The Department of Mineral Resources and Energy (DMRE) has published the Draft Framework for the Development, Assessment and Approval of Domestic Carbon Offset Standards for public comment from January 27 to February 28.

The draft framework sets out the requirements, criteria for selection, evaluation and approval of domestic standards to complement three international standards, while balancing government’s interests in protecting the integrity of its greenhouse-gas emissions mitigation objectives.

The draft framework is based on a set of key principles and objectives, including those that are broadly applicable to all international and domestic offsets and set criteria which encompass governance and administration; environmental integrity; and social, economic and environmental effects.

The draft framework sets out underlying principles and goals for the development of offset standards, the necessary components of a candidate offset standard and the evaluation criteria to be applied by the framework.

It also establishes the process by which the framework can be implemented, including the composition of the Technical Committee responsible for its application; and application of the framework to the three approved international offset standards.

South Africa introduced a carbon tax in June 2019 as part of a package of policy measures to help achieve the Cabinet-approved Nationally Determined Contribution commitments submitted under the global Paris Agreement.

To assist industries to transition their activities and shift to sustainable and low-carbon practices in a cost-effective manner, a carbon offset tax-free allowance is provided for companies under the Carbon Tax Act to help reduce their carbon tax liability and encourage additional investments in eligible low-carbon offset projects.

Carbon offset projects developed under three international carbon offsets standards are eligible for use by companies to reduce their carbon tax liability.