The Department of Public Enterprises (DPE) has started a process of defining a policy to guide State-owned enterprises (SoEs) with regard to climate change and the green economy, Minister Malusi Gigaba said on Thursday.

SoEs would be required to develop and submit strategic plans outlining how they planned to engage with climate change risks and opportunities.

“In addition, the plan needs to provide an outline of how broader government support and resources can be used to accelerate or enhance the implementation of the plan. Through our monitoring of the implementation of the plan, the department will be able to track SoEs impacts and learning processes related to the climate change challenge,” Gigaba said at the DBSA Knowledge Week on greening infrastructure programmes in Midrand.

The policy was still in draft form and was being discussed with SoEs.

Speaking at the Development Bank of Southern Africa (DBSA) Knowledge Week on greening infrastructure programmes, Gigaba stressed that South Africa, which is one of the highest per capita carbon emitters, has identified the transition to a ‘green economy’ as an opportunity to develop new industrial and technological capabilities to support economic growth.

The Minister said that SoEs could play a key role in catalysing diversification to a green economy.

South African Airways (SAA), for example, was vulnerable to policies in countries in which it operates that impose penalties and taxes on carbon emissions.

“Indications are that SAA will require that biofuels make up half its fuel supply by 2020, in order to avoid future penalties.

“This will create a pressing demand for an extremely large quantity of biofuels, which can form a base-load against which a fully vertically integrated biofuels industry can develop in South Africa and in the region,” Gigaba said.

This would require a coordinated government programme that promoted investment in second generation biofuel crops in Southern Africa.

The Minister also said that the DPE was involved in the South African Renewables Initiative, or SARi, which will officially be launched at the seventeenth Conference of the Parties (COP 17) climate conference later this year.

This programme is aimed at enabling the development of renewable-related industrial capabilities through defining a funding mechanism to leverage international climate finance. This would ensure that a critical mass of renewable energy could be procured without imposing incremental cost burdens on the fiscus or South African consumers.

The DPE intends hosting a workshop at the forthcoming COP 17 event, with a number of State shareholder managers from key emerging economies on how as shareholder managers and the companies in their portfolio can most effectively engage with climate change.