25/05/2023
SPEAKER BRIEFING NOTES AT THE INTERNATIONAL TRANSPORT FORUM (IFS) IN GERMANY-LEIPZIG
TOPIC: THEMATIC FOCUS – “BOOSTING SUSTAINABLE ECONOMIES THROUGH GREENING TRANSPORT”
A. SESSION OUTLINE
i) The thematic focus for this year’s Open Ministerial is:
“Boosting sustainable economies through greening transport”
Aligning prosperity with sustainable mobility is essential to contain climate change and maintain a strong economy. This is reflected in many Covid-19 national recovery plans that aim to ensure that economic growth is combined with shifting mobility behaviour and the scaling up of low-carbon technologies. The session will address the need for transformational change in the transport sector, including the urgency of significant behavioural change. It will explore how economic growth can be rendered more sustainable by decarbonising transport and reducing other environmental externalities of transport, such as its effects on biodiversity, air quality, and health.
STRUCTURE OF THE DISCUSSION OF THE OPEN MINISTERIAL SESSION
The session will be structured as follows:
a. Opening
• Opening remarks by the ITF’s United Kingdom Presidency
• Short report on the ITF’s High-level Policy Dialogues respectively on Asia
(Cambodia), Ukraine (Poland), and LAC (Argentina).
b. Ministerial Discussion:
“Boosting sustainable economies through greening transport”
c. Presentations by keynote speakers and discussion.
Following the intervention of Ms. Vittadini, the Moderator will open the floor for questions and invite all Ministers to exchange with the speakers and/or to share their experience and practice with regard to the theme.
The interventions communicated to the Secretariat in advance and signalled to the Moderator by raising the country flag) are limited to 3 minutes, and spontaneous interventions to make or react to a point (signalled to the Moderator by raising the country flag) are limited to 2 minutes.
B. What is the current state of low-carbon transport across different countries and regions of the world?
Combating the effects of climate change, reducing the carbon footprint of transport has become a top priority. Greenhouse gas emissions from the transport sector already account for 20% of the world’s total, and could increase by 60% over the next 30 years in the absence of rapid and decisive action, however many of the policies and technologies that are needed to decarbonize transport already exist.
Globally, the transport sector enables economic growth and industrial development by facilitating the movement of people and goods, but the sector is a major emitter. In 2019 the transport sector was responsible for almost 25% of global emissions. Even with decreases in transport demand linked to the COVID-19 pandemic, the transport sector still contributed approximately 20% to global emissions in 2020, and is expected to return to similar levels beyond 2023.
C. What measures, including transformative policies, are required to support the green transition of transport?
South Africa will have the chance to tap into new opportunities. It has been estimated that around 35% of the decarbonisation of global anthropogenic greenhouse gas emissions is reliant on access to clean power generation, and that lower-carbon hydrogen and clean fuels will be required for hard-to-decarbonise sectors. South Africa has key strategic advantages which can be leveraged to tap into such emerging opportunities. It has a number of significant assets including sun, wind and space. Renewables-dominated energy systems and local manufacturing are key. The country’s stable and well-regulated financial services sector, among the most competitive in the world, would make a strong base for green finance for the continent. The combination of wind and solar enables the right kind of conditions for Green hydrogen (Green H2), setting the stage for South Africa to be a net exporter. The role of PGMs in hydrogen and fuel cell technology and the increased demand for certain mined commodities, like copper for use in green technology, could bolster the minerals sector. Whether it be promoting mass transit, cycling, and walking, investing in electric vehicles and sustainable fuels, or rethinking the way we design our cities, there are many ways we can start decreasing the climate impact of transport
D. What are effective policies to maximise the value of clean energy technology, while maintaining accessibility for users, and reducing carbon emissions?
Green Transport Strategy is already an effective tool that has been utilised by government to ensure that the sector is reducing its carbon footprint and also implementing the usage of new energy efficient technologies to assist with decarbonising the transport sector. As a direct intervention into combating the effects of climate change directly correlated to transportation systems, South Africa’s Green Transport Strategy (GTS) is the current policy roadmap for informing low carbon transport policy in South Africa; and it strives for a coherent and consistent approach to address emissions mitigation from transport systems. The GTS promotes low carbon alternatives but potentially counterproductive measures are tabled which may defer or avoid investment in zero GHG emissions alternatives due to the likelihood of technology and supply chain infrastructure lock-in.
The strategy promotes green mobility to ensure that the transport sector supports the achievement of green economic growth targets, and protecting the environment by lowering emissions by 5% by the 2050.
The Auto Green Paper on the Advancement of New Energy Vehicles in South Africa is a brilliant example of the policies that have been taken by the South African market to incrementally decrease emissions from the transport sector. The Green Paper also explores appropriate levels of support and infrastructure investment to encourage electric vehicle uptake - within the context of wider economic recovery efforts through market stimulus and supply chain support measures. An investment and a tax system that helps build a resilient raw material supply chain will support South Africa’s efforts to be a global player of new energy vehicle manufacturing. And perhaps most importantly of all, we need to retain preferential trade access with some of our major trading partners that will allow us to maintain our global competitiveness and foster innovation.
The purpose of the New Energy Vehicle [NEV] green paper is to establish a clear policy foundation that will enable the country to coordinate a long-term strategy that will position South Africa at the forefront of advanced vehicle and vehicle component manufacturing, complemented by a consumption leg, and increase our competitiveness in the global race to transition from the internal combustion engine era into electro-mobility solutions and technologies.
The NEV green paper also has the following key interventions:
• creation of a high-yielding business environment, including an appropriate fiscal and regulatory framework, that makes South Africa a leading and a highly competitive location, not only within the African continent but globally, for electric vehicle production;
• support and investment in the expansion and development of new and existing manufacturing plants to support the production of new energy vehicles and components within South Africa and to grow the level of employment in the sector;
• development and investment in new energy vehicle component technology and expansion of the fledgling electric supply chain, by increasing support and investment in a set of unique NEV components;
• reinvestment and support towards reskilling and upskilling of the workforce to ensure the right skills are available for the design, engineering and manufacturing of electric vehicles and related components and systems;
• the transition of South Africa towards cleaner fuel technologies available globally [CleanFuels2];
• adoption of new and sustainable manufacturing processes to significantly reduce greenhouse gas emissions and improve our environmental wealth; and
• ensuring that that Research and Development [R&D] investment is strategically targeted at activities that are likely to give South Africa a competitive advantage.
E. How can the transition to net-zero transport address adaptation needs and broader social and well-being goals?
South Africa is highly vulnerable to the impacts of climate change and will need significant international support to transition its economy and to decarbonise. Furthermore, given the country’s high rate of inequality, poverty and unemployment and the extent of dependence on a fossil fuel-based energy system and economy, this transition must take place in a way that is just, that leaves no-one behind and that sets the country onto a new, more equitable and sustainable development path; one which builds new local industries and value chains.
The National Development Plan 2030 calls for South Africa to transition to low-carbon economy and climate-resilient society. Transitioning South Africa to an equitable, resilient, low-carbon green economy will require the range of economic actors each to act strategically and decidedly towards this in a coordinated manner.
South Africa's public transport systems form the backbone of the country’s socio-economic activities by enabling the movement of people and products, and by providing essential services to businesses. The transport and logistics industry contribute significantly to the country’s GDP and offers an essential service to other sectors identified as critical drivers of economic growth in the country’s Economic Reconstruction and Recovery Plan (ERRP), especially mining, agriculture and manufacturing as well as tourism amongst others.
The global transport sector’s emission footprint is driven by the sector’s reliance on fossil fuels, with 90% of transport energy needs in 2020 met with oil. Beyond managing the demand for transport, decarbonising transport will require the shifting to more efficient transport modes and the scale-up of decarbonised, net-zero compatible modes of transport.
In showing political leadership and direction with regards to tackling climate change, President Ramaphosa established the Presidential Climate Commission with the aim to coordinate and oversee a “Just Transition” to a low carbon economy and climate-resilient society for the country. The overall objective of the PCC is to advise and guide South Africa’s climate change response to ensure the realisation of the policy objectives of building a sustainable social, economic, and environmental resilience and emergency response capacity, and a fair contribution to the global effort to stabilise Greenhouse Gas (GHG) concentrations in the atmosphere at the acceptable level as depicted by science.
To this end, the PCC has spearheaded the development and approval of the following:
a) SA Nationally Determined Contribution (NDC), which was communicated to the United Nations Framework Convention on Climate Change (UNFCCC) outlining South Africa’s commitment in terms of response to climate change and a pathway to net-zero carbon emissions by 2050.
b) The SA Just Transition Framework (JTF) which sets out the actions that the government and its social partners will take to achieve a just transition, and the outcomes to be realised in the short, medium, and long term. The Framework sets out the vision, principles, planning elements, and policy measures that endeavour to ensure that the transition to a low-emissions economy is well-managed, just, and equitable, with a particular focus on the poorest and most vulnerable.
F. What is required to incentivise private sector capital to support the green transition (e.g. carbon pricing, regulatory certainty, public financing)
Decarbonising transport will also mean embracing policies to avoid unwanted or unnecessary trips and shift journeys to lower carbon modes, which will require a comprehensive policy and behavioural changes linking investments, policy, behaviour and technology within the transport sector. In 2020 transport was the largest energy consuming sector in 40% of countries worldwide and the second-largest energy consuming sector in most remaining countries; thus, transport is a key sector for reducing overall emissions.
South Africa uses the tax-based model/system in order to generate revenue and sustain its economy. Related to transport, the current fuel tax regime in South Africa applies to petrol, diesel and biodiesel based on volume (per litre) to help achieve various policy objectives. Petrol, diesel and biodiesel are classified as fuel levy goods and zero-rated for value added tax (VAT) purposes. The current fuel taxes imposed include the fuel levy (FL), the Road Accident Fund (RAF) levy, and the customs and excise levy (C&E) which are collected in terms of an agreement by the SACU.
South Africa has implemented a carbon tax initiative to implement punitive measures for carbon intensive sectors. Responding to climate change, Carbon Tax was introduced in 2019 with the aim of reducing greenhouse gas emissions in a sustainable, cost-effective and affordable manner. Carbon Tax gives effect to the polluter-pays principle and to ensure that firms and consumers take the negative adverse costs of climate change into account in their future production, consumption and investment decisions. The first phase has a carbon tax rate of R120 per ton of carbon dioxide equivalent emissions. This rate will increase annually by inflation plus 2 per cent until 2022, and annually by inflation thereafter. The carbon footprint of transportation is measured in grams of carbon dioxide (CO2) equivalents emitted per person to travel one kilometer. This includes both carbon dioxide and other greenhouse gases.
South Africa’s stable and well-regulated financial services sector, among the most competitive in the world, would make a strong base for green finance for the continent. The combination of wind and solar enables the right kind of conditions for Green hydrogen (Green H2), setting the stage for South Africa to be a net exporter. The role of PGMs in hydrogen and fuel cell technology and the increased demand for certain mined commodities, like copper for use in green technology, could bolster the minerals sector.
B. What financing models is South Africa deploying to support delivery of these plans?
The cost of implementation and level of effort to decarbonise the transport sector will be significantly lower if a large number of cities, throughout the world, move synergistically in the same coherent direction. Much of the cost of transport sector transformation will need to be borne by partnerships between government and private sector, as well as investors in new technologies and services. The private sector also has the potential to disseminate low-carbon transport oriented economic and behavioural paradigms throughout the world, in particular through the operations of multi-national companies.
Aside from the fiscus the Department of Transport is looking at the following financing instruments that can be utilised to advance the green mobility element within the transport sector.
The Green Climate Fund, employs part of its funds to help mobilise financial flows from the private sector to compelling and profitable climate-smart investment opportunities. The GCF was established by 194 governments to limit or reduce greenhouse gas (GHG) emissions in developing countries, and to help vulnerable societies adapt to the unavoidable impacts of climate change. Given the urgency and seriousness of this challenge, GCF is mandated to make an ambitious contribution to the united global response to climate change.
The Global Environment Fund, through the goal of the two GEF-7 climate change objectives, which are to promote innovation and technology transfer for sustainable energy breakthroughs for electric drive technologies and electric mobility.
Donor Funding through multilateral/bilateral agreements with like-minded countries,
The Green Mobility Facility for Africa, which is intended to increase the number of bankable green projects within the transport sector in Africa, by catalysing private sector investment to contribute to the development low-carbon transport in Africa. The projects will also be aligned with the overall goal of decarbonising transportation and reducing the emission from the sector.
The GMFA is thus focused on means of implementation to ensure that a low-carbon transport system is developed across all areas. The facility will also contribute to the transport mitigation measures and initiatives as identified in the South African Nationally Determined Contribution (NDC’s).
INTERVENTION:
For the transport sector, substantial GHG emission reduction could be demonstrated by:
a) Increasing the number of low- and zero emission fleets, and improving fleet efficiency;
b) Improving efficiency of the overall transport/mobility system; and
c) Increasing substitution of fossil fuels with sustainable alternative and net-zero carbon fuels.
Through governments commitment to reducing emissions, the transport sector is also participating in the reduction of emissions associated with the transportation system.
Limpopo Provincial Government
South African Government
Department of Transport
