This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 7/14/2019

 

Overview                                                                                                                                         

                                                                                                                                     Unit:  $ thousands

  2017  2018 2019
(estimated)
 2020
(projected)
Total Market Size54,00055,00056,00056,500
Total Local Production9,3009,50010,00010,500
Total Exports1,9502,1502,0002,500
Total Imports46 00048 00044 00045 000
Imports from the U.S.6,4007,0006,0006,500
Exchange Rate: 1 USD    

Total Market Size = (Total Local Production + Total Imports) – (Total Exports)
Data Sources:  Above figures are unofficial estimates obtained from industry sources.
Note:  Figures exclude water desalination and petroleum refinery equipment.

As is the case globally, pressure on industry from governmental institutions and civil society to reduce air pollution and its carbon footprint is steadily increasing. As a result, companies are either introducing new or upgraded air-pollution-control technologies.

The main sources of air pollution in southern Africa include industry (thermal power stations, smelters, cement factories, chemical factories), forest/savannah fires, biomass burning (use of firewood and charcoal), waste burning and transportation emissions. Air pollution is linked to many human health and environmental impacts including respiratory diseases, heavy metals poisoning, and increases in the levels of acidity or nutrients in lakes, thus affecting water quality and aquatic biodiversity.

The Air Pollution Information Network for Africa (APINA) is a key driver of the regional air pollution policy process within the Southern African Development Community (SADC) region.

South Africa passed a long-awaited Carbon Tax Bill. The carbon tax is aimed at businesses and companies that emit a high level of carbon, polluting the atmosphere.  Industries which rely on fuel consumption and electricity generation are the most frequent offenders. The first phase of the tax is in place from June 1, 2019 to December 31, 2022. At this stage the new law allows a tax rate of Rand 120 (approximately $8.48) per ton of carbon dioxide equivalent; total tax-free allowances during the first phase until 2022 can be as high as 95 percent.

Organizations that do not act to reduce their ‘carbon footprint’ will face punitive measures and be forced to pay tax to the state for producing higher amounts of air pollution. It is ultimately designed to encourage a transition to more environmentally-friendly ways of operating in various industries. There will be a period of grace for companies to begin implementing change.  However, the first stages of the tax look set to take effect from January 2020.  That gives businesses two years to comply with the law and bring their emissions down.

The tax rate is set at R120 per ton of CO2e (carbon dioxide equivalent) produced.  To allow businesses time for transition, a basic %age-based threshold of 60% will apply, below which tax is not payable.

In addition, the state is considering an acid mine drainage levy.  The levy, which has not been formulated yet, would make polluters pay for the cost of environmental damages.

Sub-Sector Best Prospects                                                                                                        

South African businesses are under increasing pressure to regard sustainability as a business imperative - prompted by a mix of fiscal interventions, tighter pollution laws and inspections, higher energy prices, a new corporate governance code and a global focus on climate change.
Three major issues dominate the South African Government’s environmental efforts:
  • The implementation of the stricter South African Air Quality Act
  • Regulation of the use of leaded gasoline, low sulfur diesel oil
  • Enforcement of regulations on management of hazardous waste materials (particularly asbestos)
Other matters that are enjoying closer scrutiny are:
  • Sustainable water usage, including grey water recycling
  • Industrial water effluent, especially Acid Mine Water Drainage (AMD)
  • Waste water treatment plants and basic sanitation
Industry sectors under pressure to improve their environmental record include iron and steel, cement, pulp and paper, and oil refining. Municipalities will have responsibility for monitoring ambient air quality and source emissions, while emissions producers will have to apply for new permits. 

Hazardous waste management is also a growth sector (including asbestos products and by-products). In 2012, the Integrated Industry Waste Tyre Management Plan (IIWTMP) of the Recycling and Economic Development Initiative of South Africa (REDISA) was approved and implemented.

Clean water supply is also a major concern. Significant pressure on water resources has meant more attention to water management systems, including by municipalities. At the same time, industrial water users are looking at the sustainable management of water. South Africa currently faces a water shortage due to poor planning, lack of investment, and drought.
The key sub-sectors offering the most opportunities for U.S. companies are:
  • Water Treatment Technologies and Services
  • Air Pollution Control and Monitoring
  • Hazardous Material Containment and Management
  • Solid Waste Management Technology
  • Sustainability Management, Auditing, and Carbon-Trading Expertise

Opportunities                                                                                                                      

Water Management
At current consumption rates, South Africa will be using more water than it has by 2025, according to the water affairs department. By 2030, it will be using 17% more, according to the 2030 Water Resources Group.

Water Use in South Africa
Agricultural Use (including irrigation)60%
Environmental Use18%
Urban & Domestic Use11.5%
Mining & Industrial Use10.5%

(Source: Nature Divided Land Degradation in South Africa, Ashwell, A & Hoffman, T, 2001)

The Cape Town water crisis stems from a combination of poor planning, three years of drought bad crisis management and rapid urbanization. The city’s outdated water infrastructure has long struggled to keep up with the burgeoning population. Now the city is playing catch-up, installing expensive desalinization plants to purify seawater and scrambling to tap the underground aquifer. This provides opportunities for U.S. companies involved in research and technology, desalination facilities and water treatment solutions to tackle this crisis.

Another critical issue is acid mine drainage (AMD) which is possibly the most pressing industrial remedial water management issue facing South Africa. AMD is a major environmental problem, and is associated with surface and groundwater pollution, and is responsible for degradation of soil quality and aquatic habitats.

The biggest issue facing big urban centers is the underground loss of bulk water due to failing infrastructure (25% of all water supplied).  In most cases, the reported drop in quality of potable water is due to lack of technical capacity of the local water authorities to manage water purification systems.  Water sanitation is another opportunity for U.S. water consulting firms to collaborate with local municipalities to address sanitation projects.

South Africa is considering coastal city desalination programs as an immediate technology option to address rapidly increasing water demands. The guiding policy document is the Department of Water Affairs and Forestry's 2009 Framework on Water for Growth and Development. This document tasks major coastal cities to urgently consider this technology. Government has set a target of producing 7-10% of all water from desalination by 2030.  Constructing of new desalination plants also presents an opportunity for U.S. firms.
Air Pollution Control and Monitoring

The Air Quality Act mandates large South African industrial groups to implement emission management and monitoring equipment. There is an opportunity for extensive implementation of emission filters and cleaner production technology to assist the large air-polluting industries in South Africa to reach mandatory emissions targets. There is demand for monitoring technology to measure emission levels in different industrial zones.

Hazardous Waste Management
Opportunities for U.S. companies exist in treatment of hazardous waste sites, containing chemical and hydrocarbon spills, and cleaning and rehabilitating of asbestos and gold mine dumping sites. The South African Government is also looking at a road freight management system to monitor hazardous material shipments and end-use compliance.
Solid Waste Management

Waste management in South Africa is based on the principles of the White Paper on Integrated Pollution and Waste Management (IP&WM) and the National Waste Management Strategy (NWMS) published by the Department of Environmental Affairs and Tourism in 1999 and 2000 respectively and the subsequent enhancement of the new National Environmental Management: Waste Act, 2008 (Act No. 59 of 2008).  South Africa supports the waste hierarchy in its approach to waste management, by promoting cleaner production, waste minimization, reuse, recycling and waste treatment with disposal seen as a last resort in the management of waste.

The implementation of so-called integrated waste management plans and policies by municipalities will create opportunities for U.S. suppliers. In the short- and medium-term, opportunities exist in the provision of residential solid waste technologies and rehabilitation equipment to assist local municipalities.

Web Resources                                                                                                      

Key Contacts
Department of Environment, Forestry and Fisheries (DEFF)
Website:  http://www.environment.gov.za

Recycling Economic Development Initiative of South Africa
Website:  http://www.redisa.org.za

Department of Water and Sanitation (DWS)
Website:  http://www.dwa.gov.za/
Water Research Commission
Website: http://www.wrc.org.za

Water Institute of Southern Africa (WISA)
Website:  http://www.wisa.org.za

Rand Water - South Africa
Website:  http://www.randwater.co.za  

For More Information
The U.S. Commercial Service Commercial Specialist for the Pollution Control & Envirotech Sector in Johannesburg, South Africa can be contacted via e-mail at: Mohammed.essay@trade.gov 
Phone: +27-11-290-3025;
or visit our Website:  http://export.gov/southafrica/index.asp.

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.



South Africa Environmental Technology Trade Development and Promotion