South Africa could introduce a carbon tax next year if a proposal contained in the country's latest budget comes to fruition.

The Treasury yesterday put forward plans for a carbon tax of 120 rand (£10) per ton for emissions over and above a 60 per cent threshold that will be set for a number of carbon intensive sectors, including electricity, petroleum, iron, steel and aluminium.

It added that it plans to publish a draft policy later this year.

Under the initial plans, the levy would increase by 10 per cent a year until 2020, while all sectors bar electricity will be able to claim additional relief of at least 10 per cent.

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