South Africa’s vanadium redox flow battery (VRFB) value chain currently lies in raw material output, electrolyte production, and locally manufactured balance of plant components. However, there is potential for a more significant role to be played along the value chain. To foster the growth of a domestic VRFB industry, it is crucial to implement measures that support both demand and supply. The increasing demand for electrification in Africa, and globally for long duration storage, creates an opportunity for VRFBs to enhance energy supply. VRFBs present a compelling commercial opportunity for use in storage due to their safety, use of recyclable electrolytes, and extended cycle life, among other advantages. This study examines the growth potential of a South African VRFB value chain. The analysis is particularly relevant given the rapid expansion of the global VRFB industry.The research explores the practicality of developing a sustainable VRFB market and supply chain in South Africa, integrated with renewable energy generation, while improving energy supply and security.

See Policy Brief: A review of vanadium redox flow battery (VRFB) market demand and costs

Renewable energy sources combined with energy storage play a vital role in South Africa's pursuit of energy security and achieving its net-zero objective by 2050. As South Africa grapples with a deepening energy crisis, energy storage technologies are gaining prominence, with batteries taking precedence in the short to medium term. Given the growing need for grid storage and the capability of VRFBs to meet demand for applications requiring extended storage duration, this policy brief investigates the potential benefits of VRFBs in addressing local market requirements for energy security. It examines the key cost drivers of VRFBs, with a focus on the vanadium price and provides recommendations for reducing the costs associated with VRFB systems.

See Main Research Report: Localising vanadium battery production for South Africa's energy security

CBAM is a key policy tool that forms part of the European Green Deal (EGD) to reduce net GHG emissions across Europe and abroad. Within this context, CBAM can be defined as a carbon border tax on embedded GHG emissions of carbon-intensive products imported into the EU. The main intent is to equalise the price of carbon between EU products and imports, by ensuring importers face similar conditions to EU manufacturers, and that the European climate objectives are not undermined by carbon leakage. In its current form, cement, aluminium, fertilisers, electric energy production, hydrogen, iron and steel, as well as some precursors (input materials, i.e. iron ore) and a limited number of downstream products are targeted. Other products are set to be added after the transitional period. These products remain highly exposed in terms of international climate change policies. In South Africa, a total of US$2.8 billion (about R52.4 billion) of South African exports (based on 2022 data) are at risk in the short term, with this number set to increase as the CBAM covers more and more products. The iron and steel (including iron ore) and aluminium industries are particularly at jeopardy, in the short term.

This paper provides an augmented analyses of the Policy Brief by Monaisa and Maimele  (2023), entitled The European Union’s Carbon Border Adjustment Mechanism and implications for South African exports. It updates analysis post the adoption of CBAM on 10 May 2023, reflecting on the vulnerability of the South African economy.

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Small businesses are the engines of a fair and green economy. But they lack access to the finance they need to grow. A new report from the Green Economy Coalition (GEC) looks at the barriers that small business face. These include risky and informal money lending arrangements, high bars for accessing credit, regulatory hurdles, and a lack of information on how to access finance. The report includes case studies from countries such as India, Peru, Senegal, Uganda and South Africa. The South African case study looks at the Seeds for Life Farm Primary Cooperative.

The report  draws on research and work conducted by GEC members: Caribbean Natural Resources Institute (Trinidad and Tobago), Advocates Coalition for Development and Environment (Uganda), Development Alternatives (India), Trade & Industrial Policy Strategies (South Africa), Libélula (Peru), Foro Nacional Internacional (Peru), Innovations Environnement Développement Afrique (Senegal), the International Union for Conservation of Nature (Senegal) and the Economic Policy and Competitiveness Research Center (Mongolia).

Download the report or read online:

Main Report: Small is powerful

Case Study: South Africa

This paper provides a barometer of the country’s transition to sustainable development, paying special attention to water, as well as its Siamese twin "sanitation”. It has three main themes, namely: the water gap; household water and sanitation access; and governance and funding issues in the sector.

Trade & Industrial Policy Strategies (TIPS), an economic policy research institute based in Pretoria, is conducting research with the Green Economy Coalition (www.greeneconomycoalition.org) aimed at better understanding the challenges faced by South Africa’s local green/social entrepreneurs.
 
TIPS is inviting all Green and Social Entrepreneurs/Small Businesses in South Africa to participate in an online survey. The information obtained will contribute to improving the understanding of the types of challenges faced by small businesses (particularly in terms of financial inclusion). It will help formulate policy recommendations in line with entrepreneurs’ needs.
 
If you identify yourself as a Green or Social Entrepreneur/Small Business, we would really value your insight. Click here to access the online survey link or copy and paste the link into your preferred Internet browser: https://forms.gle/tSEc8UA4QWaUuLVX8. You are also welcome to share the survey link with other entrepreneurs in your network. Subsequent dialogues and policy work will be informed by the outcomes of the survey. Participants will be invited to participate in the research feedback sessions.
 
The survey will close on 10 February 2021. Should you have any difficulties (such as Internet access or language) in filling in the survey, you are welcome to contact us for assistance at elize@tips.org.za or ntombi@tips.org.za.

Media release: Promoting green entrepreneurship - what are the stumbling blocks?

Muhammed Patel - TIPS

Presentation: National Employment Vulnerability National Employment VulnerabilityAssessment (NEVA) and Sector Jobs Resilient Plans (SJRP): Coal value chain

Report: Sector Jobs Resilience Plan: Coal value chain

Pulane Mafoea Nkalai - Sam Tambani Research Institute

Presentation: Energy Mix choices and the protection of workers’ interests in South Africa

Michelle Cruywagen, Megan Davies and Mark Swilling - Centre for Complex Systems in Transition, Stellenbosch University 

Presentation: Estimating the cost of a just transition in South Africa’s coal sector: Protecting workers, stimulating regional developmentand accelerating a low carbon transition

Report: Estimating the cost of a just transition in South Africa’s coal sector: Protecting workers, stimulating regional developmentand accelerating a low carbon transition

David Hallowes - groundWork

Presentation: Down to Zero

Report: Down to Zero - The politics of just transition (David Hallowes and Victor Munnik 2019)

Gemma Gatticchi, Bloomberg. 4 November 2020: Renewable energy drive threatens 120,000 South African jobs  

The forestry value chain faces many challenges. These include rising costs for transportation, labour, raw material inputs, energy and imported raw materials, exacerbated by poor road infrastructure that contributes to high maintenance costs and inefficiencies. Increasingly, climate change is an additional stressor that demands transitioning from business-as-usual practices. There is a close link between climate change and the forestry value chain. On the one hand, forests are affected by climate change physically through higher mean annual temperatures, changing precipitation patterns and more frequent and extreme weather events, and also economically through climate change related policy measures. On the other hand, forests help to mitigate climate change through sequestrating carbon if the forests are sustainably managed, but with land-use conversion and forest degradation, can contribute to climate change through more carbon emissions. Climate change thus represents both a challenge and an opportunity. As such, a proactive approach is required to harness the profitability associated with embracing sustainability. 

While climate change impacts have been assessed for various ecosystems across the world, the risk to industrial forestry plantations in South Africa is not yet well understood. The objectives of this report are to identify and explore the climate-compatibility in South Africa’s forestry value chain; and to suggest solutions to address the climate-compatibility problems in South Africa’s forestry value chain.

South Africa, a carbon-intensive economy, has initiated a transition to a more sustainable development pathway. While this is centred on the energy sector, the transition is an economy-wide transformation. In a highly unequal society like South Africa, the need for a just transition which would empower vulnerable stakeholders has emerged as an imperative. Yet tensions remain, which hinder an inclusive process and outcomes. Part of the early process is forming a unified understanding and pathway that is inclusive and just. What do stakeholders mean when they talk about a just transition? How can South Africa achieve a just transition? This dialogue explores stakeholder perspectives from government, the private sector, the labour movement and civil society. It builds on a first dialogue hosted on 7 July (see recording below).

About the Speakers

Tracey Davies is the Executive Director of Just Share, a non-profit shareholder activism organisation. She is admitted as an attorney in South Africa, and is a renowned expert on responsible investment, shareholder activism, and corporate governance and transparency in South Africa.

Ashraf Kariem is Chief Expert Economy in the National Planning Commission (NPC) secretariat, within the Department of Planning, Monitoring and Evaluation (DPME). He was part of the team overseeing the NPC's just transition dialogue process.

Jacklyn Cock is a professor emeritus in the Department of Sociology at the University of the Witwatersrand and an Honorary Research Professor in the Society, Work and Development Research Unit (SWOP). She has written extensively on environment, gender and militarisation issues.

Sherman Indhul is the Executive Manager: Corporate Sustainability at Transnet. His experience over the past 15 years in the public and private sectors has led to a focus on sustainability, and specifically on climate change. He notably sits on the Steering Committee of the National Business Initiative's (NBI) Just Transition Pathways Project.

Muhammed Patel is an Economist at TIPS. He has experience in the coal and petrochemical value chains. He is the lead author of the National Employment Vulnerability Assessment (NEVA) and Sector Jobs Resilience Plan (SJRP) for the coal value chain in South Africa.

About the Facilitator

Gaylor Montmasson-Clair is a Senior Economist at TIPS, where he leads work on Sustainable Growth. He has carried out extensive research on the transition to an inclusive green economy from a developing country perspective, with a focus on policy frameworks, industrial development, just transition and resource security.

Please register: https://zoom.us/webinar/register/WN_wgNwl1ZwTpmlou9Vpl3JEQ

This webinar builds on a first dialogue hosted on 7 July. 

A global transition to sustainable development is under way and strengthening as a response to multiple socio-environmental crises, including the global impacts of climate change. From a trade and industrial perspective, this transition has implications on the composition and dynamics of entire value chains. This concerns what inputs are accessed, the processes that underlie production, what goods and services are produced, as well as what happens to these products post-consumption. The transition materialises through two complementary streams: the development of new, green industries and the greening of existing, traditional industries. This report aims to shed light on the trade-related risks faced by South Africa as a result of the global transition to a low-carbon economy by delving further these underlying factors and unpacking South Africa’s trade patterns from a carbon perspective

Concrete is the most manufactured product on the planet. It is the second most consumed product after water.  Unfortunately, the manufacturing of Original Portland Cement (OPC), which accounts for 98% of global cement production, is highly energy intensive and involves a chemical process of converting limestone into clinker which releases massive quantities of CO2, and currently accounts for 8% of all global greenhouse gas emissions. If cement demand increases as expected, and the industry does not embark on a low-carbon pathway, it is possible that by 2050 cement production alone could account for almost one quarter of all global greenhouse gas emissions. This research report looks at the universe of possible solutions along the cement value chain to make the industry more climate compatible.

The world of mobility is rapidly evolving worldwide. Technological developments are notably enabling the diversification of drivetrains, away from traditional internal combustion engines (ICE) towards electric and other alternative motors. While EVs still account for a marginal share of global vehicle sales, the shift is evident in leading markets. All forecasts point to an exponential growth of EVs in the coming decades.The world of mobility is rapidly evolving worldwide. Technological developments are notably enabling the diversification of drivetrains, away from traditional internal combustion engines (ICE) towards electric and other alternative motors. While EVs still account for a marginal share of global vehicle sales, the shift is evident in leading markets. All forecasts point to an exponential growth of EVs in the coming decades.

Heightened environmental regulations, linked to climate change mitigation and air quality improvement, have initiated the transition to cleaner forms of transportation. Policy impetus, such as support programmes and tight environmental targets, are now driving the market globally. In addition, favourable economics, which see EVs being increasingly cheaper to own than petroleum-based cars over their lifetime, and consumer experience, linked to the connectivity, reactivity and usage experience of the vehicles, are supporting the transformation.

South Africa lags behind this global trend. EVs remain extremely marginal, be it from an offer, demand or manufacturing perspective. As heralded by government and industry alike, it is, however, the ambition of the country to rapidly enter this space. While a coherent policy environment is lacking, the country’s Green Transport Strategy sets out government’s vision to radically grow the uptake of EVs in South Africa. As with every transition, the emergence of EVs brings disruptions, calling for the need to adequately manage the transition. In the short term, this requires supporting the development of the sector, both from a market development and manufacturing perspective, through a coherent policy framework consistent with South Africa’s domestic context. This report aims to inform this transition in the South African context.

 Press Release

Shifting to electrical vehicles in South Africa – the time is now

Media Article

The time for S Africa to shift to EV production is now, says TIPS report - Irma Venter, Engineering News 20 August 2020

As South Africa responds to COVID-19 and aims to stimulate the economy and job creation post the lockdown through an infrastructure-led package, an opportunity should not be missed to address many of the water and sanitation challenges in the country. This is much needed and would provide multiple benefits, not only for the economy but also for the poor communities that need the infrastructure and services as well as municipalities that require strengthening of their water and wastewater infrastructure. This policy brief looks at the benefits of including water and sanitation in the country’s stimulus package and considers possible avenues to do so.

Download a copy of the Policy Brief or read online.

This policy brief is a summary of a Working Paper available here: A case for water and sanitation in South Africa's post-lockdown economic recovery stimulus package

As South Africa responds to COVID-19 as well as aims to stimulate the economy and job creation post the lockdown through an infrastructure-led package, an opportunity should not be missed to address many of the water and sanitation challenges in the country. This is much needed and would provide multiple benefits not only to the economy but also the poor communities that need the infrastructure and services, as well as municipalities that require strengthening of their water and wastewater infrastructure. This working paper looks at the benefits of including water and sanitation in the country’s stimulus package and considers possible avenues to do so.

For a summary version of the working paper see Policy Brief: A case for water and sanitation in South Africa's post-lockdown economic recovery stimulus package

South Africa aims to transition to an inclusive green economy, combining economic development, social progress and environmental preservation. Both the economy and society remain, however, highly unsustainable. Targeting the transition to an inclusive green economy therefore signifies a massive and disruptive shift, commanding a new model of development. Industrial policy is core to this process, notably to ensure a “just transition” and manage a balancing act, consisting of maximising the benefits of the transition and minimising the risks associated with not transitioning; but in line with South Africa’s capabilities to minimise the short-term trade-offs and threats. This requires a careful alignment of South Africa’s industrial policy with the inclusive green economy paradigm to support the country’s green industrial development. Ultimately, this requires the shift from industrial policy to green industrial policy. To inform such a transformation, this report reviews South Africa’s industrial policy, from an inclusive green economy lens. It investigates the extent to which South Africa’s industrial policy is responding to, if not driving, the country’s transition.

The report was produced by the United Nations Environment Programme (UNEP) with funding from the European Union in the framework of the project Inclusive Green Economy Policy Making for SDGs. 

Business Day - 26 May 2020 by Gaylor Montmasson-Clair (TIPS Senior Economist) and Jesse Burton (Senior Associate at E3G and the University of Cape Town).

Read online at Business Day

Sugar is a key agricultural industry for South Africa, with sugarcane being the second largest South African field crop by gross value, surpassed only by maize. The industry generates R14 billion in revenues, with sugarcane farming contributing around 64% of this figure, employing up to 85 000 people across the growing and milling subsectors, and providing indirect employment to possibly up to 350 000 workers within the value chain. The industry contributes around 10% to 11% of the country’s total agricultural employment of about 850 000 and may, through the families of those directly and indirectly employed, impact the livelihoods of close to one million people or close to 2% of the South African population. 

The industry, however, remains mainly a single income stream industry, reliant almost entirely on sugar sales for revenue. Yet globally, the sugar industry is experiencing a drive for commercial sustainability focused on the diversification of income streams, with sugar industries expanding their focus to include the production of renewable energy and biochemicals. This report move looks at options for South Africa.

In 2015, TIPS, at the request of the then Department of Science and Technology, undertook a project to define "green research and development (R&D)" and determine the levels of green R&D investment in South Africa. In 2019, TIPS was requested by the Department of Science and Innovation (DSI) to update and, where possible, enhance the initial 2015 research.

The purpose of the study was to assess progress made towards the Medium-Term Strategic Framework (MTSF) target set by DSI for the period 2014-2019. While the principles and definitional framework remained the same as the 2015 study, TIPS, in collaboration with the DSI and CeSTII, refined the understanding of green R&D in 2019. This report provides the adjusted figures for the 2010/11-2012/13 period and also shows the trends in green R&D expenditure over seven years, from 2010/11 to 2016/17.

Engineering News - 23 January 2020 by Tasneem Bulbulia

Read online at Engineering News

Daily Maverick - 22 January 2020 by Gaylor Montmasson-Clair (TIPS Senior Economist)

Read online at Daily Maverick