The government is moving into Phase 2 of the Carbon Tax (2026 to 2030). The key updates include:

• Mandatory carbon budgets for large emitters.
• Significantly higher penalties (up to R640 per tonne) if companies exceed their allocated carbon budget.
• Eskom will now pay carbon tax on electricity generation. This cost will ultimately be passed on to businesses and households through higher electricity tariffs.
• Increased opportunities to use carbon offsets to reduce tax liabilities.

These changes are designed to push companies toward lower-carbon operations.

If your company still relies mostly on grid electricity, you could face rising costs in two ways:

1. Higher Eskom tariffs as carbon tax costs are passed through to consumers.
2. Direct carbon tax penalties if your operations exceed your allocated carbon budget.

Businesses that continue to rely on high electricity consumption from coal-based power face growing financial and compliance pressures from 2026 onwards.

Installing solar allows your business to:

• Reduce your reliance on Eskom and lower your exposure to future tariff increases driven by carbon tax.
• Generate your own clean electricity and reduce your overall carbon footprint.
• Potentially stay within your carbon budget and avoid heavy penalties.
• Use renewable energy to support your carbon offset strategy.

Many of our clients are already using solar to future-proof their energy costs ahead of these stricter carbon tax rules.