, only Sasol Group Media Relations will
receive your Personal Information to fulfil the purpose of
maintaining the relationship with the receiver in his/her capacity
as a member of the media. You have the right to request for the
correction or deletion of your Personal Information stored by us at
address: Sasol Place, 50 Katherine Street, Sandton in Johannesburg. You also have a right to
restrict the processing of your Information. To exercise your
privacy rights or find out more about Information Privacy Policy,
kindly contact our Privacy Office on: privacy@sasol.com
Forward-looking statements:
Sasol may, in this document, make certain statements that are
not historical facts and relate to analyses and other information
which are based on forecasts of future results and estimates
of amounts not yet determinable. These statements may also relate
to our future prospects, expectations, developments and business
strategies. Examples of such forward-looking statements
include, but are not limited to, the impact of the novel
coronavirus (COVID-19) pandemic on Sasol's business, results
of operations, financial condition and liquidity and
statements regarding the effectiveness of any actions taken by
Sasol to address or limit any impact of COVID-19 on its
business; statements regarding exchange rate fluctuations, changing
crude oil prices, volume growth, changes in demand for Sasol's
products, increases in market share, total shareholder
return, executing our growth projects, oil and gas reserves, cost
reductions, legislative, regulatory and fiscal development, our
climate change strategy and business performance outlook.
Words such as "believe", "anticipate", "expect", "intend", "seek",
"will", "plan", "could", "may", "endeavour", "target", "forecast"
and "project" and similar expressions are intended to
identify such forward-looking statements, but are not the exclusive
means of identifying such statements. By their very nature,
forward-looking statements involve inherent risks and
uncertainties, both general and specific, and there are risks that
the predictions, forecasts, projections and other
forward-looking statements will not be achieved. If one or more of
these risks materialise, or should underlying assumptions prove
incorrect, our actual results may differ materially from
those anticipated. You should understand that a number of important
factors could cause actual results to differ materially from the
plans, objectives, expectations, estimates and intentions
expressed in such forward-looking statements. These factors and
others are discussed more fully in our most recent annual
report on Form 20-F filed on 24 August
2020 and in other filings with the United States Securities
and Exchange Commission. The list of factors discussed therein is
not exhaustive; when relying on forward-looking statements to
make investment decisions, you should carefully consider both these
factors and other uncertainties and events. Forward-looking
statements apply only as of the date on which they are made, and we
do not undertake any obligation to update or revise any of them,
whether as a result of new information, future events or
otherwise.
Comprehensive additional information is available on our
website: www.sasol.com
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SOURCE Sasol Limited