A dramatic cut to the capital expenditure budget for emission-reduction projects has been announced by Sasol for emission-reduction projects by 70%, reducing its budget from up to R25 billion to between R4 billion and R7 billion over the next five years. Despite this, the energy and chemicals giant maintains that its commitment to cutting greenhouse gas emissions by 30% by 2030 remains unchanged.
“We are making trade-offs but we are not abandoning our ambition at the group’s 2025 Capital Markets Day. We believe that even with the revised decarbonisation pathway, we are still able to deliver the same emission reduction targets that we had previously,” said Simon Baloyi, Sasol’s Chief Executive Officer.
The updated plan discards an earlier option to scale back production at Sasol’s Secunda operations in Mpumalanga. Instead, the company plans to raise output from below 7 million tonnes to over 7.4 million tonnes, aiming for breakeven by 2028 based on an oil price of $50 per barrel. Baloyi explained, “We are no longer considering curtailing volumes at Secunda. We believe that if we improve plant stability and feedstock quality, we can increase production without compromising our climate objectives.”
To support this goal, Sasol is repurposing its Twistdraai export coal plant into a 10 million tonne per year destoning facility. Baloyi further said, “By improving coal quality through destoning, we reduce the environmental footprint of the feedstock we use at Secunda The group has also dropped its proposed briquetting solution for coal fines, citing ‘capital intensity and limited benefit’.”
The roadmap increases Sasol’s renewable energy target from 1.2 GW to 2 GW, to be achieved through a mix of power purchase agreements and direct investment in renewable projects. So far, the company has secured 575 MW through independent power producers. Sasol’s Executive Vice President for business building, strategy and technology, Sarushen Pillay confirmed, “We are planning to construct solar PV plants at Secunda and Sasolburg, which will be embedded in our own operations. We’ve deliberately selected areas where we can make use of existing grid infrastructure to minimise wheeling costs.”
To further support its renewable ambitions, Sasol will apply to the National Energy Regulator of South Africa for an electricity trading licence. This will allow the group to distribute power to multiple offtakers, reducing risk and increasing flexibility. “We want to diversify our customer base by targeting large industrial clients as well as smaller players through our Ampli Energy joint venture.We believe this platform will support the country’s energy transition and provide new revenue streams,” noted Pillay.
The revised plan also retains existing energy efficiency projects and includes carbon-market tools such as carbon credits and renewable energy certificates. However, it excludes the previously considered turndown of boilers used in electricity generation. This follows Sasol’s controversial but successful application to manage sulphur dioxide emissions on a load-based average rather than per boiler. A substantial portion of the capex revision is tied to the abandonment of both the briquetting plan and a reassessment of the economic viability of replacing coal with imported liquefied natural gas (LNG) at Secunda.
While the company has opted not to pursue LNG for its own fuel and chemical operations, it supports LNG imports to serve downstream industries in Gauteng and KwaZulu-Natal. “From a cost and emissions perspective, LNG no longer makes sense for our Secunda operations. But we still believe it’s critical for the country’s industrial future. That’s why we support LNG imports for the broader South African market,” said Baloyi.
Sasol is working with Eskom to explore gas aggregation options and supports proposals for gas-to-power generation to create a viable demand anchor for LNG. In the interim, the group plans to apply for regulatory approval to supply customers with methane-rich gas derived from coal, bridging the anticipated supply gap between 2028 and 2030 until LNG infrastructure is in place.
Sasol continues to back sustainable aviation fuel (SAF) projects using green hydrogen, and expects supportive EU directives to unlock SAF production at Secunda by year-end. Other innovations include a pilot converting used cooking oil into fuel at Natref, and a collaboration with Anglo American and De Beers to grow oil crops on rehabilitated mining land using mine water. “Our goal is to become a credible player in green molecules.That includes SAF but also broader efforts to decarbonise the value chain through innovation and circular solutions,” said Pillay.
In the near term, Sasol’s focus remains on improving the performance of its Southern African energy and chemicals units, alongside its international chemicals division. New financial targets set for the 2028 financial year include achieving up to R71 billion in adjusted EBITDA and cutting net debt below $3 billion. Annual capex has also been revised downwards to between R23 billion and R31 billion and R5 billion to R6-billion less than prior guidance.
