Carbon Tax South Africa: The Secret Vehicle Tax You Need to Know About
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Are you keeping an eye on your fleet’s carbon emissions? It’s one of the most dangerous emissions for our planet, and if you’re not careful, it could become the most dangerous for your fleet budget through carbon tax.
Uncover why it’s so important in a South African context
Delve into what makes carbon emissions so dangerous
Explore how fleet management can help you keep your fleet’s carbon emissions low
Discover how Cartrack is the solution for keeping your fleet carbon tax compliant
What is carbon tax?
In February, the Minister of Finance, Enoch Godongwana, delivered the 2024 Budget Speech. In it, he shared that the carbon tax will increase from R159 to R190 per tonne of CO2, a 16% increase. But what exactly is this tax?
Introduced in June 2019, carbon tax, which is more commonly known as “the secret vehicle tax,” is anenvironmental tax on the carbon dioxide (CO2) equivalent of greenhouse gas emissions. Now you may be wondering, “Why on Earth would there be a tax on carbon dioxide?” But it’s actually for a good reason. Let’s start by getting into the purpose of carbon tax.
What is the purpose of carbon tax?
Carbon tax is one of the government’s policies designed to fight climate change by creating a low-carbon economy. In 2016, South Africa shared its goal to lower greenhouse gas emissions by 34% by 2020 and 42% by 2025. To achieve this goal, a carbon tax was introduced. Carbon tax targets fossil fuels that release carbon dioxide when they burn. Carbon dioxide is a natural gas that is a by-product of burning fossil fuels. These fossil fuels include coal, oil, and petrol. When these carbon-rich fuels are burned, they release greenhouse gases, which harm the environment. This is why carbon tax was implemented, and the goal here is to:
How does this increase affect everyday South Africans? This tax increase plays a role in the price you will pay when you’re purchasing a new vehicle.
What does this increase mean for South Africans?
Applying mostly to new vehicles, carbon tax is calculated by estimating how much CO2 a car will emit over its lifespan. This is then added to the vehicle's purchase price, which you pay for when you buy the car. So if you’re looking to purchase new vehicles for your fleet, make sure you know how much CO2 it is estimated to emit throughout its lifespan, as this can indicate how much you’ll need to pay initially.
In a country with CO2 emissions as high as South Africa’s, this policy is sure to not only impact our pockets but the country's overall emissions too. But just how high are these numbers? Let’s find out.
What do South Africa’s carbon emissions look like?
To truly understand the extent of South Africa’s carbon emissions, we need to start by looking at the numbers. According to statistics:
These numbers show just how bad our country's carbon emissions are. But why should we be worried and try to lower these numbers? Let’s unpack what makes carbon emissions so dangerous.
What makes them so dangerous?
Carbon dioxide is considered a greenhouse gas, playing a big role in creating the greenhouse effect. The greenhouse effect is where these gases absorb the sun’s solar energy and trap heat in the Earth’s atmosphere. While this is important for keeping Earth warm enough for us to live on, the increase in carbon emissions has started tipping the greenhouse effect out of balance. This means too many greenhouse gases absorb the sun's energy, causing Earth to slowly warm up, leading to:
Extreme weather conditions such as droughts or heavy rain (think of Dubai’s recent heavy rains and flooding)
An increase in average temperatures, which can be very harmful to agriculture and lead to food shortages
While transport accounts for a large portion of global CO2 emissions, it’s not the only source of these dangerous gases. Let’s see where else they come from.
Carbon emissions go beyond cars
Cars aren’t the only way carbon is emitted. SARS states that “persons conducting an activity or activities in South Africa resulting in greenhouse gas emissions above the threshold” must pay carbon tax. These activities can include the following:
Commercial buildings in South Africa produce about 22% of the country's carbon emissions. This is due to the use of fossil fuels for heating and cooling, which account for about 80% of the energy used in buildings. While this is important for optimal temperature and air quality inside a building, it also increases the country’s greenhouse gas emissions.
3. Industrial processes
While coal is mostly used in electricity generation, it is also used in many high-heat industrial processes. These include:
Papermaking
Steelmaking
Food and drink manufacturing
Agriculture
Carbon emissions come from just about anything that needs to burn fossil fuels. However, vehicles still make up a large chunk of South Africa’s overall carbon emissions. Let’s find out how to keep your vehicle’s carbon emissions low.
How can you lower your vehicle’s carbon emissions?
It is possible to keep your vehicle’s carbon emissions low because, most of the time, it’s our own behaviour that causes an increase in emissions. Let’s look into the steps you can take to lower your CO2 emissions:
Keep your vehicle well-maintained:
Vehicle maintenance doesn’t just affect your vehicle's performance; it also impacts its carbon emissions. One way you can lower this is by keeping the correct tyre pressure. Incorrect tyre pressure can cause higher rolling resistance, which increases fuel consumption and CO2 emissions.Keeping your engine tuned can increase fuel efficiency by up to 40%, and changing your oil regularly while keeping your filters clean can also improve fuel efficiency, which reduces carbon emissions.
Avoid harsh driving:
Harsh driving doesn’t just put your drivers’ lives and those of other road users at risk; it increases carbon emissions too. Speeding is the first driving behaviour that can increase carbon emissions, which increases your vehicle’s aerodynamic drag. Studies show that for every 8km you drive over 96km per hour, your fuel economy is lowered by 7%. This increase in fuel consumption leads to an increase in carbon emissions. Another behaviour that increases carbon emissions is harsh braking. When you brake harshly, you need to downshift, which needs more engine revs to keep the vehicle moving. This burns more fuel, leading to an increase in carbon emissions. Research also shows thatidling for more than 10 seconds increases fuel consumption and produces carbon emissions.
With carbon emissions and vehicle weight, every extra kilogram counts. Overloading your vehicle doesn’t just cause higher maintenance costs because of the extra pressure and strain being put on it; it also increases fuel consumption, leading to increased carbon emissions. Research shows thatcarrying an extra 50kg in your car increases fuel consumption by 2%. Over time, this extra weight translates to high fuel consumption, which increases carbon emissions.
Avoid traffic congested routes:
Driving in congested traffic means you need to downshift to keep accelerating. This stop-and-go situation requires more energy, which in turn burns more fuel compared to travelling at a consistent and reasonable speed. This leads to increased CO2 and pollutants being released into the air.
These are some steps you can take to keep your carbon emissions at a minimum. However, applying all of them across your fleet can take some work. The solution to streamlining all these steps is a fleet management system. Who better than the leaders in fleet management to bring this right to your fleet?
Keep carbon emissions at a minimum with Cartrack’s solutions
Cartrack’s fleet management solutions make managing your fleet a breeze. Whether you own five, fifteen, or five hundred vehicles, we bring you the best solutions to make it as simple as managing one vehicle. Let’s take a look at our solutions and see how they can help you lower your fleet’s carbon emissions:
CO2 reports and carbon emission calculations:
Know exactly how much CO2 your fleet vehicles emit with Cartrack’s CO2 reports. By closely monitoring your fuel consumption, we can determine how much CO2 each of your vehicles emits during a specific period. All this information is available on your MiFleet report, or your odometer report, which gives you CO2 emissions based on the distance travelled.
Preventative maintenance:
Keep your vehicles functioning at their most efficient with Cartrack’s preventative maintenance. Damaged vehicle parts can significantly increase your carbon emissions, so stop damage right in its path with this proactive feature. Get real-time alerts on engine faults, worn brake pads, and other diagnostics. This information helps you pre-empt exactly which of your vehicles need servicing, ensuring that you replace these parts before they become damaged and increase carbon emissions in your fleet.
This information gives you detailed insights into driver-specific performance, helping you spot which areas your drivers need to improve to ensure they aren’t increasing carbon emissions.
Fuel monitoring:
Quickly spot sudden fuel spikes before they boil over with Cartrack’s fuel monitoring system. Fuel efficiency is one way of spotting increases in your vehicle's carbon emissions, and Cartrack’s fuel monitoring system helps you closely monitor how much fuel your vehicles are consuming in real time. Sudden increases in fuel consumption can indicate that your vehicle is emitting more carbon. When linked with our driver scorecards, you can pinpoint the specific behaviours that caused this increase.
These behaviours can lead to harsh driving, so the moment they’re detected, audible alerts are triggered in the cabin, allowing them to correct their actions and prevent potential damage, including increased carbon emissions.
Keep your fleet green and compliant with Cartrack’s fleet management solutions
Carbon emissions used to be a costly and difficult fleet expense to measure. But now, it’s as convenient as a few clicks on your laptop.
Contact us today, and let’s keep your expenses low and your efficiency high.
Are you keeping an eye on your cars' carbon emissions? Click here to find out how you can avoid extra carbon tax with pro fleet management tools.
