Energy Savings in Agriculture: EU Experiences to Support South Africa’s Ambitions

The agricultural sector’s importance to the South African economy has been highlighted in recent years; it was the -. And while the sector’s contribution to annual GDP is relatively modest, it rises to 12%, when combined with agro-processing, agriculture importantly provides much needed labour-intensive low skill opportunities – acknowledged in the National Development Plan 2030, which set targets of approximately one million additional direct and indirect jobs in agriculture and agro-processing.

The agricultural sector is also a consistent generator of foreign exchange earnings; with annual agriculture exports having reached peaks of $10 billion. The European Union (EU) now accounts for over 25% of South Africa’s agricultural exports; making it South Africa’s second largest destination, and one of South Africa’s fastest growing agricultural export markets.

Both South Africa and EU Member States are signatories of the Paris Climate Agreement and accept that energy transition is inevitable – including the imminent formal global adoption of a net zero emission target date of no later than 2050. Indeed, the EU is already transitioning to a low-carbon economy; with the EU Commission planning to reduce GHG emissions by at least 55% by 2030. This points to the probable introduction of border carbon adjustment mechanisms, such as surcharges for non-carbon neutral imports; or even exclusions of imports from countries uninvested in green energy and green production. It makes South African agriculture production, which currently posts higher than global average energy intensity levels, particularly vulnerable.

Theo Covary
August 2021