South Africa

This Country Framework is part of the Regulatory Frameworks for Project-Based Carbon Credit Markets. To learn more click here.

Overview

South Africa’s project-based carbon credit market (PCCM) is primarily governed by the Carbon Tax Act (2019) and its associated carbon offset regulations, which regulate the use of within the carbon tax system.¹ The framework is focused on for compliance use, rather than voluntary markets. Phase 1 of the carbon tax (2019–2022, extended to the end of 2025) allows firms to use offsets to cover 5 percent for industrial process and fugitive emissions, and 10 percent for combustion emissions of their carbon tax liability. Phase 2 (2026–2030) could increase the offset limits by an additional 5 percent.² The draft tax amendment bill that amends Phase 2 offset limits is awaiting approval in the Parliament of the Republic of South Africa as of January 2026. The regulations do not outline rules for the voluntary use of outside the compliance program.

Eligible offsets must be generated from approved domestic project types and issued under recognized standards, then listed, transferred, and retired through the Carbon Offset Administration System (COAS), which serves as the central authority for determining eligibility and use under the carbon tax.³ In 2024, South Africa released a draft Article 6 Framework outlining how it intends to participate in the Paris Agreement carbon markets. The framework builds on existing systems, including the carbon tax offset regime and COAS, and sets principles for alignment with nationally determined contributions (NDCs), third-party standards, additionality beyond regulation, and sustainable development benefits. No bilateral Article 6.2 agreements have yet been concluded.

Market activity in South Africa remains anchored in COAS, which is the only registry through which credits can be listed, transferred, and retired for carbon tax compliance. Alongside this compliance infrastructure, several voluntary market trading channels operate independently of regulation. The Johannesburg Stock Exchange (JSE) Ventures, in partnership with Xpansiv, has launched the JSE Ventures Carbon Market (JSE-V Carbon) platform to facilitate trading in both domestic and international voluntary credits, including COAS. It must still follow COAS’s separate procedures for cancellation and retirement, should buyers choose to use it for carbon tax offsets.⁴ Additional private sector market infrastructure includes the Green Asset Exchange, which partners with Credible Carbon, one of South Africa’s voluntary carbon registries, to offer locally generated voluntary credits,⁵ as well as widespread over-the-counter (OTC) brokerage and bilateral contracting that dominate the voluntary market.

In 2025, the National Treasury (NT) released a consultation paper on developing the South African carbon credit market, proposing reforms to support broader carbon credit trading, including voluntary use,⁶ but these proposals remain consultative and have not yet been incorporated into binding regulation.

I. Supply-Side Regulations

South Africa’s project-based carbon credit supply is governed through the carbon offset regulations under the Carbon Tax Act (2019), which limit eligibility to approved mitigation projects undertaken in South Africa and linked to activities outside the scope of the carbon tax.⁷ Eligible offsets must be issued under recognized third-party standards and administered through the Carbon Offset Administration System, which records project approval, ownership, and the cancellation and retirement of credits used for compliance.⁸

In 2022, the Department of Mineral Resources and Energy (DMRE; now Department of Electricity and Energy [DEE]) published a draft framework of domestic standards for the South African Carbon Offsets Program for public consultation. It outlines both how South Africa will develop, evaluate, and approve domestic carbon offset standards and the principles, criteria, and procedural requirements that these standards must meet—such as environmental integrity, governance, and transparency—to qualify for use under the national carbon tax offset system, alongside eligible international standards.⁹ In 2024, South Africa released a draft Article 6 Framework indicating that the existing offset regime and COAS would underpin future participation in international carbon markets, subject to further regulatory alignment.¹⁰ In parallel, the National Treasury’s 2025 consultation paper on developing the carbon credit market highlights structural constraints affecting supply, including reliance on external standards, long project development timelines, fragmented registry and trading architecture, and the unclear legal status of carbon credits.¹¹ While the paper proposes reforms to modernize COAS and support broader market development, these proposals remain consultative, and the current supply framework continues to be defined by compliance use under the carbon tax.

A. Regulatory Framework

Market Classification: Regulations specifically cover compliance markets, which allow the use of Voluntary carbon markets are currently not regulated.
Regulatory Status: South Africa’s carbon market is governed by the Carbon Tax Act (2019)¹² and the associated carbon offset regulations,¹³ which establish the legal framework for carbon pricing and the use of offsets for compliance, including eligibility rules and administration through COAS. Recent policy developments, including the draft Article 6 Framework (2024)¹⁴ and the National Treasury’s 2025 consultation paper on developing the carbon credit market,¹⁵ indicate potential expansion and refinement of the framework, subject to further regulatory action.
Key Authorities: The key authorities governing South Africa’s PCCM are as follows:¹⁶
Presidential Climate Commission (PCC): Advises the president and cabinet on climate policy, including recommendations on South Africa’s NDC and just transition priorities.
National Treasury: Designs carbon pricing and carbon market policy, including the Carbon Tax Act and the carbon offset regulations, and leads consultations on carbon market reform and financial regulation.
South African Revenue Service (SARS): Administers and collects the carbon tax and applies offset allowances and tax-free thresholds under the Carbon Tax Act, including measurement, reporting, and verification (MRV) requirements.
Department of Forestry, Fisheries and the Environment (DFFE): Leads national climate policy and mitigation planning, oversees climate legislation and MRV systems, and ensures alignment with South Africa’s NDC.
Department of Electricity and Energy (DEE)―formerly known as the Department of Mineral Resources and Energy (DMRE) before it was split into the DEE and the Department of Mineral and Petroleum Resources in 2024:¹⁷ Administers the COAS, including the listing, transfer, and retirement of carbon used for carbon tax compliance. Previously, the Designated National Authority (DNA) acted as the official body for evaluating, approving, and promoting Clean Development Mechanism (CDM) projects. The DEE is potentially designated to be the DNA for Article 6.4 in the future.
Sanctions: No sanctions or penalties are specified. Consequences are limited to administrative rejection of applications, correction requests, or failure to list offsets.¹⁸ The Climate Change Act (2024) introduces criminal offenses and penalties for noncompliance with obligations under the act, including fines of up to R 10 million (approximately USD 55900)¹⁹ and imprisonment of up to 10 years; in the context of carbon markets, these penalties may apply only where entities fail to comply with climate reporting duties, provide false or misleading emissions information, or violate future carbon budget requirements. However, these provisions do not apply to carbon offset project developers or the operation of the , which remains governed by administrative rules without penalty clauses.²⁰

B. Credit Generation Standards

Eligible Activities:
A project is eligible only if it qualifies as an “approved project” registered under the Clean Development Mechanism,²¹ Verified Carbon Standard (VCS; Verra), Gold Standard, or another ministry-approved standard; is domestic; and relates to an activity that is not subject to the carbon tax. Pre-2019 projects are allowed only if they meet transitional verification and certification requirements.²²
Regulation 4 further excludes several project types from eligibility: renewable energy generation projects that exceed the 15 megawatts (MW) installed capacity threshold or that receive electricity tariffs above the ministerial threshold; projects already benefiting from government incentives such as the Section 12L energy-efficiency allowance; mitigation activities occurring within facilities subject to the carbon tax, including cogeneration, fuel switching, and on-site efficiency improvements; industrial gas destruction projects (HFC-23 and N₂O); nuclear energy projects; carbon capture and storage projects; and temporary certified emissions reductions.²³
Methodology Framework: This framework recognizes CDM, VCS (Verra), and Gold Standard methodologies for generation, with no reference to the Integrity Council for the Voluntary Carbon Market, International Organization for Standardization, or national crediting methodologies.²⁴
MRV Requirements: These requirements must undergo independent validation before registration and periodic third-party verification to confirm actual emission reductions, as per the approved standards: CDM, VCS (Verra), and Gold Standard. Accredited external verifiers check project design, baselines, monitoring plans, and reported results, and produce verification reports that are reviewed before credits can be listed in the COAS.²⁵
Registry System: The system requires all carbon used against the carbon tax to be listed and tracked in COAS, the official registry managed under the DMRE. Projects must be registered under an approved international standard (CDM, VCS, Gold Standard), and the credits must be canceled in the originating registry via voluntary cancellation agreements between COAS and the aforementioned international standards before they are listed in COAS.²⁶ The system records project details, ownership, transfers, and retirements, with a transaction log to prevent double counting and ensure transparency. Only credits uniquely identified and retired in COAS are eligible for compliance.²⁷

C. Integrity Principles

Additionality Tests: The regulation states that the intent is to prove that a carbon project is being implemented to reduce emissions in a manner that would not have occurred under a business-as-usual situation.²⁸
Permanence Safeguards: The regulation states that projects must have permanent effects through the long-term removal, reduction, or avoidance of carbon (or carbon dioxide equivalent) emissions. This applies to projects with the risk of reversibility, especially land-based projects, which can be exposed to fire and disease. The for permanence is not specified.²⁹
Quantification Standards: The closest criteria that fit the quantification standards are that emissions reductions or removals must be “real,” projects must develop or use available methodologies that ensure carbon emissions are measurable and quantifiable, and projects must account for uncertainty and leakage.³⁰
DoubleCounting Prevention: There are two provisions to prevent double counting: (1) Projects that generate carbon offset credits must occur outside the scope of activities that are subject to the carbon tax to ensure that the carbon reduction benefit has not already been counted;³¹ and (2) The carbon offset registry must facilitate the effective management of carbon offset credit records by ensuring that credits surrendered for compliance are retired, thus eliminating the possibility of double trading and double counting of credits either locally or internationally.³²

D. Sustainable Development

Co-benefits: The rules specify that eligible projects must not only reduce emissions but also deliver sustainable development benefits aligned with South Africa’s national priorities, such as job creation, rural development, health improvements, and biodiversity protection. Conversely, activities that produce few or no co-benefits are excluded; for example, industrial gas destruction projects were singled out as low value because they achieve emissions cuts without wider social or developmental gains.³³
Net-Zero Compatibility: Though not explicitly stated, this could be inferred through the Carbon Tax Act’s ineligible project list description, which includes industrial gas destruction projects such as HFC-23 and nitrous oxide destruction projects. In addition, projects that could potentially result in a double incentive will not be allowed: energy efficiency in company-owned or controlled operations that are covered by the carbon tax, and embedded or cogeneration of renewable energy for company-owned or controlled operations that are covered by the carbon tax. This includes parasitic electricity usage by fossil fuel–based power stations, fuel switch projects in company-owned or controlled operations that are covered by the carbon tax, and energy-efficient coal-fired power stations.³⁴

II. Demand-Side Regulations

South Africa’s demand for project-based carbon credits is shaped by the Carbon Tax Act and its accompanying offset regulations, which allow liable entities to use eligible to reduce a portion of their carbon tax liability. Under the approved regime, taxpayers may retire credits listed on the COAS to claim an offset allowance, creating the core compliance-driven demand signal for PCCM credits within the national system.³⁵ In principle, this structure positions the largest emitters—particularly in the power and industrial sectors—as the main purchasers of .³⁶

However, existing environmental-levy and fuel-levy provisions significantly suppress effective demand. Current legislation allows entities subject to these levies to neutralize their carbon tax exposure, which means they may not need to purchase even if they are formally covered by the tax. This is why Eskom, South Africa’s state-owned electricity utility, despite being technically liable, has not had to pay the carbon tax, and why effective demand from Sasol, a publicly listed petrochemicals and energy company that runs large coal-to-liquids and chemicals plants, has also been limited. Since these two entities account for the overwhelming majority of potential compliance demand, their exemptions materially affect overall market uptake.³⁷

A. Use Authorization Framework

Applications Allowed:
Voluntary claims: South Africa is actively developing its VCM, with the government advancing market reforms through the National Treasury’s consultation on modernizing the carbon credit market,³⁸ and the private sector is expanding trading infrastructure—most notably through the and Xpansiv’s launch of a voluntary carbon market platform that enables companies to buy and sell high-quality credits.³⁹ However, there are no policies currently informing the VCM.
Compliance integration: South Africa integrates carbon credits directly into its carbon tax system, where firms may use eligible domestic to reduce a portion of their tax liability. Under Phase 1 of the carbon tax (2019–2022, extended to the end of 2025), entities may use offsets for between 5 and 10 percent of their taxable emissions, depending on sector and activity. For Phase 2 (2026–2030), the draft Taxation Laws Amendment Bill proposes increasing these limits by five percentage points—to 15 percent for combustion emissions and 10 percent for industrial process and fugitive emissions—but these revised thresholds remain subject to parliamentary approval.⁴⁰
NDC alignment: A draft Article 6 Framework published for public comment in November 2024 sets out how the country intends to implement Article 6 of the Paris Agreement.⁴¹ The draft proposes establishing a single national registry under the Climate Change Act to serve as the central information repository for all Internationally Transferable Mitigation Outcomes (ITMOs) transactions and interoperate with the United Nations Framework Convention on Climate Change (UNFCCC) Article 6.4 registry and partner-country systems. The registry would function as a recording system—rather than a trading platform—for project- and credit-level authorizations and the issuance, transfer, retirement, and cancellation of carbon credits. It would distinguish between credits eligible for the domestic carbon tax (offsets) and those eligible for international transfer as ITMOs, and assign unique identifiers to ensure traceability and compliance with Article 6 requirements. South Africa has not yet concluded any bilateral Article 6.2 agreements.⁴²
Regulatory Status: The government’s formal rules on carbon credits are set out mainly through the Carbon Tax Act (2019) and associated Carbon Offset Regulations. These regulations focus heavily on the supply side, defining which projects are eligible and the operation of COAS. On the demand side, the rules are more limited: The Carbon Tax Act allows liable entities to use to reduce their tax liability, subject to percentage caps (5–10 percent in Phase 1, rising in Phase 2), provided the credits are domestic, listed, and retired in COAS. Beyond this, there is little detailed government guidance on the broader use of offsets, with voluntary and Article 6 arrangements remaining largely outside the current legal framework.
Oversight Bodies: Bodies that directly and indirectly oversee demand-side PCCM regulations are as follows:⁴³
NTdesigns the carbon tax (with consultations), sets exemptions and tax-free allowances, and designs environmental-related taxes such as the fuel levy. The NT provides overall policy direction for South Africa’s carbon pricing framework.
SARS administers the carbon tax and environmental-related taxes and implements the offset allowance provisions under the Carbon Tax Act, including offset use.
DFFEdesigns the Climate Change Act (with consultations) and leads the development of South Africa’s climate change response, including long-term mitigation planning.
DEE (formerly known as DMRE) administers the COAS, which is responsible for the listing, transfer, and retirement of carbon credits used to offset carbon tax liabilities. The DEE is currently exploring and will likely adopt a domestic certification standard under the Carbon Tax Act’s offset allowance.
PCC recommends South Africa’s nationally determined contribution.
Standards Integration: International meta-standards are not referenced; instead, eligibility is limited to projects certified under CDM, Gold Standard, and VCS (Verra),⁴⁴ with Article 6.4 eligibility standards expected to be added through future regulatory amendments but not yet incorporated into the offset framework.⁴⁵
Enforcement Mechanisms: No sanctions or penalties are specified. Consequences are limited to administrative rejection of applications, correction requests, or failure to list offsets.⁴⁶

B. Corporate Use Requirements

Mitigation Hierarchy: This is not explicitly mentioned in the regulations.
Scope Coverage: This is not explicitly mentioned in the regulations. However, offsets can only be used to reduce liability for Scope 1 emissions under the Carbon Tax Act and apply only to direct emissions (e.g., fugitive emissions).⁴⁷ This implies that credits cannot be applied to Scope 2 or Scope 3 emissions, and there is no phase-out plan expanding or limiting their use beyond Scope 1.
Quality Standards: The compliance framework sets five principles that apply to the supply-side criteria: real, reliable, additional, permanent, and sustainable development.⁴⁸
Accounting Treatment: Compliance offset accounting is handled through the COAS, which functions as the national registry for carbon tax offsets. COAS manages project registration, credit listing, transfers, and retirement (not “cancellation”), which is the official accounting entry used to demonstrate surrender of offsets for carbon tax reduction. SARS accepts only COAS-retired credits when assessing offset use under the Carbon Tax Act.⁴⁹

C. Transparency and Assurance

Public Reporting: There is no dedicated public reporting requirement for carbon credit use under either the compliance or voluntary systems. The Carbon Tax Act and Carbon Offset Regulations do not mandate companies to disclose the type or volume of they use, and the COAS is an internal, nonpublic registry, meaning offset listings, transfers, and retirements are not publicly accessible. Transparency instead comes indirectly through the international crediting standards allowed under the regime—CDM, Gold Standard, and Verra—which publish project documentation and issuance or retirement records on their own public registries.⁵⁰
Third-Party Verification: . ffset projects, however, must undergo independent third-party verification because eligible credits must come from CDM, Verra (VCS), or Gold Standard, all of which require validation and verification by accredited auditors. Projects also require an Extended Letter of Approval (ELoA) from the DMRE before credits can be listed in COAS. Once listed, credits may only be transferred or retired in the registry, and retirement is necessary for compliance use. Beyond this registry process, there is no requirement for additional third-party assurance of company-level claims.⁵¹
Science-Based Targets: There are no regulations requiring companies to set or disclose science-based targets or equivalent pathways as part of using offsets under the Carbon Tax Act or COAS.
Policy Advocacy: Compliance offset rules currently do not require alignment with Article 6. The Carbon Tax Act and Carbon Offset Regulations are entirely domestic mechanisms, and offset use under the carbon tax does not involve international transfers or Article 6 accounting. Article 6 considerations appear only in the draft Article 6 Framework, which outlines how future ITMO authorization and accounting would work.⁵²

D. Market Integrity Protection

Anti-Greenwashing: Rules on advertising and green claims apply broadly to environmental statements and do not single out carbon use. The Advertising Regulatory Board Code of Advertising Practice (appendix G) requires that environmental claims be accurate, clear, scientifically supported, and not misleading.⁵³ The Consumer Protection Act, 2008, also prohibits any false, misleading, or deceptive marketing, which includes environmental claims. ; companies using credits must therefore comply with general rules on truthful, substantiated environmental advertising.⁵⁴
Co-Benefits Delivery: The rules specify that eligible projects must not only reduce emissions but also deliver sustainable development benefits aligned with South Africa’s national priorities, such as job creation, rural development, health improvements, and biodiversity protection. Conversely, activities that produce few or no co-benefits are excluded; for example, industrial gas destruction projects were singled out as low value because they achieve emissions cuts without wider social or developmental gains.

III. Market-Side Regulations

South Africa hosts a growing set of voluntary carbon credit trading venues, including the JSE Ventures Carbon Market and the Green Asset Exchange, alongside OTC and broker-facilitated trading. While these platforms collectively support voluntary carbon market activity, the JSE-V Carbon Market is the primary exchange referenced in the National Treasury’s 2025 consultation paper and is therefore the focus of this analysis.⁵⁵

A. Infrastructure Framework

Market Structure: South Africa’s carbon credit market is undergoing a transition from a primarily OTC environment to an integrated model featuring formal self-regulating exchange trading. The Carbon Market launched its partnership with Xpansiv, a global spot exchange for environmental commodities, in February 2025, while the Green Asset Exchange announced its platform upgrade and partnership with Credible Carbon, a local voluntary registry, in January 2026.⁵⁶ The JSE-V Carbon (and other exchanges) enables the trading of voluntary credits, the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), and the South African COAS. It offers an order-book structure and settlement infrastructure connected to major international and local registries. The platform supports both exchange trading (transparent order book) and private OTC carbon credit trades, which can be settled through its registry-integrated infrastructure.⁵⁷
Registry Operations: Any used for carbon tax reduction must pass through the COAS, which serves as South Africa’s national compliance registry. COAS handles project approval and listing, requiring an ELoA from the DMRE—along with ownership transfers between account holders. Credits must be formally retired in COAS for the SARS to recognize them against carbon tax liability, and the system conducts documentation checks to confirm the validity, issuance, and eligibility of credits from CDM, Gold Standard, or Verra before they can be listed or retired.⁵⁸
Data Standards: Xpansiv’s data infrastructure is not governed by any mandatory data standard.⁵⁹ South Africa’s 2025 G20 presidency advanced work on the Common Carbon Credit Data Model (CCCDM), a voluntary, government-backed, G20-endorsed framework that standardizes core carbon credit data fields to improve transparency, interoperability, and traceability across registries. South Africa is exploring its relevance for strengthening domestic carbon market data systems.⁶⁰

B. Trading and Participation

Eligibility Rules: Participation in South Africa’s carbon credit trading market is self-regulated through the JSE-V Carbon platform and Xpansiv, which require trading participants to meet the exchange’s access conditions, open a verified real-name trading account, and comply with platform rules. The exchange does not publish detailed eligibility criteria for which carbon credit types can be traded, but its official description states that it supports transactions in “voluntary and compliance carbon credits—including COAS—and standardized VCM and CORSIA contracts.” Because the platform permits both voluntary and compliance-linked products and relies on integration with major international registries, it is unclear whether the JSE restricts trading only to credits meeting South Africa’s compliance criteria or whether it allows a wider range of international VCM credits. The system also supports settlement of bilateral OTC trades through its integrated post-trade infrastructure.⁶¹
Trading Mechanisms: Regulations do not impose statutory trading formats for carbon credits. Trading occurs through the JSE-V Carbon exchange, which provides a transparent order book for listing and executing trades, and also supports settlement of bilateral OTC transactions. The government does not mandate auction formats, contract standardization, or exchange-only trading. Instead, the market operates through a mix of exchange transactions, brokerage activity, and developer-buyer agreements.⁶²
Settlement Systems: Settlement of market transactions is conducted through the JSE-Xpansiv post-trade infrastructure, which is integrated with major international registries to enable credit delivery and payment settlement. After execution—either via the exchange order book or OTC—the credits are transferred to the buyer’s registry account for final settlement. For compliance use under the carbon tax, however, credits must ultimately be transferred into and retired in COAS, which serves as the authoritative accounting system for tax reduction; the JSE-Xpansiv settlement system does not replace COAS for compliance purposes.⁶³
Price Discovery: The JSE-V Carbon platform facilitates transparent price discovery through its order-book trading, where bids, offers, and executed prices are visible to market participants. OTC deals may be less transparent, but can still appear in Xpansiv’s aggregated market data products. The platform neither regulates carbon credit pricing nor imposes minimum or maximum price rules.
Oversight Authority: Carbon credit trading venues in South Africa are not regulated by a dedicated carbon market authority; no statutory authority sets trading venue rules, approves credit types for trading, or governs voluntary market conduct on exchanges. Instead, market oversight occurs through the following:⁶⁴
JSE-Xpansiv (and other similar exchanges), which administers trading rules and access requirements and sets standards on the platform;
NT, which identifies market infrastructure gaps and proposes future reforms in its carbon market consultation process;
DFFE, which governs international transfers under the draft Article 6 Framework but does not regulate domestic market trading; and
DEE, which administers COAS for compliance, but does not regulate exchange trading.
Legal : Current regulations do not explicitly define the legal status or accounting treatment of carbon credits. The NT consultation paper on developing carbon markets proposes reforms to clarify their intangible legal nature, explore classification as unlisted securities, and improve regulatory certainty for trading and accounting purposes.⁶⁵

C. Market Integrity Safeguards

Anti-Manipulation and Fraud Prevention: The JSE-V Carbon and Xpansiv platform applies its own internal conduct, surveillance, and participant access controls, but these are platform rules, not government-mandated safeguards. The NT consultation paper identifies the lack of a legal framework for market conduct, manipulation, and fraud prevention as a major market “pain point,” noting that clearer regulation may be introduced in future reforms.⁶⁶
Transparency and Reporting Requirements: South Africa does not have a dedicated transparency or reporting statute for carbon credit trading. Transparency is primarily ensured through registry-based processes rather than market-side disclosure rules.

D. Financial and Cross-Border Integration

Financial Regulation Integration: South Africa does not have a dedicated financial regulatory framework that governs carbon credit markets, and carbon credits are not defined as financial instruments under the Financial Markets Act. As a result, spot trading of carbon credits—voluntary or compliance eligible—is not regulated as a financial market activity. Exchanges such as the JSE-V Carbon platform operate under their own internal rules, but are not licensed as regulated market infrastructures for carbon credit trading.
Cross-Border Trading Framework: The cross-border carbon credit framework remains in development and will likely be structured around its implementation of Article 6 of the Paris Agreement. The draft Article 6 Framework, published for public comment in November 2024, outlines how South Africa intends to govern international transfers, including authorizing projects, applying corresponding adjustments, assigning unique ITMO identifiers, and ensuring alignment with the national greenhouse gas inventory and NDC. The draft framework proposes a national Article 6 registry that would track issuance, authorization, transfer, cancellation, and retirement of ITMOs, distinct from COAS (which handles domestic carbon tax offsets).⁶⁷ South Africa has not yet signed any bilateral Article 6.2 Implementation Agreements and, therefore, has no operational cross-border transfer mechanisms in place.

E. Regulatory Advancement Development Road Map

Infrastructure Plans: South Africa’s carbon market development efforts are currently focused on modernizing market infrastructure and registry architecture to support high-integrity trading of carbon credits. These proposed infrastructure improvements aim to create a more robust ecosystem for credit listing, transfer, and retirement, and to support cross-border liquidity and trading.⁶⁸ South Africa’s 2025 G20 presidency pushed forward work on CCCDM, a voluntary G20-endorsed framework that standardizes core carbon credit data fields to improve transparency, interoperability, and traceability across registries. As part of its future carbon market infrastructure planning, South Africa is exploring how elements of the CCCDM could support more consistent, high-integrity data practices in its domestic carbon offset system.⁶⁹

International Cooperation: As of January 2026, South Africa has not yet concluded any binding bilateral Article 6.2 Implementation Agreements with other countries, and the Article 6 framework remains under development.⁷⁰
Regulatory Evolution: The government consultation paper proposes legislative changes to clarify the legal and financial status of carbon credits, explore their recognition as tradable intangible assets, and adjust financial market regulation to support both exchange-based and bilateral trading. This reflects an incremental shift toward a more transparent and scalable market ecosystem, although formal, regulated derivatives, clearing, or cross-exchange carbon trading infrastructure are not yet established.⁷¹
Enforcement Enhancement: The carbon tax and offset regulations contain no market conduct, anti-manipulation, or fraud-prevention rules for trading platforms or voluntary participants, and the National Treasury consultation paper notes that future reforms will be needed to align market structures with financial market principles such as fair access, integrity, and robust settlement.⁷²

References

South African Revenue Service, “Gazetting of the Carbon Offsets Regulations in Terms of the Carbon Tax Act,” November 29, 2019, https://www.sars.gov.za/wp-content/uploads/Legal/SecLegis/LAPD-LSec-Carbon-Reg-2019-01a-Media-statement-Carbon-Tax-Act-Regulations.pdf. ↩
National Treasury (South Africa), “Draft Taxation Laws Amendment Bill, 2025,” 70–73, May 2025, https://www.treasury.gov.za/public%20comments/Tax%20Acts,%20Regulations%20and%20EMs/Draft%20Taxation%20Laws%20Amendment%20Bill%202025%20%2016%20August%202025%20.pdf. ↩
National Treasury (South Africa), Carbon Offset Administration System (COAS) Standard Operating Procedure, Version 0.9 (Final), March 2017, https://web.archive.org/web/20250422221945/https://carbon.energy.gov.za/Documents/Downloads.aspx. ↩
Xpansiv, “JSE-V Carbon,” accessed January 2026, https://www.xpansiv.com/trading-platforms/jsev-carbon. ↩
Green Asset Exchange, “Green Asset Exchange Partners with Credible Carbon,” accessed February 3, 2026, https://www.greenassetexchange.com/articles/green-asset-exchange-partners-with-credible-carbon. ↩
National Treasury (South Africa), “Developing the South African Carbon Credit Market,” consultation paper, October 29, 2025, https://www.treasury.gov.za/comm_media/press/2025/2025102901%20Media%20Statement%20-%20Consultation%20paper%20-%20Developing%20the%20South%20African%20Carbon%20Credit%20Market.pdf. ↩
Government of South Africa, “Regulations under Section 19 of the Carbon Tax Act, 2019 (Government Notice R.1556),” November 29, 2019, https://lawlibrary.org.za/akn/za/act/gn/2019/1556/eng@2024-05-03. ↩
South African Revenue Service, “Gazetting of the Carbon Offsets Regulations in Terms of the Carbon Tax Act,” December 2, 2019, https://www.sars.gov.za/wp-content/uploads/Legal/SecLegis/LAPD-LSec-Carbon-Reg-2019-01a-Media-statement-Carbon-Tax-Act-Regulations.pdf. ↩
Department of Mineral Resources and Energy (South Africa), Draft Framework for Approval of Domestic Standards for the South African Carbon Offsets Programme: For Public Comment, January 2022, https://www.dmre.gov.za/Portals/0/Energy_Website/files/esources/kyoto/2022/Draft-Framework-for-Approval-of-Domestic-Standards-for-Public-Comment.pdf. ↩
National Treasury (South Africa), Draft Framework for South Africa’s Participation in International Carbon Markets under Article 6 of the Paris Agreement, November 22, 2024, https://www.dffe.gov.za/index.php/node/5031. ↩
National Treasury (South Africa), “Developing the South African Carbon Credit Market,” consultation paper, October 29, 2025, https://www.treasury.gov.za/comm_media/press/2025/2025102901%20Media%20Statement%20-%20Consultation%20paper%20-%20Developing%20the%20South%20African%20Carbon%20Credit%20Market.pdf. ↩
Government of South Africa, “Carbon Tax Act, 2019 (Act No. 15 of 2019),” May 23, 2019, https://www.gov.za/sites/default/files/gcis_document/201905/4248323-5act15of2019carbontaxact.pdf. ↩
Government of South Africa, South Africa 2019 Carbon Offset Regulations under the Carbon Tax Act, 2019, November 29, 2019, https://web.archive.org/web/20250422221945/https://carbon.energy.gov.za/Documents/Downloads.aspx. ↩
National Treasury (South Africa), Draft Framework for South Africa’s Participation in International Carbon Markets under Article 6 of the Paris Agreement, November 22, 2024, https://www.dffe.gov.za/index.php/node/5031. ↩
National Treasury (South Africa), “Developing the South African Carbon Credit Market,” consultation paper, October 29, 2025, https://www.treasury.gov.za/comm_media/press/2025/2025102901%20Media%20Statement%20-%20Consultation%20paper%20-%20Developing%20the%20South%20African%20Carbon%20Credit%20Market.pdf. ↩
National Treasury (South Africa), Carbon Markets in South Africa, 27, October 29, 2025, https://www.treasury.gov.za/comm_media/press/2025/NT%20Carbon%20markets%20in%20South%20Africa.pdf. ↩
Government of South Africa, “Department of Mineral Resources and Energy (DMRE),” accessed January 28, 2026, https://nationalgovernment.co.za/units/management/429/department-of-mineral-resources-and-energy-dmre. ↩
Department of Energy (South Africa; now Department of Mineral Resources and Energy), Carbon Offset Administration System (COAS) Standard Operating Procedure, Version 0.9 (Final), 40–112, March 2017, https://web.archive.org/web/20250422221945/https://carbon.energy.gov.za/Documents/Downloads.aspx. ↩
ZAR amounts are converted per 1 USD using an exchange rate of 17.89, reflecting the average rate over the past twelve months from December 2025. ↩
Government of South Africa, “Climate Change Act, 2024 (Act No. 22 of 2024),” 46, July 4, 2024, https://www.gov.za/sites/default/files/gcis_document/202407/50966climatechangeact222024.pdf. ↩
South Africa has yet to issue a revision to its Carbon Offset Regulations to reflect the shift from the CDM to Article 6 of the Paris Agreement, although a draft Article 6 Framework is under development by the DFFE. ↩
Government of South Africa, South Africa 2019 Carbon Offset Regulations under the Carbon Tax Act, 2019, 8–9, November 29, 2019, https://web.archive.org/web/20250422221945/https://carbon.energy.gov.za/Documents/Downloads.aspx. ↩
Ibid., 9–10. ↩
Ibid., 5–6. ↩
Department of Energy (South Africa; now Department of Mineral Resources and Energy), Carbon Offset Administration System (COAS) Standard Operating Procedure, Version 0.9 (Final), 11, 110, March 2017, https://web.archive.org/web/20250422221945/https://carbon.energy.gov.za/Documents/Downloads.aspx. ↩
Department of Mineral Resources and Energy (South Africa). COAS Public Stakeholder Presentation by Promethium—Public Stakeholder Presentation, 27, https://www.dmre.gov.za/Portals/0/Energy_Website/files/COAS/COAS-Public-Stakeholder-Presentation-by-Promethium.pdf. ↩
Government of South Africa, South Africa 2019 Carbon Offset Regulations under the Carbon Tax Act, 2019, 10–11, November 29, 2019, https://web.archive.org/web/20250422221945/https://carbon.energy.gov.za/Documents/Downloads.aspx. ↩
Department of Energy (South Africa; now Department of Mineral Resources and Energy), Carbon Offset Administration System (COAS) Standard Operating Procedure, Version 0.9 (Final), 110, March 2017, https://web.archive.org/web/20250422221945/https://carbon.energy.gov.za/Documents/Downloads.aspx. ↩
Ibid., 111. ↩
Ibid., 110. ↩
Ibid., 103. ↩
Ibid., 113. ↩
Government of South Africa, South Africa 2019 Carbon Offset Regulations under the Carbon Tax Act, 2019, 9–11, November 29, 2019, https://web.archive.org/web/20250422221945/https://carbon.energy.gov.za/Documents/Downloads.aspx. ↩
Department of Energy (South Africa; now Department of Mineral Resources and Energy), Carbon Offset Administration System (COAS) Standard Operating Procedure, Version 0.9 (Final), 111, March 2017, https://web.archive.org/web/20250422221945/https://carbon.energy.gov.za/Documents/Downloads.aspx. ↩
Government of South Africa, “Carbon Tax Act, 2019 (Act No. 15 of 2019),” May 23, 2019, https://www.gov.za/sites/default/files/gcis_document/201905/4248323-5act15of2019carbontaxact.pdf; Government of South Africa, South Africa 2019 Carbon Offset Regulations under the Carbon Tax Act, 2019, November 29, 2019, https://web.archive.org/web/20250422221945/https://carbon.energy.gov.za/Documents/Downloads.aspx. ↩
Department of Forestry, Fisheries and the Environment (South Africa), National Greenhouse Gas Inventory Report 2000–2022, May 2, 2024, https://www.dffe.gov.za/sites/default/files/legislations/unfccc_greenhousegasinventoryreport9_g50607gon4772.pdf. ↩
Duane Newman, “A Beginner’s Guide to Carbon Taxes,” Discovery Green, Discovery, accessed January 28, 2026, https://www.discovery.co.za/business/discovery-green-beginners-guide-carbon-taxes. ↩
National Treasury (South Africa), “Developing the South African Carbon Credit Market,” October 29, 2025, https://www.treasury.gov.za/comm_media/press/2025/2025102901%20Media%20Statement%20-%20Consultation%20paper%20-%20Developing%20the%20South%20African%20Carbon%20Credit%20Market.pdf. ↩
Xpansiv, “JSE-V Carbon,” accessed January 2026, https://www.xpansiv.com/trading-platforms/jsev-carbon. ↩
National Treasury (South Africa), “Draft Taxation Laws Amendment Bill, 2025,” 70–73, May 2025, https://www.treasury.gov.za/publications/other/Draft%20Taxation%20Laws%20Amendment%20Bill%202025.pdf. ↩
Department of Forestry, Fisheries and the Environment (South Africa), “Draft Article 6 Framework for the Republic of South Africa under the Paris Agreement,” November 2024, https://www.dffe.gov.za/sites/default/files/legislations/publication_draftarticle6frameworkforrsa_parisagreement_g51637gon5570.pdf. ↩
National Treasury (South Africa), “Developing the South African Carbon Credit Market,” October 29, 2025, https://www.treasury.gov.za/comm_media/press/2025/2025102901%20Media%20Statement%20-%20Consultation%20paper%20-%20Developing%20the%20South%20African%20Carbon%20Credit%20Market.pdf. ↩
Ibid., 27. ↩
Department of Energy (South Africa; now Department of Mineral Resources and Energy), Carbon Offset Administration System (COAS) Standard Operating Procedure, Version 0.9 (Final), 5, March 2017, https://web.archive.org/web/20250422221945/https://carbon.energy.gov.za/Documents/Downloads.aspx. ↩
Department of Forestry, Fisheries and the Environment (South Africa), “Draft Article 6 Framework for the Republic of South Africa under the Paris Agreement,” November 2024, https://www.dffe.gov.za/sites/default/files/legislations/publication_draftarticle6frameworkforrsa_parisagreement_g51637gon5570.pdf. ↩
Department of Energy (South Africa; now Department of Mineral Resources and Energy), Carbon Offset Administration System (COAS) Standard Operating Procedure, Version 0.9 (Final), 40–112, March 2017, https://web.archive.org/web/20250422221945/https://carbon.energy.gov.za/Documents/Downloads.aspx. ↩
Government of South Africa, “President Cyril Ramaphosa Signs 2019 Carbon Tax Act into Law,” May 26, 2019, https://www.gov.za/news/media-statements/president-cyril-ramaphosa-signs-2019-carbon-tax-act-law-26-may-2019. ↩
Department of Energy (South Africa; now Department of Mineral Resources and Energy), Carbon Offset Administration System (COAS) Standard Operating Procedure, Version 0.9 (Final), 110–111, March 2017, https://web.archive.org/web/20250422221945/https://carbon.energy.gov.za/Documents/Downloads.aspx. ↩
Ibid., 15–20. ↩
Ibid. ↩
Ibid. ↩
Department of Forestry, Fisheries and the Environment (South Africa), “Draft Article 6 Framework for the Republic of South Africa under the Paris Agreement,” November 2024, https://www.dffe.gov.za/sites/default/files/legislations/publication_draftarticle6frameworkforrsa_parisagreement_g51637gon5570.pdf. ↩
Advertising Regulatory Board (South Africa), Appendix G: Advertising Containing Environmental Claims, November 1, 2018, https://www.arb.org.za/assets/lappendix-g_environmental.pdf. ↩
Government of South Africa, “Consumer Protection Act 68 of 2008,” April 29, 2009, https://www.gov.za/documents/consumer-protection-act. ↩
National Treasury (South Africa), “Developing the South African Carbon Credit Market,” 35, 37, October 29, 2025, https://www.treasury.gov.za/comm_media/press/2025/2025102901%20Media%20Statement%20-%20Consultation%20paper%20-%20Developing%20the%20South%20African%20Carbon%20Credit%20Market.pdf. ↩
Xpansiv, “JSE-VCarbon,” accessed January 2026, https://www.xpansiv.com/trading-platforms/jsev-carbon; Green Asset Exchange, “Green Asset Exchange Partners with Credible Carbon,” accessed February 3, 2026, https://www.greenassetexchange.com/articles/green-asset-exchange-partners-with-credible-carbon. ↩
Xpansiv, “JSE-V Carbon,” accessed January 10, 2026, https://www.xpansiv.com/trading-platforms/jsev-carbon. ↩
Department of Energy (South Africa; now Department of Mineral Resources and Energy), Carbon Offset Administration System (COAS) Standard Operating Procedure, Version 0.9 (Final), 112–113, March 2017, https://web.archive.org/web/20250422221945/https://carbon.energy.gov.za/Documents/Downloads.aspx. ↩
Xpansiv, “Xpansiv Data,” accessed January 10, 2026, https://www.xpansiv.com/data. ↩
National Treasury (South Africa), 4th Financial Markets Consultative Body Group (FMCBG) Chair’s Summary, October 15–16, 2025, https://www.treasury.gov.za/comm_media/press/2025/4th%20FMCBG%20Chairs%20Summary.pdf; Climate Data Steering Committee, “Data Standardization,” accessed January 28, 2026, https://www.climatedatasc.org/data-standardization/. ↩
Xpansiv, “JSE-V Carbon,” accessed January 10, 2026, https://www.xpansiv.com/trading-platforms/jsev-carbon. ↩
Ibid. ↩
Ibid.; Department of Energy (South Africa; now Department of Mineral Resources and Energy), Carbon Offset Administration System (COAS) Standard Operating Procedure, Version 0.9 (Final), 112–113, March 2017, https://web.archive.org/web/20250422221945/https://carbon.energy.gov.za/Documents/Downloads.aspx. ↩
National Treasury (South Africa), Carbon Markets in South Africa, 27, October 29, 2025, https://www.treasury.gov.za/comm_media/press/2025/NT%20Carbon%20markets%20in%20South%20Africa.pdf. ↩
Ibid., 8. ↩
Ibid. ↩
National Treasury (South Africa), Draft Framework for South Africa’s Participation in International Carbon Markets under Article 6 of the Paris Agreement, November 22, 2024, https://www.dffe.gov.za/index.php/node/5031. ↩
National Treasury (South Africa), Carbon Markets in South Africa, 6–7, 16, October 29, 2025, https://www.treasury.gov.za/comm_media/press/2025/NT%20Carbon%20markets%20in%20South%20Africa.pdf. ↩
National Treasury (South Africa), 4th Financial Markets Consultative Body Group (FMCBG) Chair’s Summary, October 15–16, 2025, https://www.treasury.gov.za/comm_media/press/2025/4th%20FMCBG%20Chairs%20Summary.pdf; Climate Data Steering Committee, “Data Standardization,” accessed January 28, 2026, https://www.climatedatasc.org/data-standardization/. ↩
National Treasury (South Africa), Carbon Markets in South Africa, 8, October 29, 2025, https://www.treasury.gov.za/comm_media/press/2025/NT%20Carbon%20markets%20in%20South%20Africa.pdf; National Treasury (South Africa), Draft Framework for South Africa’s Participation in International Carbon Markets under Article 6 of the Paris Agreement, November 22, 2024, https://www.dffe.gov.za/index.php/node/5031. ↩
National Treasury (South Africa), Carbon Markets in South Africa, 8–10, October 29, 2025, https://www.treasury.gov.za/comm_media/press/2025/NT%20Carbon%20markets%20in%20South%20Africa.pdf. ↩
Ibid. ↩