South Africa may have to ban the sale of new internal combustion (ICE) vehicles by 2035 and shift as much as 20% of road traffic to rail to meet its committed climate goals submitted at COP26.
This is according to a new report by the National Business Initiative, in partnership with Business Unity SA and Boston Consulting Group.
The report aimed to better understand how South Africa could achieve its revised Nationally Determined Contribution (NDC) to the United Nations Framework Convention on Climate Change (UNFCCC).
The revised NDC committed the country to reduce carbon emissions within a target range of 350 million tonnes to 420 million tonnes of CO²-equivalent by 2030 – a 20% to 33% reduction of current emissions – and to achieve net-zero emissions by 2050.
According to the report, South Africa faces the dual challenge of decarbonising whilst improving transport as a service for consumers and enabling other sectors to decarbonise, all while mitigating rather than exacerbating existing socio-economic challenges and seizing emerging opportunities to support its socio-economic development agenda.
Transport in South Africa is the third-largest emitting sector after energy and the metals sector, contributing about 10% of total emissions, said the report.
Close to 90% of transport emissions are from road transport. The report noted about 8 million passenger vehicles on South Africa’s roads, over 300,000 minibus taxis, 60,000 buses, and 3 million freight vehicles.
Investment needed to fix public transport infrastructure
To achieve its committed NDC goals, South Africa must build and operate an efficient public transport system, invest in rail and port infrastructure as well as improve their reliability and efficiency.
The report noted 15%–20% of road traffic needs to be shifted to rail to meet the net-zero emission goals.
South Africa has experienced a reduction in passenger and freight transport via rail due to the inadequate state of the rail network, which has seen reliance shift to “more expensive, inefficient, and carbon-intense road transport for private and commercial transport”.
The department of transport noted in the report that this results from a massive capital investment backlog and inadequate funding, obsolete and ageing infrastructure, outdated technologies, and vandalism and theft.
Consequently, South Africa’s current rail infrastructure is insufficient to meet the additional demand for rail (many trains are cancelled daily due to infrastructure and operational bottlenecks).
The report estimates that repairing and developing new rail infrastructure will require investments of at least R300 billion. Given the country’s constrained balance of payments, it would need to be carefully managed and strategically prioritised.
Public-private partnerships could help in addressing the significant investment needed to address South Africa’s rail network challenges, the report added.
Shifting inefficient road transport, with high levels of road congestion, to more efficient rail transport could increase the accessibility of public transport by improving affordability, as rail transport is 30%–50% cheaper per passenger than MBTs.
In addition, the corresponding impact on the 430,000 jobs linked to the MBT industry and 260,000 jobs related to the freight sector would need to be carefully managed.
Ban petrol and diesel cars
In addition to the investment into the public transport sector, the report also noted South Africa needs to ban ICE vehicle sales.
This includes a ban on ICE vehicles for passenger (public and private) and freight use from 2035 and hybrid vehicle sales by 2040.
The report added that this needs to be supported with the development of supporting zero-emission vehicle (ZEV) infrastructure – at the cost of R4 billion.
“South Africa needs to develop a roadmap with construction targets per geography. Initial projections show that around 100,000 public charging units are required by 2030,” it said.
However, the report noted that consumer preferences cannot be easily influenced. Thus, significant incentives and disincentives are required to ensure the uptake of new energy vehicles in the short term.
An example is partnerships with the finance sector to provide bespoke financial products for EVs (e.g. green discounts on EV lending rates to reduce the upfront cost burden on consumers).
However, the report added that it is not only on the demand side that South Africa needs to shift to EVs. About 60% of local vehicle production is exported, of which 60% is to European markets.
The country risks losing these markets as trade partners implement their low-carbon commitments. This risk could see the local automotive manufacturing sector “collapse as it gets out of sync with key export markets”.
“Therefore, South Africa needs to establish local battery-electric vehicle (BEV) manufacturing capacity to maintain the local market and sustain and grow the export market, both of which are critical for the operations of automotive manufacturers in South Africa,” the report said.
“While South Africa has leveraged a degree of climate finance from the international community – SA’s R1.5 trillion Just Energy Transition Investment Plan – the scale and depth of the transition envisaged will require additional investments over an extended period.”
Critically, social costs and Just Transition costs must be factored in. Significant financial, technological, and capacity support will be required to decarbonise hard-to-abate sectors. Early interventions in these sectors will be critical, the report added.
For those interested, the full report can be accessed below.
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