Home · Tools · Carbon Tax Estimator
Carbon Tax
Work out what carbon tax actually costs you.
Carbon tax, disclosure demands and supply-chain pressure are landing fast. We help you measure your footprint, build a credible reduction pathway, and report it with confidence.
Delivered with
in the Alternative Prosperity group.
South Africa’s carbon tax has been in force since 2019, and the rate rises every year. Most businesses fall outside it entirely. Some are closer to the threshold than they think — and a handful are already liable without having worked out the number.
The problem is that finding out usually means a consultant. This calculator gets you to a defensible estimate on your own, in a few minutes, using figures you already have on hand.
An honest caveat
This is an estimate, not a tax return. It uses standard emission factors and the headline allowances, which is enough to tell you whether carbon tax is your problem and roughly how big. It doesn’t account for every sector-specific allowance, offset or trade exposure adjustment. If the result puts you near or over the threshold, treat it as the reason to get proper advice — not as a substitute for it.
Carbon tax in plain terms
How does South Africa’s carbon tax work?
It is an annual tax on greenhouse gas emissions from fuel combustion, industrial processes and fugitive sources, administered by SARS as an environmental levy under the Customs and Excise Act. Liability is triggered by the capacity of your installations, not by how much you actually emit — which is why many businesses are liable without realising it.
The estimator above turns your activity data into an indicative figure. What follows is how the calculation is built.
What is the rate?
R308 per tonne of CO₂ equivalent from 1 January 2026, up from R236 in 2025 — a 31% increase and the largest single jump since the tax began. That headline rate is not what most taxpayers pay, because allowances reduce the taxable portion sharply.
| Year | Rate per tCO₂e | Status |
|---|---|---|
| 2019 (from 1 June) | R120 | Enacted |
| 2023 | R159 | Enacted |
| 2024 | R190 | Enacted |
| 2025 | R236 | Enacted — final Phase 1 year |
| 2026 | R308 | Enacted — first Phase 2 year |
| 2027–2030 | R347 rising to R462 | Treasury trajectory only, not legislated |
The carbon fuel levy is a separate instrument that reaches everyone at the pump. From 1 April 2026 it is 19c per litre on petrol and 23c on diesel.
Am I liable?
You are liable if you conduct an activity listed in Schedule 2 of the Carbon Tax Act at or above the threshold set against it. For most combustion activities that threshold is a combined installed capacity of 10 MW thermal input. It is a capacity test, not an emissions test, and capacity is aggregated across the site.
- Aggregation catches people out. Six 2 MW boilers total 12 MW(th) and trigger the obligation, even though no single unit is close to the threshold.
- Some activities have no threshold at all. Cement, iron and steel, and coal mining are listed with a threshold of “none” — any emissions are liable.
- Once you are over, everything is taxed. The tax applies to the whole of that activity’s emissions, not only the portion above the threshold.
- Standby generators changed on 1 January 2026. For commercial and institutional combustion, the 10 MW(th) capacity test is replaced by a 25,000 tCO₂e annual emissions threshold.
- Not currently covered: agriculture, forestry and other land use, and waste.
What allowances reduce the bill?
Seven allowances sit in Part II of the Act, and together they are the reason the effective rate is a fraction of the headline. The combined allowance is capped at 90% for combustion emissions and 95% for process and fugitive emissions, so a portion of every liable tonne is always taxed.
| Allowance | Section | Phase 1 | Phase 2 |
|---|---|---|---|
| Basic tax-free allowance (fuel combustion) | s7 | 60% | 60% — retained to 31 Dec 2030 |
| Industrial process emissions | s8 | 10% | 10% |
| Fugitive emissions | s9 | 10% | 10% |
| Trade exposure | s10 | up to 10% | Retained, 30% trade-intensity threshold held |
| Performance (emissions-intensity benchmark) | s11 | up to 5% | up to 5% |
| Carbon budget participation | s12 | 5% | Ended 31 December 2025 |
| Carbon offsets — combustion | s13 | 10% | 15% |
| Carbon offsets — process and fugitive | s13 | 5% | 10% |
A warning worth stating plainly: Treasury’s 2024 Phase 2 discussion paper proposed cutting the basic allowance to 50% and removing the trade exposure allowance entirely. None of that was adopted. Several South African advisory sites still publish the discussion-paper table as though it were law. If a source shows a 50% basic allowance or a 25% offset allowance for 2026, it is wrong.
What else changed on 1 January 2026?
- The electricity generation levy of 3.5c/kWh was repealed, and with it the deduction generators used to claim against carbon tax. Electricity price neutrality is now maintained through continued partial deduction of the renewable energy premium, and has been extended to 31 December 2030.
- A GHG emissions-intensity benchmark of 0.94 tCO₂e/MWh applies to the electricity sector.
- The section 12L energy-efficiency savings incentive was extended to 31 December 2030.
- The voluntary carbon budget allowance fell away, with mandatory carbon budgets under the Climate Change Act 22 of 2024 intended to replace it. A higher rate of R640 per tonne is legislated for emissions exceeding an allocated budget, with no allowances claimable against that portion — but commencement is tied to ministerial determination and should be confirmed before it is treated as live.
What are the deadlines?
Two dates matter, and they are linked. Your emissions report to the DFFE is due by 31 March, and SARS pre-populates your carbon tax return from that submission. An error in March becomes a tax liability in July.
| Obligation | Where | Deadline |
|---|---|---|
| GHG emissions report for the preceding calendar year | DFFE, via SAGERS on the NAEIS platform | 31 March |
| Carbon tax account and payment for the preceding tax period | SARS eFiling, form DA 180 | Penultimate working day of July — 30 July 2026 for the 2025 period |
| Customs and excise manufacturing warehouse licence | SARS, form DA 185 with annexure DA 185.4B2 | Annual renewal, licences run to 31 December |
| Record retention | Your own records | Five years |
Penalties sit in the Customs and Excise Act rather than in the Carbon Tax Act: administrative penalty in place of prosecution under s91, interest on outstanding amounts under s105, late-payment penalty and interest under s19A, and criminal offences under ss78–86A. Separately, failing to report emissions to the DFFE carries a fine of up to R5 million and/or five years’ imprisonment on first conviction, rising to R10 million and ten years thereafter.
Common questions
Questions about carbon tax
Is my business liable if none of my boilers is over 10 MW?
Possibly. The threshold is a combined installed capacity, aggregated across the facility. Six 2 MW boilers total 12 MW(th) and put you over it, even though no single unit is anywhere near the limit.
The other trap is Schedule 2 activities with a threshold of “none” — cement, iron and steel, and coal mining among them. There the capacity test does not apply at all and any emissions are liable.
What do I actually pay per tonne, after allowances?
Far less than R308. With the basic 60% allowance and the others, the combined allowance is capped at 90% for combustion emissions and 95% for process and fugitive emissions, so the effective rate through Phase 1 sat in the region of R6 to R47 per tonne depending on the activity and the allowances claimed.
The point of the estimator above is to show you where in that range you fall, because the answer depends entirely on which allowances your activity qualifies for.
When is the carbon tax return due?
The tax period runs from 1 January to 31 December, and the account and payment are due on the penultimate working day of July following that period. For the 2025 tax period the deadline was 30 July 2026.
The return is form DA 180, filed through SARS eFiling under Excise Levies and Duties, with annexures for stationary and non-stationary combustion, fugitive emissions from oil and gas and from coal, industrial processes, and allowances.
How does the DFFE emissions report relate to the SARS return?
They are two obligations that feed each other. You report emissions to the DFFE by 31 March each year through SAGERS, the greenhouse gas module of the National Atmospheric Emissions Inventory System. SARS then pre-populates the emissions fields on your DA 180 from that submission.
If you declare a different figure to SARS you must be able to substantiate it. In practice a discrepancy between the two is the most common trigger for a SARS query, which is why the March submission deserves more attention than it usually gets.
Do I need a licence as well as a return?
Yes. Every carbon taxpayer must obtain a consolidated licence covering the combination of its emissions facilities as a customs and excise manufacturing warehouse, and designate the premises of its operational control in South Africa as the premises for that licence.
The forms are DA 185 with annexure DA 185.4B2. Licences run to 31 December and renew annually.
What did Phase 2 change on 1 January 2026?
The rate rose from R236 to R308. The carbon offset allowance increased by five percentage points — to 15% for combustion emissions and 10% for process and fugitive. The electricity generation levy was repealed and its deduction fell away, with electricity price neutrality now maintained through the renewable energy premium and extended to 2030. The voluntary carbon budget allowance ended.
What did not change is as important. The basic 60% allowance and the trade exposure allowance were both retained to 31 December 2030, contrary to what Treasury’s 2024 discussion paper proposed and contrary to what several South African websites still publish.
Could the carbon tax be paused or scrapped?
There was reporting in early 2026 of a proposal to pause the tax, and analysts continue to flag the possibility of a review. Nothing came of it in the Budget, the Phase 2 rate took effect as legislated, and the allowance structure has been fixed to 2030.
Planning on the assumption that it disappears would be unwise. Planning on the assumption that the 2027 to 2030 rates are settled would be equally unwise — those figures are Treasury’s indicated trajectory, not law.
Related solutions
Often paired with Environmental & Climate
Governance & ESG Reporting
Turn your carbon data into a credible, investor-ready ESG report.
Transformation (B-BBEE)
Align environmental spend with your broader transformation strategy.
Social & Consumer Education
Extend impact into communities with measurable social programmes.
Let’s talk
Find out what your carbon number really is.
Book a carbon assessment — we’ll establish your baseline and show you the fastest, most credible route to reduce and report it.