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Mail & Guardian
31-07-2025
- Politics
- Mail & Guardian
Emphasise the ‘just' aspect of the just energy transition
Undermining: Communities that rely on fossil fuels for their livelihoods must be taken into consideration in the transition to cleaner energy. Photo: Delwyn Verasamy South Africa's nationwide electricity blackouts have been suspended, but the nation still faces a 'risk of another energy crisis', the 2025 But, for the transition to be fair and effective, it must be anchored in strategies that prioritise equity and inclusion. Without this foundation, inequalities and the marginalisation of vulnerable groups, such as those who rely on fossil fuel industries and infrastructure for their livelihoods, will intensify. Through the implementation of several national frameworks and strategic plans to execute the shift, South Africa's commitment to a just transition is evident, but the real challenge is ensuring it lives up to the promise not only of energy security but also of justice. The Examples include a poorly maintained and ageing Eskom was a primary site through which 'state capture' was executed, further undermining justice in energy reliability, access and affordability. These issues underscore the importance of prioritising a shift toward more sustainable and decentralised energy sources — a vital component in addressing the energy crisis. Based on the The Just Transition Framework is a strategic plan to guide the transition's actions and desired outcomes and affirms the commitment to inclusion and equity. It states among the goals 'decent work for all, social inclusion, and the eradication of poverty'. Across the initiatives carried out thus far, such as the Just Transition Framework and Implementation Plan, the significance placed on socio-economic considerations is encouraging. But acknowledgement is just the starting point and actualising these considerations demands more than mere words. There are considerable disparities in the extent to which social equity measures are integrated into provincial and city-level transition plans. In the findings of a research report by SouthSouthNorth and Net Zero Tracker it emerged that only the Western Cape and Johannesburg have extensive 'just' transition considerations in place to support communities during the shift. These considerations mainly refer to social justice factors and principles: equity, fairness and access. The majority of the country is still behind in establishing strategies that realise the core principle of the just energy transition — that 'no one is left behind'. The lack of comprehensive social equity strategies in the provinces for the transition is alarming. Most vulnerable are regions reliant on coal, which accounts for more than 80% of our energy supply. Beyond the harm to the natural environment, dependence on this fossil fuel is a concern because it amplifies the potential adverse effects associated with the decarbonisation process. Examples include loss of livelihoods, job redundancy, a skills mismatch post transition, compromised energy security and potential economic devastation for coal-reliant communities. These are likely to affect, to varying degrees, any country undergoing a shift to green energy but, given South Africa's dependence on coal both for export revenue and generating electricity, mitigating these negative effects becomes proportionally greater. Although there are considerable risks associated with the transition, this does not negate the need to shift to greener energy sources and should not be used to oppose the transition. Hypothetically, if we persist with our current energy system, remaining a fossil-fuel-dependent country will have considerably worse socio-economic implications than those of the just energy transition. Indeed, the hidden costs of coal are significant. Drawing from insights in It is thus clear that the most sustainable and prudent move is to proceed with the transition. With the compelling argument that the transition is inevitable, it becomes even more important to reinforce that it should be carried out justly. But at the provincial The question policymakers ought to consider is, how can we effectively actualise the 'just' element — prioritising inclusion and equity — of the energy transition in the immediate, intermediate and longer term? National frameworks such as the Just Energy Transition Framework, the Just Transition Investment Plan and the Implementation Plan include moderately comprehensive 'just' principles, considerations and measures. The issue is many provincial and city-level plans do not have the same scope as national frameworks. There are also clear inconsistencies and a lack of nationwide alignment in relation to the development and implementation of transition plans that are 'just'. Some provinces have comprehensive plans in place; others have minimal to none. Moreover, there are intra-provincial discrepancies — meaning that urban centres (such as Johannesburg and Cape Town) in a province often exhibit more robust transition efforts than the province where they are situated. This nationwide misalignment is a major obstacle to overcome in ensuring that no one is left behind during the transition process. The importance of taking a people-centred, bottom-up approach in all stages of the transition cannot be overstated. Community consultation and participation ensures the needs and interests of stakeholders are incorporated into policy. The result of this is two-fold: it reinforces the principle of nobody being left behind and strengthens grassroot-level support and trust in the transition. As stated by Narend Singh, the deputy minister of forestry, fisheries and the environment, 'It is essential that we approach this transition with humanity, providing support, training and creating new opportunities within the renewable energy sector.' Interventions that foster inclusion are reskilling and training initiatives as well as targeted social protection programmes. Actualising these is a fundamental step in translating the 'just' dimension of the energy transition into practical implementation. To ensure the transition aligns with its intended purpose, it ought to have a strong foundation rooted in concrete and consistent support strategies, as well as inclusion and equitable access to transition benefits. Ignoring these fundamentals risks intensifying socio-economic inequalities. Ultimately, the 'just' aspect of the just energy transition is both a practical necessity and a moral imperative for building South Africa's sustainable future. Sisanda Lupondwana is a research intern in the Natural Resource Governance and Climate Change programme at Good Governance Africa.
Yahoo
25-07-2025
- Business
- Yahoo
As US Tariff Pressure Grows, Can Bangladesh Still Manifest a Just Transition?
On a sunny, cloudless June afternoon in Stockholm, days before she was due to appear on stage at the Global Fashion Summit in Copenhagen, Kalpona Akter, the longtime labor activist, was feeling wistful. She said she couldn't help but compare the difference between working conditions in the Swedish capital and those of her native Bangladesh, where she was forced to sew clothing for Western brands amid the constant threat of physical abuse while still a child. The collective bargaining agreements that undergird labor relations in the more progressive parts of the global North were likely hard-won, Akter allowed. 'We don't have that environment yet,' she said. The concept of a 'just transition' emerged in the United States in the 1970s after the now-defunct Oil, Chemical and Atomic Workers Union called for a fund to support workers who were losing their jobs because of a deluge of new environmental regulations that necessitated a career change. In the decades since, it has been picked up by the likes of the International Labour Organization and the United States to refer to helping carbon-dependent communities and workers cope with the impacts of climate change through decent work that 'leaves no one behind.' More from Sourcing Journal Inditex Has a Flights and Rights Problem, Activists Say Trump's Trade War Could Kill Lesotho's Garment Industry Is Amazon's Third-Party Marketplace Stoking Worker Exploitation? Bangladesh is certainly a country in transition, Akter said, but whether it'll be one that's 'just' is another matter entirely. When the autocratic Sheikh Hasina government was toppled last year, millions celebrated what they saw as a return to true democracy. The ensuing months, however, have seen the struggling interim government beset by criticisms from political opponents for delaying new general elections due to the slow pace of reform. As political uncertainty grows, so has working-class unrest as workers face 'multiple pains,' she added. Then, just as the South Asian nation was making headway to stabilize an economy that has been continually thwarted by high inflation and low growth, the United States announced it would be withdrawing any foreign aid and placing an additional 35 percent tariff (slightly down from an original 'Liberation Day' figure of 37 percent) on all Bangladeshi imports. Akter's biggest concern is that this sum will be squeezed out of workers when there's nothing left to squeeze. Matters are 'precarious' for world's second-largest exporter of clothing after China, said Mohiuddin Rubel, an additional managing director at Denim Expert, a jeans manufacturer in Chittagong, and former director at the Bangladesh Garment Manufacturers and Exporters Association, the trade group better known as the BGMEA, stopping just short of using the term 'bleak.' Already, the gutting of the U.S. Agency for International Development's programs has caused employment loss and weakened many of the support systems that Bangladesh's 4.1 million garment workers relied on for rights training, legal representation or access to emergency funds. If the White House's so-called 'reciprocal' tariff goes through on Aug. 1, it could raise duties for Bangladesh-made garments from an average of 15.5 percent to roughly 50 percent, posing an 'existential threat' to a sector that accounts for nearly 85 percent of the country's exports. In 2024, the United States imported roughly $7.4 billion in apparel from Bangladesh. While there is still the possibility of further negotiations—Bangladesh has promised to buy more U.S. cotton, wheat and oil if it'll help close the $6.2 billion trade deficit—some experts believe that the rate will not go below 25 percent even in a best-case scenario. This could prompt brands to shift their orders to cheaper geographies, decreasing Bangladesh's volume of exports. 'This dramatic increase renders Bangladeshi garments significantly less competitive in the crucial U.S. market compared to rivals like Vietnam, potentially leading to order cancellations and massive job losses,' Rubel said. 'The industry is actively seeking diplomatic solutions to mitigate these tariffs.' Already, manufacturers operating on razor-thin margins have been asked by brands to absorb some, if not all, or the 'universal' 10 percent tariffs, he said. Small to medium-sized factories, in particular, will not be able to bear any further costs without being forced to sell their goods at a price below that of compliant production. But a just transition, Rubel added, hinges on the industry's ability to navigate its economic pressures while investing in renewable energy, green technologies, reskilling its workforce and ensuring worker protections in a nation where fossil-fuel use is still deeply entrenched and the unionization rate is only 5 to 7 percent. 'There's a notable absence of a clear, integrated policy framework that systematically combines climate action with labor rights and social protection,' he admitted. 'This often results in fragmented, ad-hoc initiatives rather than a coherent transition strategy. Ministries dealing with energy, labor and finance also frequently operate in silos, hindering effective inter-ministerial coordination and delaying the implementation of sustainable policies.' It doesn't help that the effects of a warming planet are becoming increasingly palpable in Bangladesh, where heat waves are becoming more frequent and intense and the risk of flooding is anticipated to grow. A pair of 2023 studies by Cornell University ILR School's Global Labor Institute estimated that the capital of Dhaka will experience nearly 65 days that exceed a wet-bulb temperature of 30.5 degrees Celsius (86.9 degrees Fahrenheit)—enough to trigger moderate symptoms of heat stress and diminish productivity—in 2030 and more than 104 in 2050, a 63 percent uptick from 2004-2014 levels. A projected 36.9 percent of Dhaka's population will be at risk of riverine flooding in 2030 and 37.1 percent in 2050. All these, said Jason Judd, the institute's executive director, 'conservative' calculations. And with temperatures hitting 43.8 degrees Celsius (110.8 degrees Fahrenheit) in some of Bangladesh's northern and southern districts last year, garment workers are becoming more vulnerable to exhaustion, nausea, fainting, heatstroke and possibly death—that is, if a catastrophic flash flood doesn't upend their lives first. 'When it comes to the other side of transition—adaptation—the need there is also clear; that's what we've been arguing with our analyses,' Judd said. 'The work we're going to do next is on how heat is showing up in workers' lives, both in the workplace and at home. We're enlisting brands, suppliers, workers' organizations and researchers to start running the numbers on these heat interventions for factories and homes. We want to see what's needed in terms of investment and what the return on investment would be on productivity bounce-back.' Social versus environmental impacts The timing couldn't be more apt: Sarah Krasley, founder of Shimmy Technologies, an AI-powered, mobile-based learning and job-matching platform that helps upskill workers in countries like Bangladesh, joined the Global Labor Institute this month as a visiting fellow to study what happens at the intersection of automation and climate adaption in the labor market—apparel production especially. Shimmy itself was hurt by USAID cuts, which required some 'tough calls,' including the closure of its physical offices. 'We have been navigating a period of realignment for the last few months,' Krasley said. 'But the mission that drives us hasn't changed, and with all the movement in labor markets, neither has the need for the work. Automation and reskilling pathways are critical components of just transition strategies.' Reskilling is the key word. Automation that promotes efficiency, optimizes resource use and reduces waste—all things that can spur decarbonization efforts—can be a double-edged sword if the character of the workforce doesn't change along with its adoption, said AKM Ashraf Uddin, executive director of the Bangladesh Labour Foundation, a labor rights nonprofit. A recent study the organization conducted found that 30 percent of workers have lost their jobs because of new technologies that aren't accompanied by worker engagement and training opportunities. Another survey spotted a minor but growing trend of women leaving their factory jobs for home-based ones because they could not cope with the extreme heat of their industrial workplaces, many of which are old, stuffy and ill-equipped for long bouts of extreme heat. Their ranks in the less visible parts of the supply chain will likely swell as more people from across Bangladesh are forced to move to cities like Dhaka because of climate-related displacements such as flooding, tropical cyclones and droughts. 'Where are they going? They are going to the informal sectors because they have no skills,' Uddin said. 'And then they won't have social protections or unemployment benefits. My concern is that policymakers aren't thinking of all this. We need a national just transition roadmap for all different sectors, not just readymade garments. This is quite a critical time.' And it's not just the government that should be held responsible. A general consensus is that Western buyers that have prospered from Bangladesh's back-breaking labor for the past several decades need to step up, beginning with fair prices and fair commitments. Despite the country housing 230 garment factories certified under the Leadership in Energy and Environmental Design program—more than any other in the world—these green facilities don't receive green premiums, making it difficult for suppliers that have made strides to reduce their carbon emissions to also invest in their employees, as a Business & Human Rights Resource Centre report pointed out last month. What's needed, it said, is a 'holistic' approach to factory 'greening' that includes freedom of association, better compensation and stronger job security so workers don't resort to paying out of pocket for fans and other quality-of-life measures with their already-meager wages—another topic of persistent contention. 'So as technological fixes to the climate emergency and decarbonization move into workplaces, how do we make sure that it's not just international brands benefiting, but that workers feel like their work and lives are more thrivable, more bearable,' said Natalie Swan, the organization's labor rights program manager. 'And how do we make sure that it's an opportunity to upskill the workforce, increase decent work, rather than further the race to the bottom?' Even fashion's most progressive brands have a long way to go, Swan said. The report found that of the seven companies with the most ambitious climate goals, just one—Zara owner Inditex—has a public climate transition plan that mentions workers. Plus, not a single one has laid out a stand-alone just transition policy. 'I think that brands are essentially saying, 'Well, we have a suite of human rights policies and they are fit for purpose,'' she said. 'Our research has proved that they are not fit for purpose to meet the new challenges of the industry. Health and safety issues have direct human rights implications, have direct production implications. And we have seen that brands' policies are completely siloed when it comes to talking about social and environmental impacts separately. That is not the world that we're living in. We're seeing that brands are not meeting the moment.' Or paying for it, either. H&M Foundation, the philanthropic organization belonging to H&M Group's founding family, is a rare organization that's ponying up. Last month, it pledged 9 million euros, or $10.5 million, to be divvied up over three years, to 'scale a just transition' in Bangladesh's apparel sector through a 'collective impact initiative' it created called Oporajita, which partners with local grassroots groups to center women as 'key agents of change in a future-resilient, low-carbon RMG industry' through skills, gender-sensitive and entrepreneurship training. Phase 2 of this, H&M Foundation said, will bring together factory managers and workers to co-create tools and guidance on climate adaptation and heat stress management, including risk assessments and hydration support. 'We're going deeper—embedding climate adaptation, worker-led governance, and systemic advocacy into the heart of the program,' said Charlotte Brunnström, H&M Foundation's strategy lead. 'The initiative is rooted in the belief that women garment workers—who are among the most vulnerable to climate and economic shocks—must be at the center of any meaningful transition. This isn't a short-term project. It's a commitment to shift what's considered 'normal' in the industry by demonstrating that dignity and decarbonization can go hand in hand.' Oporajita's evolution was informed by a 'just climate transitions in Bangladesh' report that H&M Foundation and the C&A-funded Laudes Foundation commissioned earlier this year. The program, Brunnström said, is a 'direct response' to the report's call for integrated 'justice-centered' climate action that embeds worker agency in governance and advocates for policy changes. Future-proofing an industry The way Sujata Rathi, director of nonprofit consulting firm FSG and an author of the report, sees it, there are a slew of possible futures for Bangladesh. The best one, 'Green Forest,' involves a world where sustainable fashion is the norm; the country's garment sector has embraced low-carbon processes, climate-resilient practices and accountability to workers; and the development of multiple other sectors has led to a low youth unemployment rate, high wages and respectable working conditions. The least ideal, 'Hot Desert,' envisions a timeline where global apparel markets do not transition, yet Bangladesh is left behind because of high costs and supply chain disruptions that result in mass unemployment. Where the country lands on the axes of global demand versus competitiveness by the close of the decade depends, in part, on how it responds to developments in the European Union, still its largest single market with nearly $20 billion in apparel exports in 2024. As of now, all trajectories are still possible. 'Europe is already seeing regulatory changes that are pushing for a lower carbon footprint, even for imported materials,' Rathi said. 'If Bangladesh is able to keep up with these regulatory requirements and start producing products at a lower carbon footprint, there is a huge opportunity for it. So the earlier Bangladesh is able to start making these investments, the better position it will be to be able to stay competitive in the market and maybe even gain share from other countries.' Climate change isn't just a human issue but an economic risk as well, she said. Flooding and extreme heat could prompt a rise in absenteeism if people aren't able to make it to work because of impassable roads, illness or the anticipation thereof. Production lines could shut down, resulting in lost earnings for everyone involved. Yet heat guidance for the industry remains vague or nonexistent. The fact that heat stress is an occupational safety and health issue—not to mention a make-or-break business case—hasn't quite floated to the top of mind for most fashion brands, Rathi said. Even simple fixes such as more frequent water breaks can improve worker efficiency, she added. 'If you look at what's happening in terms of climate change adaptation, there's a lot of activity happening in Bangladesh, but there's a gap in terms of what needs to happen in the factory to ensure that workers continue to stay competitive,' she said. 'A lot of initiatives talk about improving workers' lives and livelihoods, but very few of them actually say, 'I'm consulting with workers' or 'I'm including workers in these decision-making bodies where they actually have a voice and a say in the decision-making.' That's an important piece to think about.' The question of who foots the bill for a just transition is a question Miran Ali, managing director of the Dhaka manufacturer Bitopi Group and a former vice president of the BGMEA, has been grappling with for some time. The Apparel Impact Institute, a multi-stakeholder organization that identifies and funds low-carbon innovations, estimates that Bangladesh needs a $6.6 billion investment to cut emissions in half by 2030, yet only $1.8 billion is currently available or anticipated, leaving a $4.8 billion shortfall. It was Ali's discussions with other suppliers, which then escalated into larger dialogues with national manufacturing trade associations, that culminated in June with the founding of the Apparel and Textile Transformation Initiative, or ATTI. Its goal: to take the talk of 'collective action' around sustainability and turn it into more than idle prattle that generates only the false appearance of progress. Ali will serve on ATTI's global council as an interlocutor for Bangladesh, which has signed up alongside Turkey to pilot what is being described as a 'three-phase concept': assessment, solutions design and implementation. 'The buyers need to start coming to the table, and they can't just keep on saying, 'Well, I want this and that and zero this and zero that,' and not be around when we need them,' he said. 'We don't deny that brands are also interested in sustainability and all of that—that is a given. What is a fact, however, is that brands are not on the same page themselves, and they have the same suppliers. You must have the tip of the spear, a group of innovative, forward-looking brands and their suppliers who will set the trend for everybody else. ATTI will help do that.' Ali didn't want to talk about U.S. tariffs, which he sees as a 'moving target.' He said that Bangladesh is open for business, open for discussion and open to negotiate. It is, however, not a 'servile nation.' 'We want whatever we do with the U.S. to be sustainable and that it will not affect our very important relationships with the U.K., the European Union, Japan, China, to begin with,' Ali said. 'So, yes, Bangladesh needs a deal, but it has to be a good deal, otherwise it would not be worth it.' And if suppliers are forced by their buyers to bear the brunt of the tariffs when it comes down to it, decarbonization is bound to fall by the wayside. In the end, it comes down to simple math. It's going to be like a Covid-19 pandemic redux in some ways, said Vidhura Ralapanawe, executive vice president at Epic Group, a garment manufacturer with four hubs in Bangladesh. 'We have to look at this climate investment in the context of large economic issues for the country on one side and for the fashion industry on the other side,' he said. 'I think the real problem is that we really don't know how the customers are going to react. I think on the business side, the investments will slow down, for sure. From a national point of view, nobody's going to be thinking about energy transition because they are just trying to figure out something much more basic, which is employment for the masses and the overall economy.' But until suppliers and buyers are on equitable footing, there can be no 'transition,' Ralapanawe said. 'My point on that is that we are struggling to do what the brands expect us to do, which is only to talk about decarbonization and not about adaptation, even for heat stress. But it has to happen. My question is, how bad are the heat waves going to have to be?' Solve the daily Crossword
Mail & Guardian
03-07-2025
- Business
- Mail & Guardian
Consulting companies are profiting off the climate crisis — report
Major consulting companies and some of the big accounting firms in South Africa are cashing in on the climate crisis, a new report has revealed. Major consulting companies and some of the big accounting firms in South Africa are cashing in on the climate crisis, despite conflicts of interest, and a lack of expertise and ambition, undermining South Africa's The investigation highlighted that management consultants and institutions linked to donor countries are receiving the lion's share of the grant funding meant for South Africa's just energy transition projects. The international financial pledge towards South Africa's shift from coal to cleaner sources of energy — while ensuring that coal-dependent communities and workers are not left behind — is $12.8 billion and $2.8 billion of pledged funds has actually been committed to projects, according to Open Secrets. A total of $100 billion is said to be needed for the country's just transition. 'Much of the grant funds are caught in a circular process that sees little money arriving on the ground in South Africa,' the report states. 'Instead, it 'passes through' South Africa only to again make its way into the hands of international platers. Where it is paid to South African entities, many of them are private consultants working for international firms.' The findings show that 65% of the committed grant funds have gone to private corporations and organisations as implementing entities and less than 25% of the grant monies have gone to local implementing entities, including non-governmental organisations, public sector institutions and universities, lead investigator Zen Mathe said. 'We have also found that often there is a direct link where the money comes from — so the donor country — and where the money goes, so the implementing entity and, as a result, consulting firms, are playing a fundamental role in shaping South Africa's response to the climate and energy crisis,' Mathe told a forum on the report. 'It's concerning that private consultants have been given this opportunity to corner the market for advice on the climate crisis and a just transition, with little to no scrutiny.' The report shows that most management consultancies have made fortunes by servicing the interests of fossil fuel companies and some of the world's largest polluters. These companies' climate advice also 'routinely lacks the ambition required to push for the systemic change that the climate crisis demands'. The report questions whether these firms have the necessary skills and expertise to do the work they are contracted to do. The use of consultancy firms to guide policies on the just transition undermines the expertise and capacity within the state and is a risk to democracy, it claims. 'The undermining of state capacity and capture of the policy space by corporate interests closely tied to fossil fuel interests are risks to the democratic process. Where the voices and interests of the public are sidelined, the risk is heightened.' It added that a lot of these discussions were happening behind closed doors, with little transparency. The Boston Consulting Group (BCG) has been named as one of the major firms benefiting from the climate crisis, alongside McKinsey & Company and Bain, which were also implicated during an investigation into state capture in South Africa. 'BCG has positioned itself as a leader on climate-related consulting around the world and cemented itself as a key partner in South Africa's energy space,' the Open Secrets report states. This is despite having ties with petrostate Saudi Arabia and companies known to be major polluters, including Saudi Aramco, Shell and ExxonMobil, as well as being a consultant for Sasol — one of the world's worst polluters. 'Despite BCG's clear conflicts of interest, it has continued to play a key part in global climate negotiations,' the report states. The consultancy was a partner at the 26th UN climate change conference (COP26) and also played a role at COP27, before it was chosen as the 'principal strategy and action partner' for COP28 in 2023, which was held in the United Arab Emirates. According to the report, a record number of fossil fuel lobbyists — 2 456 — were present at the conference that year. 'BCG's partnerships and choice in clients, who are amongst some of the top polluters in the world, has called into question its role as a strategic partner for the last three global climate conferences,' Open Secrets said. 'If the aim is really to pursue the transition to a low-carbon economy, it should surely be of concern that a firm that applauds fossil fuel companies for supposed 'innovation' — all while those companies double down on models incompatible with addressing climate change — should play any lead role in the most important global negotiations to tackle climate change.' The report said from 2019 to 2021, BCG took on over 750 climate-related projects for over 300 clients and it made around $1.1 billion from climate consulting in 2021, which could account for almost a third of its sales by 2027. In response to questions from Open Secrets about its work on South Africa's just energy transition, BCG said: 'As is already a matter of public record, our various efforts with multi-stakeholder coalitions (e.g. NBI [National Business Initiative], Busa [Business Unity South Africa], The Energy Council of South Africa) have involved many contributors from many different organisations as part of transparent consultation processes, with BCG providing analytical and technical modelling support. 'We are proud of our contribution to South Africa's JET,' it added. Sasol confirmed that it takes consultation from BCG and various other firms on its projects, adding: 'We do not publicly disclose the specifics of all our consulting engagements or their ongoing status.' McKinsey & Company told Open Secrets that it has been open about its work with fossil fuel clients and 'hard-to-abate sectors and see no contradiction with our commitment to the energy transition … 'We are proud to work with clients in all of these sectors — including in oil and gas.' The big four accounting firms, EY, Deloitte, KPMG and PwC, have punted climate-related and environmental social and governance projects, but only two, Deloitte and PwC, are currently working on just transition-related projects and benefiting from the grants portion of just energy transition project funds, according to the report. These two firms have also been In July 2024, 'just transition' was officially defined under the Climate Change Act as 'a shift towards a low-carbon, climate resilient economy and society and ecologically sustainable economies and societies which contribute towards the creation of decent work for all, social inclusion and the eradication of poverty.' The implementation and interpretation of the Act requires decision-making that considers the needs of the most vulnerable, head of legal at Open Secrets Ariella Scher said. 'It's from that perspective that this report demonstrates that that doesn't seem to be what's happening. What is happening is that the most powerful, and those who have always been in charge of our economies, are just continuing to benefit,' Scher said. The authors recommended that money for the just energy transition be funnelled to the South African state, not only to private sector institutions, and should be in compliance with the Public Finance Management Act (PFMA). Additionally, the funds must be monitored and recorded in a publicly accessible repository and 'spent in a manner that is determined by the South African state itself', said Mathe. 'This allows for financial oversight, but also really importantly, democratic oversight because it subjects the spending of state monies to financial audits parliamentary oversight and so we have greater accountability, if we're following what the PFMA says,' Scher added. Open Secrets is also calling for more regulation. 'There must be public debate about how we hold these unelected private technocrats to account. We must critically consider the impact on South Africa's pursuit of an energy transition that is just and benefits the most vulnerable in our society and those that are most immediately affected in our society,' said Mathe
Mail & Guardian
02-07-2025
- Politics
- Mail & Guardian
The current trajectory of the just energy transition risks deepening inequalities
South Africa needs to change its top-down approach, consult communities and fast track the delayed Integrated Energy Plan Youth involvement; energy access; education and empowerment; beneficiation and ownership for marginalised people are the biggest concerns facing the just energy transition in South Africa. As things stand, people might not be adequately educated about the concept of the just transition to a low-carbon economy, let alone know how they could benefit from such an economy. A study by the UN Development Programme Accelerator Lab in a coal mining community close to Eskom's Lethabo Power Station and Seriti New Vaal coal mine in the Free State showed that only 36% had even heard of the transition. While 48% of the respondents expressed grave concern about climate change and how it affects their homes and livelihoods, the study showed that 70% of them have suffered from coal-related illnesses. Past coal extractive initiatives might have massively contributed to compromised health of the people living in those communities by exposing them to air pollution from carbon dioxide. It is the responsibility of the government to educate and capacitate people on how the just transition would help to reduce climate change and help them to participate economically in the transition. The government's promotion of gas as a transition fuel raises serious concerns because the increased use of gas, especially in electricity generation, would result in more emissions of methane and other greenhouse gases. This could cause greater harm than the emission of carbon dioxide. Up to now, South Africa's energy transition appears to have been characterised by top-down decision-making, while grassroots communities are forced to deal with weak energy infrastructure and high energy tariffs. In a country with 17.8 million households, according to the 2023 State of the Nation address, 16 million (89.9%) of those are connected to the grid but 3.2 million (20%) of the connected households experience an unreliable service. The government-led just energy transition implementation strategy — up to now — has failed to adequately consult people to establish their needs. Instead, grassroots community concerns have been overlooked. Their voices are often excluded from decisions which directly affect them. The just energy transition requires good governance, beginning with proper consultation with mineral-rich communities to establish consent and inclusion and adopting non-harmful beneficiation strategies which can bring economic development to local communities. The strategy should include a retraining programme for extraction, energy generation, storage, transmission and distribution workers to mitigate against job losses. Renewable energy generation — which can be a safer and cheaper alternative to fossil fuel energy generation — could create jobs and include local entrepreneurs. But the Just Energy Transition Funding Platform, which was initiated by the International Partners Group in 2021, now led by the Presidential Climate Commission, is yet to address the funding needs of young entrepreneurs and their economic inclusion and participation in the transition. The International Renewable Energy Agency states that the success of climate-friendly technologies is reliant on a global transformation of the fossil fuel industry, meaning that South Africa, as the largest carbon-emitting country in Africa, has a part to play. The current trajectory of the energy transition risks replicating many of the injustices found in the fossil fuel industry if it is not done properly. The introduction of new energy technologies risks mineral-rich communities being displaced if the industry is not rooted in good governance. South Africa is rich in critical minerals, such as platinum group metals, manganese, vanadium, nickel and rare earth elements, which are components for renewable energy production. Investing in infrastructure to process these raw materials would be beneficial for South Africa. It has the potential to create desperately needed jobs and propel technology transfer and skills development. This contrasts with the current practice of exporting materials at a low cost for processing and importing materials back at a much higher cost. The government must also prioritise youth involvement in the energy transition through skills transfer and financing for renewable energy projects. A bottom-up approach would ensure inclusive involvement. In May 2023, after legal action by NGO The Green Connection, President Cyril Ramaphosa gazetted bringing section 6 of the National Energy Act into operation, which calls for the preparation of the Integrated Energy Plan from April of 2024. A draft plan was expected in March 2025, but has been postponed to September 2026, which will be more than three years from the time of the initial announcement. If a draft energy plan is only due in September 2026, and it is to be followed by public consultation — which is not a once-off event — the country might not be operating from a well-thought out, financially strategic energy perspective for at least another two years. The Integrated Energy Plan remains a critical legal framework to guide energy investments for the country and it is imperative that the government treats its development as a matter of urgency. Lisa Makaula is the advocacy officer at the Green Connection.
The Guardian
29-06-2025
- Business
- The Guardian
‘It breaks my heart': how a refinery closure is hitting jobs and politics
Every morning in Grangemouth, chemists at Celtic Renewables's small factory feed a vial of microbes with a precisely tailored cocktail of food – liquid residues from the scotch whisky industry. In vessels surrounded by a web of metal pipes and gleaming stainless steel valves, the microbes multiply into something other than drink: a starter solution for batches of acetone, butanol and ethanol – chemicals essential for countless everyday products. Celtic Renewables wants more: a plant 10 times its current size. That could form part of plans to sustain Scotland's chemicals industry after Grangemouth sustained a crushing blow: the closure of the 100-year-old refinery in April, with the loss of 400 jobs. The huge complex will be reduced to a fuel import terminal, staffed by only 75 people. As many as 4,600 jobs in the refinery's supply chain could also be affected. That closure has made Grangemouth one of the earliest tests of a 'just transition': the idea that the economy can move relatively painlessly from fossil fuels to net zero, helped along by judicious government interventions to spur new jobs in place of the old. The Labour government fears that failure could mean voters turn their backs on it – and on the pledge to reach net zero carbon emissions by 2050 – throughout what remains of Scotland's largely fossil fuel-dependent industry. Climate action by government remains popular in Britain, but parties on the right, and particularly Nigel Farage's Reform UK, believe opposition to net zero can win them power. As the government this week unveiled a new industrial strategy, this article – the second in a series on the battle for Britain's deindustrialised areas – looks at the future for one of Scotland's industrial icons. After the second world war, deindustrialisation wiped out much of the coal mining, shipbuilding and steelmaking that dominated employment in Scotland's central belt from Glasgow to Edinburgh. While those industries all but disappeared, Grangemouth held out, refining crude oil to feed Scotland's cars and planes taking off from Edinburgh and Glasgow. Grangemouth's refinery traces its history back to 1924, making it the second oldest in Europe, but since 2005 it has been part of Jim Ratcliffe's Ineos chemicals empire. Ratcliffe's investments bolted together assets that others did not want, and generated huge profits. Ineos agreed a deal in 2011 for Chinese state-owned PetroChina to partner in a joint venture, Petroineos. Petroineos executives argued in Scottish parliamentary hearings that Grangemouth was not able to compete with newer, more efficient plants in the Middle East and Africa. UK chemicals output has slumped 42% since peaking in March 2020, according to the Office for National Statistics. Ratcliffe has faced significant criticism for cutting jobs in chemicals and at Manchester United Football Club – which he took control of last year. But he has claimed that it was UK energy policy, not his decisions, that made Grangemouth unviable. Chemicals companies report UK energy costs are five times higher than in the US and well over double those in the EU, according to the Chemical Industries Association, a lobby group. Ratcliffe is also a staunch opponent of carbon taxes on businesses. 'We are witnessing the extinction of one of our major industries as chemical manufacture has the life squeezed out of it,' Ratcliffe told the Financial Times in January. Deindustrialising Britain achieves 'nothing for the environment,' he said. 'It merely shifts production and emissions elsewhere.' Cutting energy costs was the flagship measure of the government's industrial strategy, with exemptions for chemicals businesses for the costs of renewable energy programmes and discounts for levies to fund the grid. The measures did not include short-term help on driving down wholesale prices, the key complaint of big energy users. What do you do with a tangle of pipes, furnaces and crackers like the Grangemouth refinery? A Scottish government-funded study, known as Project Willow, described nine options for chemical industries that could happen on the site, including plastics recycling, making chemicals from wood, or – perhaps most ardently desired – making so-called sustainable aviation fuel (SAF). Westminster has set aside £200m to support private sector investments at Grangemouth, plus £25m from the Scottish government, to support projects. Senior government sources said more money could be available if the right projects come up. Yet each of those options comes with a price tag, ranging from the relatively manageable (£15m for turning organic waste into methane, with up to 70 jobs) to the truly enormous (up to £2.1bn for a SAF plant, and 270 jobs). The transition does not feel pain-free in Grangemouth town centre, with the refinery chimneys visible from the end of the road. A pleasant park, rows of sandstone homes and later semi-detached houses evidence the prosperity of the early 1900s and the boom times of the 60s and 70s, but the town also has several areas counted among the 10% most deprived in Scotland. Manufacturing in 2023 accounted for 11.1% of jobs in the broader Falkirk council area. That compared with 6.9% across Scotland that year – down from 35% in 1951. Mohammad Saleem, the shopkeeper at Sweet Talk, is already feeling the effects of the refinery closure, and has cut back opening hours, with fewer workers passing through to grab chocolate or a paper on the way to work. 'Quiet,' is his description of business in recent months. 'It used to be good before corona. After corona, that's it. This time, lunchtime, you would see crowds. Now you don't see anybody.' 'It's a disgrace,' said another shopkeeper in the centre. 'But what can you do?' Marilyn McIlvaney, the secretary of the Kersiebank Community Project, a volunteer-run charity shop that runs a food bank, said they had seen more people under pressure in the weeks since the closure of the refinery. Redundant workers got a relatively generous 18 months of pay, but they are still tightening belts. 'They're cutting back,' she said. 'It's having a knock-on to the other businesses. It's getting worse. Food banks are queueing out the doors – some of them [users] are working.' The question now for workers is whether Project Willow jobs come through before they have to look elsewhere. Those hopes are looking increasingly forlorn, according to Cliff Bowen, who has worked at Grangemouth for 33 years, and is now a convener for Unite, a union. He argues that the political implications will be huge. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion 'All we asked for is another couple of years until these technologies come online,' Bowen said. 'It breaks my heart. Labour are done for a generation in this area.' Bowen, a lifelong Labour supporter whose anger is palpable, believes that Reform UK will benefit from the loss of jobs at Grangemouth, and throughout Scotland's oil and gas economy, because it appears to offer a chance for those businesses to continue to operate. 'They're talking sense when it comes to energy supply,' said Bowen. 'People are going to vote for that, regardless of the colour on their rosette.' Reform's support is notably strong in areas around other refineries: near Stanlow refinery it won the Runcorn Westminster byelection, while Reform is leading Westminster polls in each of the constituencies that host the UK's other refineries at Fawley in Hampshire, Pembroke in west Wales, and the plants at Humber and Lindsey in Lincolnshire. Richard Tice, the Reform deputy leader, said: 'Reform will scrap net zero which will enable lower energy costs and investment in the chemicals and refining industries, thus creating jobs and leading to the reopening of Grangemouth.' That prescription is not seen as realistic by industry experts, even if big subsidies were offered. It would also lead to continued UK carbon emissions: the refinery was responsible for more than a quarter of all Scotland's carbon. Yet the pledge may resonate with people struggling to find work. Labour managed a surprise victory in a Scottish parliamentary byelection earlier this month in Hamilton – leaving the Scottish National party (SNP) in second and Reform a close third. Yet Brian Leishman, who won Grangemouth back for Labour only last year in the Westminster general election, said the closure was a 'failure from the political class' – including Labour, after it failed to live up to a pre-election pledge by the Scottish Labour leader, Anas Sarwar, to 'step in to save the jobs at the refinery'. The SNP is keen to win back an area it held for nearly a decade at Westminster, but also has limited room for manoeuvre because of its nearly two decades leading the Scottish government. Leishman argued that the government should take ownership stakes in return for Project Willow funding, to prevent the area being vulnerable to the whims of distant bosses in the future. He said that Labour needed to invest in Scotland if it wanted to hold on to its previous gains. 'If you give people good jobs, good life chances, that's now you get a second term,' he said. 'If you do the basics of government well and you improve people's living standards, you'll beat Reform.' Scottish Enterprise, the lead agency on Project Willow, is hopeful that some of the interest will translate into action soon. Jane Martin, the managing director for innovation and investment, said she was 'aware of the need for short-term wins to turn the narrative around'. The agency is working to triage projects, and work out which will be most likely to succeed. They are a mix of 'inside the fence' at the refinery, and others outside. 'Project Willow is a really important lever but we are not only focused on those technologies,' Martin said. 'We're not shutting anything down at this stage.' It does appear increasingly unlikely that a single employer will emerge to replace the refinery's jobs. One much vaunted possibility was an investment to produce SAF to meet the UK's mandate of 10% of all aviation fuel by 2030. However, Michael Liebreich, a clean energy expert, said SAF was still seen as too risky for investors. SAF production (either from biological sources or using green hydrogen) is still several times more expensive than refining oil into kerosene, and nobody has dared to make the huge investment needed without a cast-iron guarantee that the product will be bought. There does not appear to be much hope for a neat solution. The question now appears to be whether smaller projects can let the town retain a chemical industry. That could allow it to salvage something from the devastation of the refinery's closure – and prove whether a messy transition can also be just. 'We've got a redundant petrochemical facility that has land, utilities and access to great people, if we can be courageous,' said Mark Simmers, the chief executive of Celtic Renewables. 'And it does require bravery and courage, particularly for governments to say, 'We're going to create these low-carbon manufacturing jobs, and repurpose all that land and utilities and people to do something which is all about the future'. 'That then becomes an example for the world. So I really believe if people are brave and courageous and say 'let's do this', it will provide a blueprint for lots refineries in the UK and the world.'
