The Sasol’s Coal Burning Secunda Plant, South Africa’s largest chemical and energy business, is critical to the country’s petrochemical industry. Secunda is vital to the South African economy since it manufactures essential components for agriculture, mining, and manufacturing. It provides 30% of the country’s liquid fuels and manufactures various chemicals, including fertilisers and explosives, vital to key economic sectors. In 2021, this output contributed 2.6% of the country’s GDP directly and 5.2% indirectly. In addition to its industrial importance, Sasol supports over 28,000 South Africans’ employment by contributing considerably to wages, corporate taxes, and social investment and maintaining an entire town dedicated to its workforce.

Secunda is unique in using coal as its principal feedstock instead of oil or gas, which is uncommon among worldwide petrochemical companies. However, the facility has two major challenges: its significant reliance on coal makes it the world’s most excellent source of carbon dioxide emissions, and shifting to sustainable feedstocks is financially unsustainable. Research conducted in partnership with climate strategist Tristan Hahn and the Trade and Industrial Policy Strategies think group looked at the future of the Secunda complex and its implications for South Africa’s petrochemical industry. They determined that, despite technological breakthroughs, converting Secunda to green alternatives is doubtful, and the facility may be approaching the end of its existence.

The Sasol’s Coal Burning Secunda Plant: Environmental and Economic Challenges

The Sasol’s Coal Burning Secunda Plant, built in the late 1970s, was planned to run primarily on coal. Although Mozambique gas was introduced as a supplementary feedstock in 2004, coal remains the plant’s primary fuel. With increasing pressure from worldwide decarbonisation pledges and shareholder pressures, Sasol has vowed to reduce greenhouse gas emissions by 30% by 2030, partially by reducing production by 11%. This reduction might seriously affect South Africa’s chemical and liquid fuel supplies, disturbing employment and the economy. Furthermore, Sasol’s coal sources have lowered in quantity and quality, making the plant’s long-term viability uncertain.

Secunda has relied on natural gas from Mozambique as a supplementary fuel for the past two decades, but these reserves are running low. Sasol recently notified significant clients, comprising industrial giants ArcelorMittal and Consol Glass, that it will stop providing gas by 2027. This poses a huge danger to South Africa’s manufacturing economy unless sustainable alternatives are discovered.

South Africa’s government policies complicate Secunda’s future. Plans to increase the carbon price to $30 per tonne by 2030 might put additional financial pressure on Sasol, potentially leaving Secunda unprofitable. Without economical and sustainable feedstocks, Sasol has difficulty balancing production needs and reaching emission reduction goals.

Also Read: Climate Change Has Increased Global Burnt Areas By 15%, Study Reveals

Towards a Sustainable Transition

One option for South Africa to reach its climate commitments while maintaining Secunda’s economic contribution is to prioritise renewable electricity and focus emissions cuts on Eskom’s coal-fired power plants. This method would allow Sasol to work with somewhat lower emissions targets while maintaining its position as the principal local provider of petrochemicals.

Sasol is also looking into alternative green technologies, like biomass, green hydrogen, and carbon capture. However, these approaches entail considerable financial and technological challenges. Biomass feedstocks, for example, are unavailable at the required scale, and green hydrogen is now too expensive to deploy. Carbon capture and storage technologies are still commercially unviable, at least in the short term, making a rapid changeover difficult for Sasol.

Secunda, an ageing facility, faces new issues as its equipment approaches the end of its operating life. Sasol’s financial situation, characterised by increased debt and lower-than-expected returns from projects such as the Lake Charles Chemicals Project in the United States, complicates the capital investment required for decarbonisation. These budgetary constraints make it doubtful that Sasol will invest in the necessary modifications to convert Secunda into a green operation.

Also Read: Global Ecosystems Atlas Launched At COP16 To Strengthen Environmental Protection