South African cement company PPC (PPCJ.J) said it expects to pay as much as 120 million rand ($8.5 million) per year due to the new carbon tax and will shut down a kiln at its Port Elizabeth plant to adhere to new emission standards.
The carbon tax, which seeks to lower emissions in order to meet agreements on global climate change, comes at a time when local construction companies have struggled to make money in an industry squeezed by South Africa’s weak economy and a pullback in infrastructure spending by the government and private sector.
PPC, which reported Thursday that revenue rose 1% to 10.4 billion rand, that it expected to pay between 100 million and 120 million rand per year due to the tax, which came into effect on June 1.
“I think it’s something that we as a country need to debate as to whether this is the right time for carbon tax, be that as a company we support cleaner environment,” said PPC managing director Njombo Lekula.
PPC, which operates across six African countries, will also shut down the kiln at their Port Elizabeth (PE) plant to keep in line with new minimum emission standards for nitroxides and dust emissions.
The company stated that about 30 jobs would be impacted by the shutdown and that they did not expect any further retrenchments.
“All our other kilns are compliant in terms of the nitroxide and dust emissions but the PE kiln, [which] because of its technology, was impossible to take it down,” he said.
PPC plans to introduce mixed-cement products with lower levels of clinker, a stony residue from burned coal ground into cement, in order to reduce the level of dust emissions from their products.
Minimum emission standards were first introduced by the South African government in 2010 to limit the amount of air pollution allowed by industries in order to limit negative impacts on human health. All existing industries were required to comply with the first round of requirements by 1 April 2015 and stricter requirements by 1 April 2020.