Issuu

Specialist Climate Change Assessment Report For the proposed

Musina-Makhado Special Economic Zone South Site

Musina-Makhado Special Economic Zone (SOC) Limited Limpopo Economic Development Agency

September 2021

Executive Summary This report sets out a climate change impact assessment for the planned Musina-Makhado Special Economic Zone (SEZ). The analysis is based on the judgement in the Thabametsi court case where the court found that environmental impact assessments should consider both the potential impact of a proposed project on climate change, as well as the potential impact of climate change on the proposed project. The analysis presented in this report considered the climate change impacts of the project in the context of both South Africa’s domestic legal environment as well as the international commitments the country has made. The report builds on a 2°C target and will fall short in its recommendations if a 1.5°C target is set, as is envisaged in the Paris Agreement. In conclusion, this project presents a unique challenge. When considered from a South African National perspective, the impacts of the project are: • The project has a High (negative) impact rating for the operational phase of the project, in terms of the 2014 NEMA EIA Regulations, with a significance score of 100. • The emissions released by the various activities associated with the SEZ over the operational lifetime of the project will consume as much as 10% of South Africa’s carbon budget. The impact on the emission inventory of the country is therefore VERY HIGH (negative). • When considering the impact score for the construction phase, the impact score will be High. This is independent of the magnitude of the GHG emissions. However, these emissions pale in comparison to the operational emissions that will result from the proposed SEZ and various activities planned within. • Although the impact of the activities associated with operational phase of the SEZ is considered to be HIGH with a magnitude impact (in terms of the specialist climate change assessment methodology) of VERY HIGH in terms of the country’s emission inventory, such impact has been considered within the context of the provisions of the Thabametsi case, as well as the relevant regulatory requirements relating to South Africa’s energy sector, climate change commitments and social context. o The contextual consideration of the project aligns with the requirements of Section 240(1) of NEMA which provides that the Minister must comply with the Act, and must “take into account all relevant factors.” At the time of drafting the report, the IRP 2010-2030 was the binding policy determining South Africa’s electricity mix. o However, since the adoption of the IRP 2010, South Africa has made numerous climate change commitments in its NDC, and as such, the IRP 2010 is premised on facts that are outdated when considering more recent policy developments and commitments. • Therefore, environmental authorisation of the thermal coal fired power plant cannot be granted merely based on the fact that the IRP 2010 allows for energy to be procured from coal. Additional factors such as the project’s overall impact in relation to other factors such as South Africa’s NDC and South Africa’s Peak Plateau Decline (PPD) emission trajectory must be considered. 2

Based on the above, and considering the relevant regulatory factors which includes, but is not limited to South Africa’s Nationally Determined Contribution (NDC), the Peak Plateau Decline (PPD) emission trajectory as well as the outdated nature of the Integrated Resource Plan 2010, the various activities planned as part of the SEZ should not be implemented, unless the following can be met: • If the individual processes within the SEZ are built according to the SBTi intensities identified in the report (see Table 14), then emissions of the project could be reduced by approximately 10 million tonnes per year, to a total emissions of 24 million tonnes per year. In the light of the above, the recommendations in the report are: • Environmental authorisations for the individual plants in the SEZ should only be granted if the following emission intensities can be achieved: Plant Coke Plant Ferrochrome plant Ferromanganese plant Silicon-manganese plant Carbon steel plant Stainless steel plant Lime plant Cement plant Sewage treatment plant Water treatment plant

• •

•

2°C target intensities for 2030 0.21 tCO2e/tonne product 3.37 tCO2e/tonne product 3.37 tCO2e/tonne product 5.18 tCO2e/tonne product 0.37 tCO2e/tonne product 0.78 tCO2e/tonne product 0.87 tCO2e/tonne product 0.80 tCO2e/tonne clinker 0.0005 tCO2e/tonne water

0.0005 tCO2e/tonne water

In addition, the environmental authorisation should require a re-assessment of the emission intensities 5 years after the start of operation of the respective plants The construction of a coal fired thermal power plant should not be approved unless the plant is fitted with a carbon capture and storage unit that can sequester ALL emission from the combustion of coal from the starting date of operation. Without CCS, the coal fired power station will severely reduce South Africa’s ability to achieve its NDC. We make this recommendation in the context of the comment regarding the lack of feasibility of CCS as described in Section 4.1.3). In practical terms this means that approval for the coal fired thermal power plant should, in our opinion, not be granted. The Specialist studies (groundwater, surface water, etc.) for the environment authorisation for each plant in the overall SEZ should specifically address the impact of climate change on each area. For example, the ground water study should address the impact of climate change on the recharge of groundwater, etc. This is also important for all studies related to the social impacts of the projects. Water is of critical concern. The study area is already severely water stressed and climatic modelling for the area indicates increased ambient temperatures, prolonged periods of drought and greater rainfall variability. These factors will exacerbate current water risks, both in South Africa and in neighbouring Zimbabwe. The impacts of climate change, as 3

•

well as the potential changes in climatic parameters have, a broader impact on water sources than the immediate zone of influence. Current water stress in the region is anticipated to be exacerbated by climate change impacts. The area is anticipated to become increasingly hotter and drier, thus the water availability in the area may critically constrained resulting in water shortages affecting the region in its entirety. Thus, any approval of the project should be conditional upon an overall water risk analysis of the region (Limpopo Province) being conducted, with specific reference to the proposed SEZ project. This is to identify the broader water stress and possible pollution risks posed by the proposed SEZ, which will be exacerbated by the impacts of climate change in the Province. It is advised that a regional perspective be developed with regards to water resources in the Province, current land use change patterns, existing water uses and climate change. This will allow for more informed decision-making related to the development of the proposed SEZ. The provision of water will rely on an international supply of water from Zimbabwe. Any approval of the project should be conditional upon a thorough assessment of how the diversion of this water will impact the climate change-related adaptive capacity of the affected communities in Zimbabwe. All indoor working environments should be well insulated and air conditioned and drinking water should be made readily available throughout the MMSEZ. This is to reduce the potential impacts of heat-related health impacts, such as dehydration, on the health of employees. The frequency and intensity of heat-related health impacts is predicted to increase as climate change progresses.

The potential impacts of climate change in this area, within the context of this project, such as increasing temperatures, prolonged periods of drought, flash foods from severe rainfall events, biodiversity and agricultural loss and significant water related constraints, could have significant impacts on the project itself as well as entrench the vulnerability of people in the area. This will increase poverty and prevent communities from building climate resilience, specifically in the long-term. This assessment was undertaken by Promethium Carbon under bid number LEDA/AIA/2018/19-2. The Scope of Work as proposed by the Service Level Agreement has been addressed as follows: Requirements as per Scope of Work Relevant Chapters of this report depicted in Service Level Agreement Review of legislation, policy Chapter 3 sets out the various relevant climate change schemes and frameworks related documents and strategies pertaining to climate applicable to the proposed change in terms of global, national, provincial and development local level. Baseline description of Chapter 3 provides an overview of the national, climate change landscape provincial and local context of climate change. Climate Resilience Chapter 6 discusses the impacts of climate change on Assessment the projects which is assessed in terms of exposure,

Requirements as per Scope of Work Relevant Chapters of this report depicted in Service Level Agreement sensitivity and adaptive capacity to inform the proposed SEZ’s vulnerability risk rating. Climate baseline Chapter 3 discusses the nature of climate change, which includes reference to the pre-industrial era Climate change projections Chapter 3 discusses observed climate change trends and projections on a national. Provincial and local level. Impact Assessment: Chapter 5 provides the emission intensities of the Assessment of direct, proposed SEZ and a discussion on the related impact indirect, cumulative GHG on climate change. As the designs for the various emission impacts during the: activities and related plants envisaged for the SEZ in terms of their respective construction and • Construction phase decommissioning planning, have not yet been • Operational phase finalised, the emissions for each of these plants in • Decommissioning terms of these phases cannot yet be calculated. and rehabilitation Therefore, this assessment has determined emission phase intensities for the various operational activities envisioned within the SEZ (based on available information), required to achieve national and international climate change objectives. Emissions management Both Chapter 5 and Chapter 8 discusses emission measures mitigation measures. Proposed development’s Chapter 5 details the project’s direct impact on direct impacts on climate climate change. change Extent of GHG emissions to Chapter 5 details the emission intensities, assumed arise from the development for the SEZ. How climate change will impact on the project How predicted climate change effects on the environment at both national and local scale will be aggravated by the project’s impacts How impacts can be avoided, mitigated or remedied Assessment of social and environmental costs of the proposed development’s GHG emissions

Chapter 6 discusses the impacts of climate change on the project. Chapter 6 discusses the impacts of climate change on the project and the related exacerbation of project impacts as a result of climate change.

Both Chapter 5 and Chapter 8 discusses emission mitigation measures. Chapter 6 discusses the impacts of climate change on the project and the related exacerbation of project impacts as a result of climate change. These impacts are contextualised within the social and natural environment of the study area. Chapter 5 also provides a detailed assessment of the impact of the project in relation to South Africa’s carbon budget.

Table of Contents Executive Summary .................................................................................................................................... 2 Table of Contents ....................................................................................................................................... 6 List of Figures.............................................................................................................................................. 9 List of Tables ............................................................................................................................................. 11 Declaration of Independence .................................................................................................................. 12 Details of Specialist................................................................................................................................... 13 List of Acronyms and Terms .................................................................................................................. 16 Key Terms and Definitions ..................................................................................................................... 17 Introduction ...................................................................................................................................... 18 1.1

Structure of the Report............................................................................................................ 21

Project Description .......................................................................................................................... 23 2.1

Regional Project Context ........................................................................................................ 23

2.2

Project Overview ...................................................................................................................... 24

2.2.1

Industry capacity and construction phasing ................................................................. 25

2.2.2

SEZ water demand .......................................................................................................... 26

2.2.3

Labour demand ................................................................................................................ 28

2.3

Project Setting ........................................................................................................................... 28

2.3.1

Location............................................................................................................................. 28

2.3.2

Land capability.................................................................................................................. 28

2.3.3

Water.................................................................................................................................. 29

2.3.4

Biodiversity ....................................................................................................................... 30

2.3.5

Settlements and surrounding communities .................................................................. 31

Climate Change Context.................................................................................................................. 33 3.1

Global Context ......................................................................................................................... 33

3.2

Local Context............................................................................................................................ 34 South Africa’s response to climate change................................................................... 34

3.2.2

South Africa’s carbon budget ......................................................................................... 35

3.2.3

Local climate change impacts ......................................................................................... 36 Pathways for a just transition for the Province of Limpopo ..................................... 36

3.3

Observed Trends and Projected Climate Change ............................................................... 37 National overview ............................................................................................................ 37 6

Provincial overview ......................................................................................................... 39 Municipal overview.......................................................................................................... 42 3.4

Other Potential Climate Change Dimensions Relevant to the SEZ................................. 44

Methodology ..................................................................................................................................... 45 4.1

Impacts of the Project on Climate Change .......................................................................... 45 Greenhouse gas emissions estimation methodology .................................................. 45 Environmental impacts of greenhouse gas emissions ................................................ 49

4.1.3 4.2

Carbon Capture and Storage .......................................................................................... 51

Impacts of Climate Change on the Project .......................................................................... 51

Impact of Project on Climate Change ........................................................................................... 55 5.1

Quantification of the Project’s Greenhouse Gas Emissions ............................................. 55

5.2

Impacts on Greenhouse Gas Inventories ............................................................................. 58

5.2.1

South African Context .................................................................................................... 58 Global Context ................................................................................................................. 60

5.3

Impacts on Climate Change.................................................................................................... 62

5.4

Project Alternatives .................................................................................................................. 64

Impacts of Climate Change on the Project................................................................................... 66 6.1

Emission scenarios and impact analysis ................................................................................ 67

6.2

Increased Temperature ............................................................................................................ 69

6.3

Water related impacts .............................................................................................................. 71 Water internationally ....................................................................................................... 71 Water locally ..................................................................................................................... 73 Physical risks within the value chain ............................................................................. 79 Disaster risks – flash flooding ........................................................................................ 80

6.4

Social Impacts ........................................................................................................................... 82 Description of local municipality socio-economic vulnerabilities ............................ 83 SEZ community vulnerability drivers ........................................................................... 86 Human Health .................................................................................................................. 88 Human settlements .......................................................................................................... 89 Water and sanitation ........................................................................................................ 90 In-migration risks ............................................................................................................. 90

6.5

The Natural Environment ...................................................................................................... 92

6.5.1

Land use cover change .................................................................................................... 93

Biomes and ecosystem services ..................................................................................... 93 6.5.3

Considering the biodiversity in relation to climate adaptation .................................. 95 Drought ............................................................................................................................. 96

6.6

Transitional Risks ..................................................................................................................... 96

6.7

Summary of climate change resilience assessment .............................................................. 98

Climate Change and the Possibility of Stranded Assets............................................................ 102 Mitigation and Adaptation ............................................................................................................ 105 8.1

Design considerations............................................................................................................ 105

8.2

Operational Emissions Management .................................................................................. 106

Opinion on the Project .................................................................................................................. 107

List of Figures Figure 1: Musina-Makhado Special Economic Zone Proposed Location4. .................................................... 24 Figure 2: EMSEZ Site water balance7. ................................................................................................................... 27 Figure 3: SEZ total labour figures7. ........................................................................................................................ 28 Figure 4: Land cover 4. .............................................................................................................................................. 29 Figure 5: Vhembe Biosphere Reserve4 . ................................................................................................................. 31 Figure 6: Percentage of households in informal dwellings in the Vhembe District Municipality12 .............. 32 Figure 7: Projected Southern African temperature change under RCP4.526. ................................................... 38 Figure 8: Projected precipitation change for South Africa under different emissions scenarios26 ............... 39 Figure 9: Limpopo drought tendencies for the period 1995-2024. ................................................................... 40 Figure 10: Flood Hazard index27. ............................................................................................................................ 42 Figure 11: Proposed Methodology boundary and input...................................................................................... 46 Figure 12: Vulnerability assessment process.......................................................................................................... 53 Figure 13: Emissions per project type for the 30 year life of the project ......................................................... 57 Figure 14: Effect of the project on the IRP .......................................................................................................... 60 Figure 15: The growing role of steel for a low carbon future (2DS - 2˚C scenario. 4DS - 4˚C scenario, 6DS - 6˚C scenario). .................................................................................................................................................. 61 Figure 16: Climate risks impacting various sectors (adopted) ............................................................................ 66 Figure 17: Forward looking scenario analyses ....................................................................................................... 68 Figure 18: Projected average temperate change for the period 2021 -2050, relative to the baseline period (1961 – 1990)27. .......................................................................................................................................................... 69 Figure 19: Projected change in the number of very hot days (>35˚C) for the period 2021 -2050, relative to the baseline period (1961 – 1990)27. ........................................................................................................................ 70 Figure 20: Projected change in drought tendencies for the period 2035 - 2064, relative to the baseline period (1986 – 2005) under the low mitigation scenario RCP 8,527. ................................................................. 74 Figure 21: Projected change in average rainfall for the period 2021 -2050, relative to the baseline period (1961 – 1990)27. .......................................................................................................................................................... 75 Figure 22: Projected change in extreme rainfall days under RCP 8.5 for the year 205027.............................. 76 Figure 23: SEZ - overall water stress52. .................................................................................................................. 77 Figure 24: SEZ - upstream storage52....................................................................................................................... 78 Figure 25: SEZ - inter annual variability52.............................................................................................................. 79 Figure 26: Overall water stress in Mpumalanga region52. .................................................................................... 80 Figure 27: Disaster incidences from 2016 - 2018. ................................................................................................ 81 Figure 28: Percentage of households in informal dwellings in the Vhembe District Municipality12. .......... 83

Figure 29: Population living in poverty. ................................................................................................................. 85 Figure 30: Vhembe district Municipality Percentage of Young (<5yrs) and elderly (>64yrs)12. ................... 89 Figure 31: Summary of the climate-related events per country in southern Africa since 1980..................... 91 Figure 32: Bioclimatic envelope projections to 205022. ....................................................................................... 94 Figure 33: Comparison of the global 2°C carbon budget with fossil fuel reserves CO2 emissions potential. ..................................................................................................................................................................................... 103 Figure 34: Shortfall in country level contributions to meet the 2⁰C target. ................................................... 104 Figure 35: Global levelized cost of electricity from utility-scale renewable power generation technologies, 2010-2017. ................................................................................................................................................................. 105

List of Tables Table 1: Summary of Proposed Projects for SEZ ................................................................................................ 21 Table 2: Summary of Proposed Projects for SEZ ................................................................................................ 25 Table 3: Construction phase timeframes7 .............................................................................................................. 26 Table 4: Current and future water balance of Musina area with interventions. ............................................... 30 Table 5: Vhembe District Municipality key climate change vulnerability indicators12.................................... 43 Table 6: Emission intensity benchmarks used ...................................................................................................... 48 Table 7: Emission intensities required to achieve the Paris Agreement 2°C goal .......................................... 49 Table 8: Environmental impact assessment criteria ............................................................................................ 49 Table 9: Greenhouse gas emissions impact rating ................................................................................................ 50 Table 10: Musina Makhado SEZ Climate Change Risk and Vulnerability Analysis Components ............... 54 Table 11: Emissions provided in the Greenhouse Gas Emission Indicator Report ..................................... 55 Table 12: Annual project emissions ....................................................................................................................... 56 Table 13: The Musina-Makhado SEZ development's emissions relative to South Africa's carbon budget 58 Table 14: Comparison of current and required emission intensities. ................................................................ 61 Table 15: Climate change impacts of the Musina-Makhado SEZ Development emissions during operations .................................................................................................................................................................... 62 Table 16: Emission intensity comparison .............................................................................................................. 64 Table 17: Potential source of water in Zimbabwe10 ............................................................................................. 71 Table 18: Limpopo development level catchment water balances, 2010.......................................................... 73 Table 19: Vhembe District Municipality key demographic information (2011)12. .......................................... 84 Table 20: Climate change manifestation, community impacts and operational influence ............................. 87 Table 21: Potential impact analysis for the SEZ under RCP8.5......................................................................... 98

Declaration of Independence The authors of this report do hereby declare their independence as consultants appointed by Deltabec Consulting to undertake a climate change assessment for the proposed SEZ. Other than fair remuneration for the work performed, the specialists have no personal, financial business or other interests in the project activity. The objectivity of the specialists is not compromised by any circumstances and the views expressed within the report are their own.

Robbie Louw

Karien Erasmus

Matthias Rommelspacher

Kenneth Slabbert

Details of Specialist Promethium Carbon Promethium Carbon is a South African climate change and carbon advisory company based in Johannesburg. Our aim is to make a difference in climate change in Africa and our team of climate change professionals and technical experts assists businesses, ranging from small enterprises to multinational entities, on their journey towards a low carbon economy. We also assist governments and government institutions in planning for the imminent global carbon-constrained environment. We act as trusted advisors to our clients and have established ourselves as knowledge leaders in the climate space through our participation on various working groups and standards boards. We have been active in the climate change and carbon management space since 2004. Our client base includes many of the international mining houses and industrial companies that are operating in, and from, South Africa. Promethium Carbon’s climate change impact studies typically include an estimation of the carbon footprint of the activity or group of activities, as well as the vulnerability of the activity/ies to climate change. Promethium Carbon has calculated greenhouse gas inventories for over 60 entities and is proficient in applying the requirements of ISO/SANS 14064-1 and the Greenhouse Gas Protocol’s accounting standards, as well as South Africa’s greenhouse gas reporting guidelines. Promethium Carbon has also assisted around 40 clients develop climate change risk assessments, which includes the compilation of climate change specialist reports. Promethium Carbon’s assessments include thorough analysis of historical and projected weather data specific to the region in which the client operates. Promethium Carbon’s assessment of vulnerability goes beyond core operations to include impacts within the supply chain and broader network of the client. We have also conducted climate change risk and vulnerability assessments as part of the Carbon Disclosure Project for over 20 clients, many whom have reported annual since 2008.

Robbie Louw

is the founder and director of Promethium Carbon. He has over 15 years of experience in the climate change industry. His experience (35 years) includes research and development activities as well as project, operational and management responsibilities in the chemical, mining, minerals process and energy fields. Robbie is currently a member of The Southern African Institute of Mining and Metallurgy, Robbie’s experience in climate change includes (but is not limited) to: •

Climate change risk and vulnerability assessments for large mining houses.

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Extensive experience in carbon foot printing. The team under his leadership has performed carbon footprint calculations for major international corporations operating complex businesses in multiple jurisdictions and continents.

•

Carbon and climate strategy development for major international corporations.

•

Climate change risk assessments for various companies and projects.

•

Climate change scenario planning and analysis, particularly in terms of the recommendations of the Taskforce on Climate-related Financial Disclosure. 13

Karien Erasmus is a principal climate change advisor at Promethium Carbon and holds an Honours Degree in Sustainable Development. Her postgraduate qualifications include diplomas in: Project management, community development and mine closure and ecological rehabilitation. She has been involved in the sustainability and climate change industry for the past 13 years, working extensively in Africa and on strategic local projects such as the Gautrain and the Bus Rapid Transit system in Johannesburg. Karien joined Promethium Carbon in 2015 and utilises her developmental background to inform the social context of various climate change and low carbon development projects. Karien holds memberships with the Land Rehabilitation Society of Southern Africa and International Association for Impact Assessment. Over the past three years Karien has worked extensively within the mining sector. Karien’s experience in climate change includes: •

Climate change risk and vulnerability assessments;

•

Climate change impact assessments as part of the Environmental Authorisation process;

•

Drafting Carbon Disclosure Project Climate Change and Water responses;

•

Assessment of climate change and energy related regulations;

•

Developing the land, community and energy nexus concept which links land rehabilitation to community upliftment through sustainable energy projects.

Matthias Rommelspacher is a Climate Change Advisor appointed at Promethium Carbon who

holds a Master’s in Environmental Engineering. His postgraduate studies focused on urban water management, air quality control, waste management and ecological systems design. Part of his studies included field work on Mahé in Seychelles, where he was part of a transdisciplinary team that assessed the waste management system of Mahé Island. The research for his thesis combined his background as a Chemical Engineer with his studies and focused on the processing of urban wastewater for nutrient recovery. Over the past several months at Promethium Carbon, Matthias has gained valuable experience. Some of the projects he has been active in include: •

Climate change impact assessments for major energy and gas installations;

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GHG Reporting;

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Climate change risk and vulnerability assessments; and

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Calculations of various first principle concepts for modelling purposes, including: o Carbon tax models, o Carbon footprints, and o Science-Based Target models.

Kenneth Slabbert is a climate change advisor at Promethium Carbon and holds a Bachelor of Engineering in Mechanical Engineering. Kenneth joined Promethium Carbon in 2018 and has been working in the climate change industry for the past 1.5 years. Kenneth’s experience in climate change includes: •

Carbon footprint / Greenhouse gas inventory development

•

Energy efficiency studies 14

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Data analysis

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Climate Change Impact Assessments

List of Acronyms and Terms Abbreviation

Definition

SEZ

Special Economic Zone

CO2

Carbon dioxide

CH4

Methane

IPCC

Intergovernmental Panel on Climate Change

IRP

Integrated Resource Plan

LTAS

Long Term Adaptation Scenarios

NPC

National Planning Commission

EIA

Environmental Impact Assessment

SDA

Sectoral Decarbonization Approach

RCP

Representative Concentration Pathway

Million tonnes

MtCO2e

Million tonnes of carbon dioxide equivalent

N2O

Nitrous Oxide

NDC

Nationally Determined Contribution

tCO2e

Tonnes of carbon dioxide equivalent

WRI

World Resources Institute

Key Terms and Definitions1 Climate Change

Climate Variability

Greenhouse Gas (GHG)

Climate Change Impacts

Vulnerability Resilience

Mitigation

Adaptation

Adaptive capacity

Climate change refers to a change in the state of the climate that can be identified (e.g., by using statistical tests) by changes in the mean and/or the variability of its properties and that persists for an extended period, typically decades or longer. Climate change may be due to natural internal processes or external forces such as modulations of the solar cycles, volcanic eruptions and persistent anthropogenic changes in the composition of the atmosphere or in land use. Climate variability refers to variations in the mean state and other statistics (such as standard deviations, the occurrence of extremes, etc.) of the climate on all spatial and temporal scales beyond that of individual weather events. Variability may be due to natural internal processes within the climate system (internal variability), or to variations in natural or anthropogenic external forcing (external variability). Greenhouse gases are those gaseous constituents of the atmosphere, both natural and anthropogenic, that absorb and emit radiation at specific wavelengths within the spectrum of terrestrial radiation emitted by the Earth’s surface, the atmosphere itself and by clouds. This property causes the greenhouse effect. Water vapour (H2O), carbon dioxide (CO2), nitrous oxide (N2O), methane (CH4) and ozone (O3) are the primary GHGs in the Earth’s atmosphere. The consequences of realized risks on natural and human systems, where risks result from the interactions of climate-related hazards (including extreme weather and climate events), exposure, and vulnerability. Impacts generally refer to effects on lives; livelihoods; health and well-being; ecosystems and species; economic, social and cultural assets; services (including ecosystem services); and infrastructure. Impacts may be referred to as consequences or outcomes and can be adverse or beneficial. The propensity or predisposition to be adversely affected. Vulnerability encompasses a variety of concepts and elements including sensitivity or susceptibility to harm and lack of capacity to cope and adapt. The capacity of social, economic and environmental systems to cope with a hazardous event or trend or disturbance, responding or reorganizing in ways that maintain their essential function, identity and structure while also maintaining the capacity for adaptation, learning and transformation. Mitigation (of climate change), a human intervention to reduce emissions or enhance the sinks of greenhouse gases. Behaviour change efforts can be planned in ways that mitigate climate change and/or reduce negative consequences of climate change impacts. In human systems, the process of adjustment to actual or expected climate and its effects, in order to moderate harm or exploit beneficial opportunities. In natural systems, the process of adjustment to actual climate and its effects; human intervention may facilitate adjustment to expected climate and its effects. The ability of systems, institutions, humans and other organisms to adjust to potential damage, to take advantage of opportunities, or to respond to consequences.

IPCC, 2014. Fifth Assessment Report of the IPCC, Annex 1: Glossary s.l.: s.n. Viewed 29 July 2019 https://www.ipcc.ch/site/assets/uploads/sites/2/2019/06/SR15_AnnexI_Glossary.pdf

Introduction Promethium Carbon has been appointed to undertake a Climate Change Impact Assessment as part of the Environmental Impact Assessment process for the Musina-Makhado Energy and Metallurgy Special Economic Zone (EMSEZ, SEZ). The proposed SEZ is located across the Musina and Makhado local municipalities which fall under the Vhembe District Municipality. The Musina- Makhado SEZ objective to create a new heavy industrial hub that forms part of the TransLimpopo Spatial Development Initiative. In accordance with the relevant regulations, an environmental impact assessment process must be completed before project development can proceed. We understand that, in the case of the Musina Makhado SEZ, the current environmental authorisation pertains to the establishment of the SEZ. All activities to be undertaken within the SEZ will be subject to further, individual environmental impact authorisations. Climate change poses major risks to South Africa. The country is located in one of the three regions of the African continent that will most likely suffer significant adverse impacts with predicted warmer and drier summers, wetter and milder winters and more frequent extreme weather events2. The Limpopo province is already experiencing some of these impacts with future predictions indicating increased temperatures and more frequent extreme weather events such as periods of prolonged drought and heat waves 3 . The Province’s water resources, are, and will continue to be significantly impacted by climate change. In addition, there is great social vulnerability within the area as a result of high poverty levels, low levels of education and service delivery backlogs. Climate change impacts could further exacerbate these challenges. The global nature of climate change impact is such that the greenhouse gas emissions from any individual project or source cannot be connected directly to any specific environmental impacts as a consequence of climate change. The analysis presented in this report is presented in the context that, even though the individual GHG emission contribution of a project cannot be directly linked to specific localised climate change impacts, global climate change is significant and can be quantified as such. In other words, the specific greenhouse gas emissions from the SEZ and its eventual tenants cannot be attributed directly to particular climate change effects. Despite this there is a collective responsibility to address the global challenge of climate change and each actor, such as the proposed SEZ, has an individual responsibility to minimise its own negative contribution to climate change.

2 3

Alex Kirby, “Three African Regions at High Risk from Climate Change,” ClimateCentral, 12 June 2019. http://www.climatecentral.org/news/climate-hotspots-imperil-parts-of-africa-17417 Limpopo Provincial Government, Limpopo Provincial Climate Change Response Strategy 2016-2020. 12 June 2019. http://www.ledet.gov.za/wp-content/uploads/2016/11/Limpopo_Climate_Change-Response_Strategy_2016_2020_Final.pdf

This report covers the climate change impact assessment for the SEZ. Namely, the impact of the SEZ on climate change and the vulnerability of SEZ in terms of climate change. As such an assessment cannot be done without providing context to the potential emissions. As the exact build programme for the SEZ has not been finalised, this report is based on the assumption that the following will form part of the SEZ: • Coal washery • Coke plant • Heat recovery power generation • Thermal power plant • Ferrochrome plant • Ferromanganese plant • Silicon manganese • Vanadium-titanium magnetite • High manganese steel • High vanadium steel plant • Stainless steel Plant • Lime plant • Cement plant • Refractories factory • Sewage treatment plant • Industrial domestic water plant • Light industrial processing zone • Machinery zone • Commercial residential area • Living area • SEZ administration centre • Bonded area

As the detail designs and related process flows of the envisaged SEZ operations are not yet completed, the emissions associated with these activities cannot be calculated. This assessment considers industry benchmarks and best practice emission intensities required to achieve certain national and international climate change objectives. Ultimately these emissions intensities should form the basis of the environmental approvals for the various operations envisaged in the SEZ. This report also presents emission intensities calculated from data received from the project team and puts it in context with the mentioned intensities. The analysis presented in this report is aligned with the principles of the National Environmental Management Act, 1998 (Act No 107 of 1998), as amended, as it seeks to provide the best possible information to evaluate the project’s environmental sustainability from a climate change perspective. From the outset, the authors of this report want to emphasise the fact that climate change is a global phenomenon, and that South Africa’s domestically focussed environmental laws and regulations have not been yet been amended to take account of international phenomena such as climate change. In this regard the authors of this report, as climate change specialists, have developed, over a period of four years, an appropriate methodology to deal with climate change within the context of domestic environmental legislation. This is defined in detail in Section 4 of this report. However, it is critical to note that given South Africa’s developmental needs and the impacts of climate change on South Africa’s ability to build resilience, a balance must be struck between the immediate social needs of the country, and future environmental impacts. Future environmental impacts, related to issues such as constrained water capacity and biodiversity loss, could have significant socio-economic impacts in terms of increased social climate change vulnerability. It is within the aforementioned context that the SEZ operations have been analysed. The broad terms of reference and scope of work for this specialist climate change assessment include the following: 1. Developing a benchmark greenhouse gas inventory for the SEZ. Due to the fact that detailed information with regards to the operations of each of the activities envisioned for the SEZ is not available, this assessment compiled a benchmark greenhouse gas inventory based on industry benchmarks and current best practice emission intensities. It compares this with high level data provided by the project team. 2. Reviewing the greenhouse gas emissions mitigation options for the project. 3. Conducting an impact assessment of the project: a) Considering its contribution to the South African national emissions inventory, the global greenhouse gas inventory, and the potential impacts of the project on the onset of global anthropogenic climate change; b) Comparing the emissions associated with the value chain of the project against the current South African baseline with consideration of impacts on the future baseline; and

c) Exploring the potential impacts of global climate change on the risks faced by the project and the project’s broader network. 4. Assessing requirements for greenhouse gas emission management activities for the SEZ’s operations.

1.1 Structure of the Report The following table provides an overview of the NEMA Regulations (2014), Appendix 6 requirements for specialist studies with information on how these requirements have been met in this Climate Change Impact Assessment.

Table 1: Summary of Proposed Projects for SEZ Requirement from Appendix 6 of GN 326 of 7 April 2017 (a) Details of(i) the specialist who prepared the report; and (ii) the expertise of that specialist to compile a specialist report including a curriculum vitae

Chapter Page 12

(b) Declaration that the specialist is independent in a form Page 11 as may be specified by the competent authority (c) Indication of the scope of, and the purpose for which, Chapter 1, Chapter 2 and the report was prepared Chapter 3 (cA) An indication of the quality and age of base data used Chapter 4 for the specialist report (cB) A description of existing impacts on the site, Chapter 3 and 5 cumulative impacts of the proposed development and levels of acceptable change. (d) the Duration, date and season of the site investigation Not applicable and the relevance of the season to the outcome of the change study assessment

climate

(e) Description of the methodology adopted in preparing Chapter 4 the report or carrying out the specialised process inclusive of equipment and modelling used. (f) details of an assessment of the specific identified Not applicable sensitivity of the site related to the proposed activity or change study activities and its associated structures and infrastructure inclusive of a site plan identifying site alternatives

(g) Identification of any areas to be avoided, including Not applicable to climate buffers change study (h) Map superimposing the activity including the Not applicable associated structures and infrastructure on the change study environmental sensitivities of the site including areas to be avoided, including buffers

climate

(I) Description of any assumptions made and any Chapter 4 and Chapter 5 uncertainties or gaps in knowledge (j) Description of the findings and potential implications of such Chapter 5 and Chapter 6 findings on the impact ofthe proposed activity, or activities (k) Mitigation measures for inclusion in the EMPr

Chapter 8

(I) Conditions for inclusion in the environmental Chapter 8 authorisation (m) Monitoring requirements for inclusion in the EMPr or Chapter 8 environmental authorisation (n) Reasoned opinionChapter 9 (i) whether the proposed activity, activities or portions thereof should be authorised; (iA) regarding the acceptability of the proposed activity or activities; and (ii)if the opinion is that the proposed activity, activities or portions thereof should be authorised, any avoidance, management and mitigation measures that should be included in the EMPr, and where applicable, the closure plan (o) Description of any consultation process that was undertaken during the course of preparing the specialist report (p) A summary and copies of any comments received during any consultation process and where applicable all responses thereto (q) Any other information requested by the competent authority

Project Description The following sections provide a context, overview and setting of the proposed Musina-Makhado Energy and Metallurgy SEZ based on information contained in Scoping Report 4 related to the project.

2.1 Regional Project Context The Musina-Makhado SEZ is developed in the following regional context:

4 5

•

The Southern African Development Community (SADC) is a Regional Economic Community comprising 16 member states within Southern Africa and promotes sustainable and equitable economic development. The main objectives of SADC are to achieve economic growth, peace and security for the region. South Africa, as a member state aims to promote sustainable development through eradicating poverty by creating employment and sustainable economic growth.

•

The Special Economic Zone (SEZ) Programme has been established by the South African Government as a mechanism to enhance economic development by transforming the local economy into a globally competitive industrial economy. The SEZ programmes are intended to contribute towards strengthening South Africa’s terms of trade through the export of value added commodities, the creation of stronger value chains and provision of much needed jobs in previously disadvantaged regions.

•

The Limpopo Development Plan5 as well as the National Development Plan6 emphasize the need for economic growth which is dependent on provincial resources to help develop competitive industrial areas. It is therefore aimed at the need to utilize the use of locally available resources through various industries for the benefit of the province and the country. The proposed Musina-Makhado SEZ is the single largest proposed SEZ development in the country. It is envisaged that Musina-Makhado SEZ will contribute to the transformation of the governmental agenda in the province in terms of providing regional integration with SADC countries and improving local economic growth.

•

The proposed location for the Musina-Makhado SEZ is central to various coal resources located as well as other minerals such as iron, nickel, manganese, silica and lime stone, all located within a 200km radius. These minerals could provide the inputs to the proposed

Delta BEC, 2019. Musina-Makhado Sepeical Economic Zone Development Scopring Report, Limpopo Province, Revision 01. Limpopo Provincial Government Republic of South Africa: Limpopo Development Plan 2015-2019. Viewed 12 June 2019 http://policyresearch.limpopo.gov.za/bitstream/handle/123456789/1335/LDP%20Draft%20Ver.2.4%20Dec.2 014.pdf?sequence=1 Republic of South Africa: National Development Plan 2030. Viewed 12 June 2019. https://www.gov.za/sites/default/files/Executive%20Summary-NDP%202030%20-%20Our%20future%20%20make%20it%20work.pdf

projects within the SEZ. The proposed SEZ is located on sections of the N1 motorway and the R525 road with a railway line running along the northwest side. This making it strategically positioned as part of the north south corridor and which could improve trade efficiency by providing a trade route to neighbouring countries. Furthermore, the SEZ could create employment opportunities for the areas which will be presented through various mixed use developments of the industrial park. This could improve economic development for the region and thereby positively contribute to the Southern African Development Countries.

2.2 Project Overview The Musina-Makhado Energy Metallurgical Special Economic Zone (EMSEZ) comprises two sites as designated by the Department of Trade and Industry in July 2016. This report deals specifically with the southern part of the Musina-Makhado SEZ which is located on eight farms (approximately 8,000 hectares) overlapping the border between the Makhado and Musina local municipalities, within the Vhembe District Municipality. The nearest towns are Makhado (located 31 km south) and Musina (located 36 km north) of the proposed SEZ site. This site is situated approximately 34 km from the northern site (Figure 1). The site is a greenfield site and is earmarked for the development of energy and a metallurgical cluster for the production of high-grade steel. The project objective is designed to attract foreign and domestic direct investment to promote industrial development by creating a new heavy industrial hub.

Figure 1: Musina-Makhado Special Economic Zone Proposed Location4. 24

Table 2 indicates the proposed capacity for the different projects comprising the Musina-Makhado SEZ. From this table it is evident that this is a large scale industrial complex which will have varying positive and negative impacts as will be discussed further in this report. Table 2: Summary of Proposed Projects for SEZ7 No. Project

Total planned capacity

Coal washery

20 000 000 tpa

Coke plant

3 000 000 tpa

Heat recovery power generation

390 MW

Thermal power plant

3300 MW

Ferrochrome plant

3000 000 tpa

Ferromanganese plant

500 000 tpa

Silicon manganese

500 000 tpa

Vanadium-titanium magnetite

High manganese steel

1000 000 tpa

High vanadium steel plant

1000 000 tpa

Stainless steel Plant

3000 000 tpa

Lime plant

1000 000 tpa

Cement plant

2 000 000 tpa

Refractories factory

Sewage treatment plant

140 000 m3/day

Industrial domestic water plant

300 000 m3/day

Light industrial processing zone

Machinery zone

Commercial residential area

Living area

SEZ administration centre

Bonded area

Logistics centre

10 000 000 tpa

500 000 tpa

Information not provided

IX engineers, 2019. EMSEZ – Internal Master Planning. Lynwood, Pretoria.

The construction phase will cover all leased land and is planned to commence in 2020 pending all required approvals. Table 3 below indicates the timeframes for construction which is anticipated to be complete in 2031. Table 3: Construction phase timeframes7 Project phases Early works and internal bulk infrastructure Phase 1 of plant construction Phase 2 of plant construction Phase 3 of plant construction

Timeframe Start 2020 2022 2026 2029

End 2021 2026 2029 2031

The SEZ comprises various heavy industrial projects which will require a large amount of water for day to day operations. It has been envisaged that the complex will require a feed of 80 million m³ water annually. Figure 2 below indicate the water balance for the proposed operations.

Figure 2: EMSEZ Site water balance7. 27

The proposed SEZ envisages to employ 53 800 people. Figure 3 below indicates the employment opportunities for the SEZ.

Figure 3: SEZ total labour figures7.

2.3 Project Setting The proposed project will impact on the surrounding areas in different ways. The section below describes the environmental setting surrounding the proposed SEZ and the various climate change receptors subject to impacts of the SEZ.

The proposed project will be established on eight farm properties across the Makhado and Musina local Municipalities within the Vhembe District Municipality of the Limpopo Province. The current land use of the site is agricultural. The town of Makhado (located 31 km south) and the town of Musina (located 36km north) are the nearest towns to the proposed SEZ.

The proposed SEZ site falls within the Musina Mopane Bushveld which is categorised as least threatened 8 and is regarded as the most diverse Mopaneveld type in South Africa 9 . The land capability of the proposed site is non-arable grazing woodland or wildlife, and wilderness. The soils provide uses for grazing, wildlife management and woodland with limited areas of soil outside the proposed site which are suited to arable agriculture. The historic land cover is indicated in Figure 4 below. 8 9

A least threatened or least concern species are those which has been categorised by the International Union for Conservation of Nature as evaluated but not qualified for any other category. Mucina, L, Ruthford, MC 2006. The Vegetation of South Africa, Lesotho and Swaziland, Strelitzia 19. South African National Biodiversity Institute Pretoria. Viewed 28 May 2019 https://www.sanbi.org/wpcontent/uploads/2018/05/Strelitzia-19.pdf

Figure 4: Land cover 4.

It is envisaged that the SEZ will require 80 million cubic metres of water per annum, as indicated in Figure 2 above. Table 4 below shows the current and future water balances of the Musina area. The project team has indicated that a large portion of the water will be sourced from the Limpopo River as well as various water bodies in Zimbabwe. For the construction phase, ground water abstraction has been considered along with abstraction of water from the Limpopo River. As the Limpopo Water Management Area forms part of internationally shared water basin between Botswana, Zimbabwe, South Africa and Mozambique, international agreements and obligations will have to be made and met as these countries will be impact by the water demand of the SEZ.

Table 4: Current and future water balance of Musina area with interventions 10. Interventions

2015

2020

2025

2030

2035

2040

Water Requirements

Musina area Total Requirements (Musina Town and SEZ)

7.96

31.25

65.52

66.83

70.36

73.36

Sources and Interventions

Zimbabwe to South Africa Water Transfer (Beitbridge Water Supply Scheme and other potential sources)

LEIP Limpopo River abstraction and off-channel storage dam

Reuse of Musina Treated Effluent

Limpopo Alluvial Aquifer

10.4

2.44

4.15

2.88

3.57

0.04

- 2.96

Shortfall or surplus

Smaller alternative water reserves are the Nzhelele Dam (50km northeast of Makhado) the Sand River and the Mutamba/Nzhelele River, both perennial rivers that flows mainly in winter and situated 10km north and 20km east of the proposed SEZ respectively. Multiple small wetland are scatted across the eight farms with the proposed SEZ falling within the Limpopo Water Management Areas and the Sand Sub-Water Management Area.

Limpopo has rich biodiversity that forms the basis of a prosperous tourism industry as a result of the Kruger National Park, smaller nature reserves and several luxury private game reserves. It is also home to the Mapungubwe Cultural Landscape, one of South Africa’s eight World Heritage sites. Tourism, along with mining, and agriculture has been identified in the Limpopo Development Plan5 as important sectors to help drive employment and economic growth for the Province. The SEZ site is located within the Vhembe biosphere reserves of which has three biomes, Savanna, grassland and forest. A number of nature reserves and conservation areas have been established in the Vhembe biosphere which aid in conserving the environment and are presented in Figure 5.

MMSEZ Progress Report Musina 16 July 2019, RSA/Zimbabwe Water Project, Musina/Makhado MMSEZ Water Supply, National Department of Water and Sanitation, Water Resource Planning, Pretoria, South Africa.

Figure 5: Vhembe Biosphere Reserve4 . The proposed SEZ is within an area that is considered a least threatened ecosystem and is surrounded by the Mapungubwe, Soutpansberg and Blouberg Important Bird and Biodiversity areas. The Limpopo Conservation Plan11 categorizes the northern area in which the SEZ site falls as an Ecological Support Area and indicates this area as occurring in a largely natural state that retains significant importance from a landscape connectivity perspective. The Southern areas of the SEZ proposed site is considered a critical biodiversity areas2. Critical biodiversity areas are identified in order to support integrated development planning and sustainable development. Furthermore, they are designed to avoid conflict with existing Integrated Development Plans, Environmental Management Frameworks, and Spatial Development Frameworks in a region by favouring the selection of sites that are least conflicting with other land-uses. Drought and veld fires have been found to be a key biodiversity threats to the area together with limited supply of ground and surface water due to the increasing demand for water with regards to agriculture, mining and domestic use. Coupled with the fact that existing water resource are being negatively impacted due to pollution as a result of pesticides, poor land management and poorly managed sewerage, climate change is expected to exacerbate these treats to biodiversity12.

The proposed SEZ is not located within a formal setting as there is low urban development in the immediate surroundings. The nearest formal towns are Louis Trichardt (Makhado) approximately 40km South and Musina approximately 35km north of the proposed SEZ. The following summary 11

Desmet, P. G., Holness, S., Skowno, A. & Egan, V.T. (2013). Limpopo Conservation Plan v.2: Technical Report. Contract Number EDET/2216/2012. Report for Limpopo Department of Economic Development, Environment & Tourism (LEDET) by ECOSOL GIS Vhembe District Municipality, 2016. Vhembe District Municipality Climate Change Vulnerability Assessment Response Plan, s.l.: s.n.

of informal settlements which are situated in close proximity to the proposed SEZ site indicated below: •

Matsa - 25km South East

•

Mopane within proposed location - 1km West

•

Mudimeli - 10km South East

•

Makushu - 17km East South East

•

Bonjane - 18km East

•

Numerous farm houses

Figure 6: Percentage of households in informal dwellings in the Vhembe District Municipality12 The percentage of informal households is illustrated in Figure 6 above indicates higher informal dwellings in the Musina and Makhado local municipalities when compared to the Thulamela and Mutale local municipalities. This highlights the vulnerability of the area due to the fact that poorer regions are impacted more by climate change as they do not have the adaptive capacity to withstand significant disruptions brought forth by variable weather such as droughts and floods.

Climate Change Context 3.1 Global Context Anthropogenic climate change as a global phenomenon is caused by the accumulated greenhouse gas emissions from global emitting sources. The impact thereof on society is increasingly of concern. Recently CO2 levels surpassed 415 parts per million for the first time in recorded history13. Various scenarios have been developed to model climate change impacts for both mitigated (reducing emissions) and unmitigated (business as usual) options. The receiving environment for this project, in the context of climate change, is the global atmosphere. The duration of the impact of the greenhouse gas emissions is considered as effectively permanent as the greenhouse gas emissions produced remain in the atmosphere for an extended period of time. In 2015 the world agreed in the Paris Agreement that the target to limit global warming should be a 2°C increase of average global temperature above the pre-industrial average temperature. The Intergovernmental Panel on Climate Change (IPCC) estimated in the 5th Assessment Report26 that the global limit is to emit a total of 2,900 gigatons of CO2e by 2100, since pre-industrial times. By 2012, a total of 1,890 gigatons of CO2 had already been emitted. This leaves a remaining budget, for the period between 2012 and 2100, of 1,010 gigatons of CO2 before the 2°C limit is breached. The practical implication of having a carbon budget is that this is the maximum amount of emissions that can be emitted. In the context of environmental impact assessments this constitutes a limited resource. If the limit presented by this amount is exceeded, then the planet as whole will suffer irreparable damage with dire consequences to the global society. The Paris Agreement, however, also states that the world should increase ambition and aim for a target of 1.5°C. This is in order to reduce significant and far reaching impacts associated with climate change such as sea rise, desertification, ocean acidification, biodiversity loss and increased frequency and intensity of extreme weather events. The IPCC reported in 2018 an estimate of the remaining carbon budget of 580 gigatons CO2 for a 50% probability of limiting warming to 1.5°C, and 420 gigatons CO2 for a 66% probability (medium confidence)14. The global nature of climate change impacts is such that the greenhouse gas emissions from any individual project or source cannot be connected directly to any specific environmental impacts. The analyses in this report are presented in the context that, even though the individual greenhouse gas emission contribution of a project cannot be directly linked to specific localised climate change impacts, global climate change is nevertheless significant and can be quantified as such. In other

USA Today, Carbon dioxide levels hit landmark at 415 ppm, highest in human history, viewed 31 May 2019: https://www.usatoday.com/story/news/world/2019/05/13/climate-change-co-2-levels-hit-415-parts-permillion-human-first/1186417001/. IPCC, 2018. IPCC, 2018: Summary for Policymakers of IPCC Special Report on Global Warming of 1.5˚C approved by governments, IPCC, Viewed 31 May 2019: https://www.ipcc.ch/2018/10/08/summary-for-policymakers-of-ipccspecial-report-on-global-warming-of-1-5c-approved-by-governments/

words, the specific greenhouse gas emissions from the proposed SEZ cannot be attributed directly to any particular climate change effects. Despite this, there is a collective responsibility to address the global challenge of climate change and each actor, such as the proposed SEZ, has an individual responsibility to minimise its own negative contribution to climate change.

3.2 Local Context The single largest source of GHG emissions in South Africa are coal fired power stations where almost 90% of the country’s electricity comes from. This coal intensive energy system has resulted in the country being the 14th largest GHG emitter in the world and thus a significant contributor to global GHG emissions15. Coal fired power stations not only contribute to climate change but are also at risk from the impacts and consequences of climate change. South African is particularly vulnerable to the effects of climate change with regards to the environment as well and the socio-economic context. The variable nature of climate change in terms of increase frequency and intensity of extreme weather events will be consequential for the South African society. Furthermore, South Africa is a water stressed country with predictions indicating future drying, increased droughts and variable and rainfall. South Africa’s response to climate change South Africa’s National Development Plan 2030 (NDP) is centred on reducing inequality and eliminating poverty by 2030. Climate change impacts and climate change mitigation are highlighted as critical issues in Chapter 5 the NDP. This forms the basis of the following set of goals and action to meet the country’s environmental sustainability and resilience needs have been mentioned16: • Achieving the peak, plateau and decline trajectory (PPD) for GHG emissions; • Entrenching an economy-wide carbon price by 2030; • Implementing zero emission building standards by 2030; and • Achieving absolute reductions in the total volume of waste disposed to landfill each year. South Africa’s climate change response is also set out in the National Climate Change Response White Paper17 which proposed that climate change be addressed through various interventions that build and sustain social, economic and environment resilience by retaining a fair contribution to the global efforts to stabilise GHG concentrations in the atmosphere. South Africa’s Nationally Determined Contribution (NDC) submitted in Paris in 2015 sets out the nation’s emissions trajectory up to 2050. South Africa’s emissions are expected to peak between 2020 and 2025, plateau for approximately a decade and decline in absolute terms thereafter (the ‘peak, plateau and 15 16

Global Carbon Atlas, 2017. http://www.globalcarbonatlas.org/en/CO2-emissions Draft, South Africa’s Low Emission Development Strategy 2050, Available at https://www.crediblecarbon.com/wp-content/uploads/2019/07/Draft-South-Africas-Low-EmissionDevelopment-Strategy-2050.pdf Available at https://www.gov.za/sites/default/files/gcis_document/201409/nationalclimatechangeresponsewhitepaper0.pdf

decline trajectory’). Overall, the amount of emissions planned to be emitted from 2020 to 2050 within South Africa’s PPD range from 10.6 – 17.0 GtCO2e. South Africa, as a developing nation, requires some allowances to increase its emissions in the short-term, to foster economic growth and steadily transition towards a low carbon economy. However, the South African Government expresses through the White Paper, the Integrated Resource Plan18 that a shift to low-carbon electricity generation options will only be possible in the medium term, and not immediately. South Africa is not limiting itself to specific emissions numbers, but the NDC rather provides a peak, plateau and decline trajectory range from the year 2016 (reference point) to 2050. The country’s lower boundary peak, plateau and decline trajectory pledge is set at 398 Mt CO2e and the upper boundary at 614 Mt CO2e for the years 2025 to 2030. The Climate Change Bill (which is not yet finalised) is expected to make provision for regular updates of this trajectory, through which it can be better placed within the context of the Paris Agreement. However, the issue under consideration is the global shortfall in targets to reach the goal of limiting average temperatures to well below 2°C above pre-industrial levels. In this regard countries such as South Africa must negotiate and determine how to achieve such a target, and how to possibly accelerate efforts to achieve a 1.5°C target through the ratchet mechanism as contained in the Paris Agreement. The ratchet mechanism requires countries to submit new NDCs every five years, outlining how much they intend to reduce emissions. Each submission should be more ambitious than the last. South Africa’s NDC has been assessed as insufficient to meet a 2°C target. A ratcheted South African NDC (which could be categorised as a transitional risk) within the approximate period 2022-2025 could have an impact on the longevity of projects such as the proposed SEZ. In addition to the NDC, the base case of South African draft updated Integrated Resource Plan (IRP)18 incorporates the CO2 emissions constraints as guided by the country’s peak, plateau and decline trajectory. The draft updated IRP applies the moderate decline annual constraints as an instrument to reduce national emissions, which is in line with government policy to reduce greenhouse gas emissions. Government’s policy might change in the future, as per the developments of the Department of Environmental Affairs mitigation system and proposed Climate Change Act. A process is currently being undertaken by the NPC to develop a common vision for the country in 2050. As developing countries will suffer the most from the negative impacts of climate change as a result of a collective failure to limit global emissions, developed countries must take the lead in reducing emissions.

South Africa’s share of this global budget must be seen in the context of the global carbon budget of 1,010 gigatons of CO2 for the 2°C Scenario, as described above. In order to make a reasonable 18

Department of Energy, 2016. Integrated Resource Plan Update Assumptions, Base Case Results and Observations [Online]., Pretoria: Department of Energy. It is noted that the IRP of 2010 was the binding IRP at the time of drafting of this report and that a final updated version of the IRP was published in 2019. However, this still makes provision for coal fired power stations to be built in South Africa.

allocation of the country’s fair share to this budget, the global budget was calculated in a per capita basis. The national population figure for South Africa is 58 million people19. If this is taken as a percentage of the global population of 7.7 billion people20, then South Africa’s carbon budget is approximately 7,572 Mt CO2e. The evaluation of the impact of the SEZ on this limited resource will therefore be done by considering its contribution to South Africa consuming its carbon budget. For the 1.5°C Scenario, South Africa’s carbon budget is approximately 4,411 Mt CO2e.

Despite the global and national commitment to limiting global temperature increase to 2°C, the NDCs of all countries combined cover only approximately one third of the emission reductions needed to achieve this goal. Therefore, there will be significant climate change impacts affecting South Africa, and thus the proposed SEZ, regardless of whether the global community implements the NDCs. As a consequence, while the impact of the SEZ on climate change may be small, the impacts of climate change on the SEZ could potentially be large. Risks resulting from climate change impacts may include increasing land-surface temperatures, increasing rainfall variability, decreasing overall rainfall, as well as increasing frequency and intensity of extreme weather events. These risks relate to: •

Decreasing water availability and quality may negatively affect the SEZ’s direct operations as well as the upstream and downstream value chain;

•

Damages to infrastructure which could disrupt operations, transport of goods and lead to increased risk of injury;

•

Labour productivity decrease due to excessive heat exposure;

•

Health of employees which may be compromised due to rising food insecurity and an increased number of casualties as a result of heat effects;

•

Declining air quality may impact on the issuance or conditions of issuance of air quality licences for operations in the SEZ;

•

Disruption to commerce, critical infrastructure and developments, transport systems and traffic by extreme rainfall events and flooding will impact on the SEZ’s ability to operate;

•

Increased number of power outages, water supply and transport disruptions; and

•

Increased risk of infectious, respiratory and skin diseases, water- and food-borne diseases. Pathways for a just transition for the Province of Limpopo

The National Planning Commission (NPC) is currently aiming to build a consensus on a vision and pathway for an equitable and sustainable South Africa in 2050 through the National Development Plan’s, Pathway for a Just Transition. The NPC has agreed that climate change is an urgent and cross cutting issue and will be addressed in all chapters of the NDP. The following 19 20

Stats SA, 2018. Mid-year population estimates 2018. Viewed 31 May 2019 http://www.statssa.gov.za/?p=11341 Worldometers, 2019. Current world population. Viewed 31 May 2019 http://www.worldometers.info/worldpopulation/

challenges and issues were identified through the pathway for a just transition workshops conducted by the NPC21; • • •

•

Lack of awareness about climate change and environmental factors; Lack of buy-in from management to enact climate change solutions; Poor planning with regards to future climate change implications. Municipalities do not investigate what the current weather and future climate impacts will be and as a result settlements are situated on climate vulnerable areas such as flood lines; and The need to for strong education and awareness campaign around the impacts of climate change and land-use alongside a capable state.

Climate change management should therefore not be limited to emissions reductions (mitigation) and should focus on adaptation measures as well. Identifying impacts of climate change on the project will therefore be considered in this assessment, which can inform the SEZ’s design, development and closure/rehabilitation strategies to reduce risk exposure and ensure long-term sustainability.

3.3 Observed Trends and Projected Climate Change National overview The impacts of climate change on South Africa have been summarised in the Department of Environmental Affairs’ Long Term Adaptation Scenarios (LTAS) study 22 . However, significant progress has been made in South Africa since the LTAS in terms of the local generation of detailed regional climate futures for the country. The most recent modelling was conducted for South Africa’s Third National Communication23. The past forty years have shown that for South Africa there has been an increase in intensity and frequency of hydro-metrological hazards such as storms, floods, wildfires, droughts and extreme temperatures and it is likely that the frequency of these events will continue to increase in the years to come24. This had impacted 21 million people and claimed the lives 1,692 people in the country25 Furthermore, South Africa is expected to experience high population and urbanisation growth in the next thirty years which emphasises the impacts of an increase in the frequency and intensity of 21 22

The Department of Planning, Monitoring and Evaluation, National Development Plan: Pathways for a Just Transition Limpopo Stakeholder Dialogue Meeting 3 April 2019, Polokwane, Limpopo. DEA, 2013. Long-Term Adaptation Scenarios Flagship Research Programme for South Africa. Climate Trends and Scenarios for South Africa., Pretoria.: Department of Environmental Affairs. DEA, 2017a. South Africa's Third National Communication under the United Nations Framework Convention on Climate Change, Pretoria: Department of Environmental Affairs. UN ESA (United Nations Department of Economic and Social Affairs, Population Division). 2014. World Urbanization Prospects: The 2014 Revision, custom data acquired via website. [Online] Available at: https://esa.un.org/unpd/wup/DataQuery. CRED (Centre for Research on the Epidemiology of Disasters). 2018. EM-DAT: CRED/OFDA International Disaster Database. Brussels: Université Catholique de Louvain. [Online] Available at: http://emdat.be/emdat_db/.

extreme weather event on settlements due to a growing exposure to the high socio-economic vulnerability24. With an increase in population expected, more people in these areas are exposed and impacted. Air temperatures in South Africa have increased at least 50% more than the global annual average of 0.65 °C over the last five decades. The IPCC found in its fifth assessment report that it is likely that land temperatures over Africa will rise faster than the global land average, particularly in the more arid regions, and that the rate of increase in minimum temperatures will exceed that of maximum temperatures26. This indicates that in a world of more than 2°C average temperature change, South Africa could experience changes of over 3°C.

Approximate location of South Africa

Figure 7: Projected Southern African temperature change under RCP4.526.

IPCC, 2014. Fifth Assessment Report of the IPCC, s.l.: s.n.

For the far-future period of 2080-2099, temperature increases of more than 4 °C are likely over the entire South African interior, with increases of more than 6 °C plausible over large parts of the western, central and northern parts. Such increases will also be associated with drastic increases in the number of heat-wave days and very hot days, with potentially devastating impacts on agriculture, water security, biodiversity and human health. From Figure 8 below it is evident that there is a projected decrease in precipitation during the wet season (October to March) towards the year 2100 projected for Southern Africa. Sustained warming and increasing variability in rainfall over the short term (next decade) will have increasingly adverse effects on key sectors of South Africa’s economy in the absence of effective adaptation responses. Early impacts will largely be felt by the poor and vulnerable groups in society. These societal groups are both more exposed and more sensitive to fluctuations in weather patterns and climatic events such as droughts and floods. In addition, poverty and a lack of infrastructure or service provision erodes the adaptive capacity of these communities to climate change, rendering them increasingly vulnerable.

Figure 8: Projected precipitation change for South Africa under different emissions scenarios26 Provincial overview The two most significant climate change projections in the Province are increases in average temperatures and rainfall variability. The Limpopo Province is likely to experience regular droughts and heat intensity, water shortages, and possible diseases spreading related to the chases in climatic conditions which will have adverse effects on the economy, natural resources, infrastructure, human health and community livelihoods. The projected changes as a result of climate change in Limpopo are12: •

Regular droughts and heat intensity;

•

Water shortages;

•

An increase in natural disasters such as floods and fires;

•

Shifts in species and localisation of species; 39

•

Migration of rural populations;

•

Contamination of ecosystems from water and waste pollution; and

•

Increases in communicable and non-communicable diseases in urban and rural areas

3.3.2.1

Temperature

The Limpopo province is highly vulnerable to climate change, with South Africa’s LTAS suggesting that the Limpopo province could face a potential increase in temperatures by as much as 2°C by 2035 with further temperature increase forecasted by as much as 6 °C to 7 °C between 2080 and 21005. Mean temperature ranges between 20 - 22˚C for Makhado and with Musina experiencing hotter conditions with mean temperature ranges of 24-26˚C. The area in which the SEZ is proposed to be located indicates tendencies for drought as well as experiencing elevated temperatures (very hot days) of over 35˚C between 60 and 90 days a year. Figure 9 below shows the projected drought tendencies for the period 1995-2024, relative to 1986-2005 baseline period, under low mitigation scenario (RCP 8.5). A negative value indicates an increase in drought tendencies per 10 years.

SEZ Site

Makhado

Thohoyandou

Senwabaranwa Mogwadi

Figure 9: Limpopo drought tendencies for the period 1995-202427.

Engelbrecht, F., Le Roux, A., Arnold, K. & Malherbe, J. 2019. Green Book. Detailed projections of future climate change over South Africa. Pretoria: CSIR. Available at: https://pta-gis-2web1.csir.co.za/portal/apps/GBCascade/index.html?appid=b161b2f892194ed5938374fe2192e537.

Temperature related climate change impacts include crop loss due to extreme weather conditions and the spread of pests into new areas as temperatures become more favourable. In an area where rural communities depend on cultivating their own crops, changing temperature patterns might cause a decline in rural farming and annual harvests, jeopardising sufficient food levels for these communities. Furthermore, an increase in average temperature levels associated to climate change might have an adverse effect on the SEZ’s labour force as employees work outdoors will therefore be particularly vulnerable to increases in temperature. Consequently, the rising temperatures may pose health hazards, reduce labour productivity, and worsen air quality conditions within SEZ. 3.3.2.2

Rainfall and water

In the case of the proposed SEZ, water is considered from a regional perspective as climate change impacts related to water do not only affect the source of water directly related to the SEZ but also the water areas surrounding the site. It is therefore, extremely important that both surface and ground water studies be conducted to delineated availability, capacity and future balances as a result of the water demand for the SEZ as well as the water demand of a growing population within the Musina and Makhado municipalities. Rainfall averages 588mm per annum in Makhado and decreases moving north towards Musina which has an average of 426 mm per annum. For both these areas the majority of the rainfall falls in the summer months of October through to January. The proposed SEZ site is located within a low to medium flooding hazard with areas approximately 25km South and South East of the proposed SEZ site being indicated as high to very high flood hazards. Figure 10 below shows the flood Hazard index of the different quinary catchments present or intersecting with the municipality. The flood hazard index is based on the catchment characteristics and design rainfall, average at the quinary catchment level.

SEZ Site

. . .

Makhado

Thohoyandou Malamulele

Senwabaranwa Mogwadi

Giyani

Modjadjiskloof

Figure 10: Flood Hazard index27. Rainfall projections for the Limpopo Province show levels of uncertainty however, evidence suggests decreases in annual rainfall22. The combination of significantly increased temperatures and lessened rainfall will contribute to an increase in evaporation rates, further implying a drier future despite the possibility of periodic heavy rainfall events. The current and projected climatic variability will greatly impact on Limpopo’s water supply and quality provision, which could in future constrain the province’s economic growth. This is specifically relevant in the provincial context of the proposed SEZ as the Limpopo province is already vulnerable to droughts and variable rainfall patterns. Water intensive sectors, such as energy and metallurgical industries that will be located in the SEZ could face major operational challenges. Municipal overview The proposed SEZ falls on the boarder of the Musina and Makhado Local Municipality, located in the Vhembe District Municipality. Vhembe District Municipality comprises four local municipalities namely; • Makhado Local Municipality (population 516,031); • Musina Local Municipality (population 68,359) • Thulamela Local Municipality (population 618,462); and • Mutale Local Municipality (population 91,870)

District has a total population of approximately 1,294,72228. It has a high unemployment rate of 24.9% with 50.8% not economically active and only 21.26% of the population having a matric certificate 12. During 2016 the Vhembe District Municipality developed a Climate Change Vulnerability Assessment and Response Plan to address the threats posed by climate change on sustainable development. Key climate change vulnerability indicators were identified as part of the District’s climate change assessment. The relevant indicators within the context of the project location and scope are summarised in the following table: Table 5: Vhembe District Municipality key climate change vulnerability indicators12. Theme

Indicator Title

Agriculture

Biodiversity and Environment Human Health

Human Settlements, Infrastructure and Disaster Management

Exposure

Sensitivity

Reduced food security Change in grain (Maize, wheat & barley) production Loss of Grasslands

Yes Yes

High High

Adaptive Capacity Medium Low

Yes

High

Medium

Health impacts from increased storm events Increased heat stress Increased vector borne diseases from spread of mosquitoes, ticks, sand flies, and blackflies Increased water borne and communicable diseases (typhoid fever, cholera & hepatitis) Increased malnutrition and hunger as a result of food insecurity Increased air pollution Increased Occupational health problems Increased isolation of rural communities Increased migration to urban and peri-urban areas. Note that climate change impacts in other areas in South Africa, as well as its neighbouring

Yes

High

Low

Yes Yes

High High

Low Medium

Yes

High

Low

Yes

High

Medium

Yes Yes

Low High

Low

Yes

High

Medium

Yes

High

Low

Stats SA, 2018. Popoulation Limpopo, 2019. Viewed 3 June 2019 Available at: http://www.statssa.gov.za/?page_id=964

Water

countries can cause migration to SDM Less water available for irrigation and drinking Decreased water quality in ecosystem due to increased concentrations of effluent and salt concentrations

Yes

High

Low

Yes

High

Low

Additionally, Agriculture, Forestry and Fisheries (AFF) contributes 13.76% to total employment in the Makhado municipality and 0.7% to the national AFF Gross Value Add (GVA). Musina AFF contributes significantly more jobs (36%) to the area, and yet contributes less (0.52%) to the national AFF GVA. As indicated in the above table, the Vhembe District municipality has a low adaptive capacity with regards to impacts of climate change on agriculture. This threatens the sustainable development of the district which relies on AFF for employment. Furthermore, the South African online planning tool, the Green Book, provides quantitative scientific evidence on the likely impacts that climate change and urbanisation will have on South Africa’s cities and towns. The Green Book has quantitatively rated all South African municipalities using multi-dimensional vulnerabilities such as socio-economic, economic, physical and environmental. Musina and Makhado are rated 195 and 168 respectively out of 213 municipalities (higher rating indicates higher vulnerability) in South Africa in terms of environmental vulnerability, an indicator representing the conflict between preserving the natural environment and accommodating the growth pressures associated with population growth, urbanisation and economic development. This again emphasizes the vulnerability of the municipalities to the disrupting effects of climate change and further highlights the need for careful consideration of the climate change implications that constriction of large industries could impose on the municipalities’ resource dependency.

3.4 Other Potential Climate Change Dimensions Relevant to the SEZ Other potential climate change risks are those that relate to climate change but cannot be classified as physical or regulatory risks. These risks can include: • Reputational risk, especially concerning negative perceptions of the general public or investors; •

Changes in consumer behaviour relating to customer preferences for products/services;

•

Induced changes in human and cultural environments (for example, migration and cultural changes);

•

Fluctuating socio-economic conditions;

•

Increasing humanitarian demands, as climate change impacts are experienced. 44

South Africa, and the Limpopo Province, has an economically divided society due to a number of socio-economic disparities. As a result, its population is characterized by a vulnerable majority. The vulnerable majority is more exposed to climate change impacts and may pose risks to large industrial developments such as the SEZ, either through migration of workforces or increased humanitarian demands.

Methodology 4.1 Impacts of the Project on Climate Change The following subsections outline the methodology used to assess the impacts the MusinaMakhado SEZ development will have on greenhouse gas emissions. The results of the carbon footprint calculations and the assessment of its environmental impacts are presented in section 6 of this report. The methodology used to assess the impact of the project on climate change was developed in the context that data, such as plant/process design, fuel/energy consumption and construction plans, could not be provided by the client for the various planned activities within the SEZ. What little data was provided could not be reliably corroborated with any supporting evidence. Greenhouse gas emissions estimation methodology The emissions calculated in this report consider the emissions from activities envisioned as part of the SEZ. An umbrella approach was followed for the SEZ which considered the emissions of the SEZ in its entirety. This report assumed that an Environmental Impact Assessment (EIA) and related climate change impact assessment, including establishing a greenhouse gas inventory, will be completed for each of the proposed activities within the SEZ. As the designs for the various activities and related plants envisaged for the SEZ, as listed in Table 2 above, has not yet been finalised, the emissions for each of these plants cannot yet be calculated. Therefore, this assessment has determined emission intensities for the various activities envisioned within the SEZ (based on available information), required to achieve national and international climate change objectives. These intensities should serve as suggested benchmarks to guide and inform the environmental authorisation processes related to each of the activities to take place within the SEZ. This methodological approach is illustrated in the following figure:

Indicative emissions calculated for entire Special Economic Zones

Emission intensities guidelines to be used for further environmental authorisations

Musina-Makhado Special Economic Zone

Individual EIAs

Industry intensity benchmarks Individual EIAs

Best practice intensities

Individual EIAs

Figure 11: Proposed Methodology boundary and input

The calculation of the various emission intensities was a 2-step process: Step 1:

Step 2:

Historic and current best practice emission intensities were determined. These emissions were calculated making use of industry benchmarks and carbon emission intensities published in the “GHG Emissions Intensity Benchmarks for South Africa’s Carbon Tax” prepared by Ecofys for National Treasury. This formed the starting point of the assessment. The second step was to contextualise the emission intensities in relation to national and international targets and commitments. In this regard, South Africa’s Nationally Determined Contribution (NDC) to the Paris Agreement was considered.. However, as the Paris Agreement has called for more progressive commitments were possible, the 2018 IPCC 1.5°C Special Report was used as a point of reference as well. The NDC allows for a Peak Plateau and Decline (PPD) trajectory for South Africa, whereas the IPCC 1.5°C Report goes further and proposes that the world as a whole should have net-zero emissions by 2050. It was assumed that the various activities envisioned as part of the SEZ will be operational by 2030. The plants associated with the various activities in the SEZ will be operational under intense emission reduction pressure, both locally and globally. From a global perspective, in order to achieve a 1.5°C temperature target, the emissions from the plants should reach zero over their expected lifetime. Locally, South Africa’s NDC commitments requires significant emission reductions from 2035 onwards. The intensity methodology thus assumes that the intensity the plant will be built with would represent its emission intensity for at least the first ten years of its operating 46

life. In this respect, individual plants/activities should meet the suggested 2030 emission intensities as part of their respective environmental authorisation processes. This analysis used an internationally accepted methodology to estimate what the emission intensities by 2030 should be, for a 2°C target, as developed by the Science Based Target Initiative (SBTi)29. Detailed information is not yet available for the construction phase for each of the individual plants. As mentioned, it is assumed that an EIA and related climate change impact assessment will be completed for each of the applicable activities within the SEZ. During such an assessment, it is assumed that the required level of detailed data will be made available which can be used to calculate the emissions associated with the construction and decommissioning phases of each of the activities. Due to the nature of the various activities envisioned for the SEZ, these plants will have high process emissions during the operational phases. Compared to the process emissions, it is expected that the construction and decommissioning phase emissions of the plants will be insignificant. Nevertheless, it is important that the impacts of climate change are considered in the decommissioning and rehabilitation plans within each of the separate EIAs. The South African Greenhouse Gas Reporting Technical Guideline prescribes that direct emissions be considered for mandatory greenhouse gas reporting. The intensity methodology applied to this study considers the various direct emissions from the various planned activities within the SEZ. As such this methodology meets South Africa’s Greenhouse Gas Reporting regulations. Following the above, the calculation of the emissions were done as indicated in sections 4.1.1.1 and 4.1.1.2 below. 4.1.1.1

Current industry emission intensity benchmarks

The intensities presented in Table 6 below are presented in tonnes of carbon dioxide equivalent (tonne CO2e) per tonne of output product. The intensities include both Scope 1 and 2 emissions. The benchmarks represent the global industrial average emission intensity for the identified industries.

https://sciencebasedtargets.org The SBTi is one of the mechanisms that can assist in meeting the Paris Agreement outcomes. Its agenda is to align the emission reduction targets to scientifically established global carbon budgets. The initiative is motivated by the fact that, to date, global actions and the NDC commitments from states are not sufficient to meet the global objective of limiting temperature increases to 2°C. The SBTi states that emission reduction targets are ‘sciencebased’ if they are in line with the level of decarbonisation required to keep global temperature increase below 2°C compared to pre-industrial temperatures, as described in the Fifth Assessment Report of the IPCC.

Table 6: Emission intensity benchmarks used Plant

Value

Unit

Reference

0.3 - 0.5

t CO2e/t product