T he Miner als C ouncil c ontinued t o pla y a leadership r ole in managing the deba t e on clima t e change and help guide deba t es on lo w ering the indus try s en vir onmental f ootprint in the ar eas of ener gy w a t er use and efcienc y en vir onmental r ehabilita tion and closur e emis sions monit oring and leading pr actic es on o v er all en vir onmental management and sus tainability In an a tt empt t o as sis t members t o c omply with Carbon T ax legisla tion the Miner als C ouncil de v eloped an e x c elbased spr eadsheet t empla t e methodology f or calcula tion of the tax T his t empla t e pr o vided guidanc e t o our members on ho w t o int erpr et and apply the carbon tax f ormula t o enable c onsis t ent unders tanding in c ompanies calcula ting their tax liabilities T his t empla t e w as also used t o unders tand the o v er all impact of carbon tax on the indus try during the frs t and sec ond phases of its implementa tion Giv en the unc ertainty as t o whether the allo w anc es pr oposed f or Phase 1 w ould s till be in plac e during Phase 2 the as ses sment t o undertak e the impact of the tax on the mining indus try w as based on tw o sc enarios T he lo w c os t sc enario as sumes tha t the r elief mechanisms allo w anc es r emain in plac e until the end of the frs t phase namely Dec ember 20 22 while the highc os t sc enario as sumes tha t the r elief mechanisms allo w anc es ar e phased out linearly T his as ses sment f ound tha t in 20 20 Phase 1 the pot ential t otal tax liability f or the mining indus try on Sc ope 1 emis sions taking int o ac c ount both the dir ect tax liability of R645 million and the indir ect tax liability of R13 5 million tha t w ould be pas sed on t o the mining indus try fr om suppliers primarily fr om pr oducts such as s t eel lime and c ement w ould be R7 80 million During Phase 2 Sc ope 2 emis sions fr om indir ect sour c es w ould apply in addition t o Sc ope 1 emis sions T he indus try s indir ect pas s thr ough tax liability w ould incr ease signifcantly and w ould be gr ea t er than its dir ect tax liability fr om 20 23 on w ar ds when pas sthr ough ef ects fr om electricity came int o pla y T his clearly demons tr a t es the signifcant pot ential of the pas sthr ough impact of electricity pric es particularly f or ener gy int ensiv e indus tries If the allo w anc es f or Phase 1 f ell a w a y during Phase 2 and as suming tha t mining output c onsumption of highemis sion inputs and emis sion int ensities r emain c ons tant the pot ential t otal carbon tax liability w ould incr ease t o R45 9 billion b y 20 23 and R1165 billion b y 20 30 incr easing the c os t of carbon tax t o the mining sect or b y 14 in jus t a decade R obus t engagements w er e held with Na tional T r easury t o c ommunica t e the fnancial impact of the tax on the mining indus try T he Miner als C ouncil w as ins trumental in ensuring tha t the mining indus try vie w s w er e w ell articula t ed and tak en int o c onsider a tion in the f ollo wing clima t e change polic y de v elopments amongs t others during 20 19 Carbon T ax A ct L o w Emis sions De v elopment S tr a t egy Dr aft Clima t e Change Bill Dr aft T echnical Guidelines f or monit oring r eporting and v erifca tion of GHG emis sions b y the indus try Mining indus try int ensity benchmarks T he De v elopment of the Gr eenhouse G as Int ensity Benchmarks within the gold and PGM subsect ors in the South A frican Mining Indus try tha t the Miner als C ouncil pr oposed t o Na tional T r easury on behalf of the mining indus try w er e adopt ed as the y ar e in the carbon tax r egula tions published in Dec ember 20 19 T hese benchmarks will help c ompanies in the gold and PGM sect ors t o beneft fr om a 5 allo w anc e under the Carbon T ax A ct T he Miner als C ouncil will be embarking on the de v elopment of other int ensity benchmarks f or other c ommodities REDUCING THE MINING INDUS TR YS ENVIRONMENT AL FOO TPRINT S tr a t egic Goal 4 T he En vir onment discipline c ontribut ed t o the Miner als C ouncil submis sion on the Int egr a t ed Resour c e Plan dr aft polic y particularly t o ensur e alignment o f the c ountry s ener gy polic y with clima t e change disc ourse and carbon tax polic y c onsider a tions INTEGRA TED RESOURCE PLAN 20 18 P age 99 MINERALS C OUNCIL SOUTH AFRICA INTEGRA TED ANNU AL REVIEW 20 19