Sasol Limited (Sasol) announced its updated strategy that commits it to be at net zero emissions by 2050. This is in line with Sasol's commitment to accelerate its transition to a low carbon world in support of the objectives of the Paris Agreement.

In aligning with its 2050 ambition, Sasol has stepped up its 2030 scope 1 and 2 greenhouse gas (GHG) emission reduction target, from an initial 10% for its South African operations, announced last year, to 30% for its Energy and Chemicals businesses, off a 2017 baseline. The company is also introducing a scope 3 reduction target, for its Energy Business, off a 2019 baseline.  This is consistent with what its peers have committed to.

"Based on detailed assessments and modelling, our 2030 target can be delivered without divestments and offsets, but through the direct decarbonisation of our existing assets," said Fleetwood Grobler, President and Chief Executive Officer of Sasol.

"This will be done through a mix of energy and process efficiencies, investments in renewables and a shift to incremental natural gas as a transition feedstock for our Southern African value chain. These solutions are well known and mostly under our control, and the investments required are cost-effective, preserving strong returns in our business, above the cost of capital."

Beyond 2030, Sasol has more than one viable pathway to get to its net zero ambition by 2050, with different options to transform its Southern Africa value chain by progressively shifting its feedstock away from coal, towards more transition gas, and then, green hydrogen and sustainable carbon over the longer term, as economics improve for these options.

"In an uncertain future, this approach offers agility and enables us to pivot as cost effective mitigation levers become available. We are also avoiding infrastructure lock-in and regret capital spend," said Grobler.

Sasol's proprietary Fischer-Tropsch (FT) technology, in particular, is well suited to play a meaningful role, in a low carbon future, with attractive new and emerging value pools.

"Against this backdrop, we are setting up a new business, Sasol ecoFT, with the intent to build on our technology leadership, to establish a significant market position internationally.  One of the first applications for the technology is likely to be sustainable aviation fuels (SAF), where new regulations are driving demand and existing technology and feedstocks, have limitations that FT can address."

Sasol's Energy business is positioned to lead the energy transition in Southern Africa through its advantaged asset base with a cash breakeven oil price below US$35 dollars per barrel. As one of the world's largest producers of grey hydrogen, Sasol aims to leverage this expertise to decarbonise through lower carbon feedstocks and increase production of cost-competitive sustainable fuels and energy.

Chemicals will pursue growth opportunities through its unique chemistry, specifically in FT and Ziegler-Alumina-Guerbet technologies. With its Lake Charles plants now fully operational, Sasol has clear pathways to generate attractive cash flows, as capacity ramps up. It will accelerate growth in more specialty solutions and sustainable chemicals, particularly Essential Care Chemicals and Advanced Materials, where Sasol already has leading market positions.

Sasol ecoFT, will focus on building new sustainable businesses by leveraging FT technology. Currently, FT uses fossil-fuel based sources of hydrogen and carbon. This technology has the potential to use green hydrogen and sustainable sources of carbon feedstock, such as biomass, carbon captured from carbon intensive processes and eventually direct air capture.

"Our FT technology, at the heart of our Southern Africa value chain, positions us well, to decarbonise through lower carbon feedstocks and to ramp-up the production of cost competitive sustainable fuels and chemicals," said Grobler.