Trucost Plc

Carbon-intensive stock prices fall as tax looms

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Courtesy of Trucost Plc

Several companies identified by Trucost as most exposed to carbon liabilities in South Africa have seen their share prices fall, after the Treasury announced that a carbon tax will start in 2015.

Reuters reports that ArcelorMittal South Africa's share price fell 6% after the Treasury's announcement sparked concern that the R120 (US$14) per tonne of carbon dioxide equivalent tax would hit earnings of heavy polluters. Oil & Gas company Sasol's shares fell nearly 2%, according to Reuters.

Trucost's analysis of carbon risks in South Africa identified ArcelorMittal South Africa Ltd as most exposed in the Basic Resources sector. We found that Sasol Ltd could see its return on equity fall by 16% if modelled carbon liabilities were internalised.

The S.A. Government plans to publish an updated policy paper on the carbon tax in March.

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