Over the past 10 years, South African businesses have earned R22 billion in tax incentives while avoiding 27 megatons of greenhouse-gas (GHG) emissions and reducing their energy costs. Business owners have two more years to get a tax break for doing their bit to keep climate change in check.

What does a brick works, premium food retailer, gold mine and bus company have in common? The answer is huge savings in energy costs and significant tax breaks thanks to taking advantage of the 12L tax incentive contained in South Africa’s Income Tax Act.

The incentive came into effect on 1 November 2013, and a decade later 117 companies have implemented around 313 projects under its provisions. Some of the results are staggering. Harmony Tshepong Gold Mine reduced its income tax liability by R5,7 million in the 2017 financial year with energy-saving projects that cut its electricity bill by R4,5 million, reduced consumption by 6 000MWh and avoided 5 640 tons of GHG emissions.

Food retailer Woolworths invested R100 million in 2015 and has since saved more than 20 000MWh of electricity, amounting to around R35 million. More than 19 000 tons of CO2 had not ended up in the atmosphere as a result.

The Golden Arrow Bus Company in Cape Town and Algoa Bricks in Gqeberha are smaller scale success stories. Golden Arrow reduced its energy consumption by 2,5% by improving the fuel efficiency of its fleet. In the 2017 financial year, the company saved R1,8 million and avoided 2 014 tons of CO2. Having upgraded one its kilns, Algoa reduced its energy consumption by 19% in its 2018 financial year.

“These four very different case studies show the universal relevance of the 12L Tax incentive,” says Stalin Ndlovu, senior M&V advisor at the South African National Energy Institute (SANEDI), the agency tasked with administering the 12L Tax incentive on behalf of the National Treasury and SARS.