Sasol Ltd., a South African energy and chemicals firm, is gaining attention. They reported stronger earnings and are shifting their strategy to buy more carbon credits. The move comes as the company, the second-biggest emitter of greenhouse gases in the region, boosts coal production and grows its renewable energy portfolio.
Investors, regulators, and climate observers are watching closely to see how Sasol balances its reliance on fossil fuels with its stated commitment to reaching net-zero emissions.
Earnings Power: Fueling a Dual Strategy
In its latest earnings report, Sasol posted a year-on-year improvement supported by stable product prices and efficiency gains. The company’s operating profit rose due to stronger chemical sales.
However, this was partly offset by higher costs in its coal division. Earnings were strong, giving Sasol the money to invest in fossil fuels and low-carbon projects.
For the fiscal year ending June 30, the company earned 10.60 rand per share. This is a turnaround from a loss of 69.94 rand per share. Asset write-downs fell sharply to 20.7 billion rand, down from 74.9 billion rand last year.
Sasol gained from a 4.3 billion rand settlement with Transnet over oil transport fees. Capital expenditure dropped 16% to 25.4 billion rand. This helped improve the company’s financial profile.
Management highlighted that a resilient balance sheet is critical as the company continues its transition journey.
Sasol has steady cash flows. This helps support its short-term coal operations. It also funds longer-term projects like renewable energy growth and carbon reduction efforts.
Sasol’s renewed profit helped lift investor sentiment. Following the earnings, the company’s shares climbed 7% in pre-market trading. Its stock on the Johannesburg Stock Exchange (JSE: SOL) surged by 44% over the last quarter.
Analysts predict that earnings per share will increase by 20% year-on-year. This shows rising confidence in the company’s ability to balance profit and sustainability.
Rising Carbon Credit Purchases: Flexibility or Delay?
One of the biggest headlines is Sasol’s decision to boost its purchase of carbon credits.
- In the fiscal year that ended in June 2025, Sasol’s carbon credit purchases increased to R723 million, a 25% increase year-on-year.
- This amount was nearly triple the value of the credits it bought in 2023.
- Since 2019, Sasol has acquired more than 11 million South African carbon credits, which has reduced its carbon tax liability by more than R650 million.
Most of these credits come from international renewable energy and reforestation projects, while some are linked to African-based carbon offset programs. Sasol plans to grow its carbon credit portfolio, showing its commitment to climate responsibility.
- Wonderbag: In 2021, Sasol announced it would use carbon credits generated by the Wonderbag project, which provides non-electric heat-retention cookers to reduce household emissions.
- Bethlehem Hydro: In 2020, Sasol purchased over 100,000 credits from Bethlehem Hydro, a 7MW hydropower plant that was the first Independent Power Producer in South Africa.
- Nitrous oxide abatement: As far back as 2007, Sasol received credits for a nitrous oxide abatement project at its nitric acid plants in Sasolburg and Secunda.
However, it recognizes that cutting emissions from its own operations is tough in the near term. The company plans to steadily increase reliance, but acknowledges that credits are a temporary solution.
The use of credits has generated debate. Supporters say it gives companies flexibility to meet interim targets while low-carbon technologies scale.
Critics argue it can delay direct emissions cuts. Sasol’s growing use of offsets shows the urgent climate pressures and the challenges of moving away from coal.
Coal’s Grip: South Africa’s Energy Dilemma
Sasol is one of South Africa’s top coal users. It relies on coal for power and to make synthetic fuels and chemicals. Its Secunda plant is one of the single largest point sources of carbon dioxide globally, emitting more than 56 million tons of CO₂ equivalent each year.
The world’s biggest producer of fuels and chemicals from coal emits around 63 million tons of CO₂ equivalent each year. This makes it one of Africa’s largest industrial polluters.
The company believes coal is still essential for South Africa’s energy and industry right now. This is especially true due to the country’s electricity shortages and its dependence on Eskom, the state utility. Sasol knows that relying on this can lead to risks such as regulatory pressure, investor scrutiny, and possible costs from future carbon pricing.
Counting Carbon: Sasol’s Net-Zero Targets and Progress
Despite its coal footprint, Sasol has stepped up efforts to diversify its energy mix. The company is putting money into renewable energy projects. This includes solar and wind farms. These efforts will help provide cleaner electricity for its operations.
Moreover, partnerships with independent power producers are helping Sasol shift portions of its energy use away from coal-generated power.
In addition, Sasol is advancing work in green hydrogen and sustainable aviation fuel (SAF). Its Fischer-Tropsch technology, long used for coal-to-liquids production, is being adapted for cleaner feedstocks, such as natural gas and green hydrogen. The company announced pilot projects to produce low-carbon chemicals for local and global markets.
Sasol aims to cut its Scope 1 and 2 emissions by 30% by 2030. This goal uses a 2017 baseline, which is about 72 million tons of CO₂e. Progress: current emissions are down about 13% from baseline.
It aims for net-zero emissions by 2050. However, it admits that success relies on policy support, technological progress, and available funding.
In summary, Sasol’s key emission reduction initiatives are:
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Green hydrogen projects – Developing hydrogen production in South Africa through partnerships to support cleaner fuels and power.
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Renewable energy procurement – Securing up to 1,200 MW of renewable electricity (wind and solar) to replace coal-based power at operations.
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Energy efficiency improvements – Implementing process optimization and equipment upgrades to reduce energy use across its facilities.
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Coal-to-gas transition – Shifting part of its feedstock mix from coal toward natural gas, which has a lower carbon footprint.
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Carbon capture and utilization (CCU) – Exploring technologies to capture CO₂ from operations for use in chemicals or fuels.
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Sustainable aviation fuel (SAF) development – Advancing projects to produce low-carbon jet fuel from sustainable feedstocks.
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Offsets and carbon credits – Expanding purchases of carbon credits to compensate for hard-to-abate emissions.
Markets in Motion: Offsets, Renewables, and Risks
Sasol’s strategy reflects broader challenges facing energy and industrial companies worldwide. Carbon credits are gaining popularity. The voluntary carbon market was worth over $2 billion in 2024. It’s expected to grow to nearly $50 billion by 2030, under the best-case scenario.
However, the credibility of offsets is under scrutiny, and investors are demanding more transparency on how credits are used.
At the same time, global coal demand remains strong, particularly in emerging markets. South Africa’s energy system still relies heavily on coal, which generates about 80% of the country’s electricity. This makes decarbonization complex, as companies like Sasol must balance energy security with climate commitments.
Meanwhile, renewable energy costs continue to fall. According to the International Renewable Energy Agency (IRENA), solar and wind are now the cheapest forms of new power generation in most regions. For Sasol, scaling renewables not only helps reduce emissions but also lowers long-term energy costs.
Balancing Growth, Risk, and Climate Goals
Sasol’s higher earnings give it the financial strength to follow its dual-track strategy. This means it can keep expanding coal operations and invest in low-carbon solutions. The company’s growing purchase of carbon credits shows its urgent need to meet climate goals. It also reflects the challenge of cutting emissions from coal-heavy operations.
Sasol’s future will depend on whether it can scale up renewable energy, develop viable low-carbon technologies, and manage the risks tied to its coal reliance. Its net-zero commitment remains a long-term goal. Yet, the company’s latest moves suggest it is trying to walk a fine line between financial performance and climate responsibility.
The post Sasol’s (SSL) Stock Rises on Profits, Carbon Credit Surge, and Net-Zero Push appeared first on Carbon Credits.
The accounting differences that decide whether your nature investment shows up in inventory, in BVCM, or nowhere at all.
The question reaches a procurement team about three weeks before the next sustainability committee meeting. Someone has read about insetting. Someone else has just signed off on an offset purchase. The CSO wants to know if the two are interchangeable. The answer is no, and the GHG Protocol Land Sector and Removals Standard is the reason why.
This article walks through what each term means at audit-grade specificity, what the standards actually say about how each gets counted, and how to decide which tool fits which target. The insetting vs offsetting question is one of the most-searched in corporate climate strategy, and one of the most poorly answered. By the end of this piece, you should be able to brief a committee on the difference without notes.
The two definitions, in plain English
Offsetting means buying carbon credits generated outside your value chain and retiring them against your residual emissions. The reduction happens somewhere else, financed by you, and the credit is the receipt.
Insetting means investing in emission reductions or removals inside your own value chain, typically with suppliers, where the reduction is directly linked to the products and services you buy. The reduction happens inside the boundary of your Scope 3 inventory, and the accounting treatment is fundamentally different.
The shorthand from the University of Oxford’s Nature-based Insetting Initiative is useful: insetting is what you do with the supply chain you have; offsetting is what you do with the supply chain you do not have.
What the GHG Protocol Land Sector Standard actually says
The GHG Protocol Land Sector and Removals Standard, finalised in 2024 after a multi-year pilot, sets the rules for how land-based emission reductions and removals enter corporate inventories. The Standard distinguishes between inventory accounting (Scope 1, 2, and 3) and project or intervention accounting (a separate methodology for crediting).
For insetting, the practical implication is that supplier-level interventions, when properly measured and attributed, can reduce your Scope 3 category 1 (purchased goods and services) emissions in your inventory. The reduction is not a credit retired against the inventory; it is a lower inventory number, period.
For offsetting, the credit is retired separately. It can be reported as a contribution toward a net-zero claim under the SBTi Beyond Value Chain Mitigation framework or as part of a VCMI Carbon Integrity claim, but it does not lower the inventory number.
A practical consequence: if your Science Based Target requires a 50% absolute reduction in Scope 3 emissions by 2030, insetting moves you toward the target. Offsetting does not. This single point of difference reshapes the procurement decision.
When insetting counts toward Scope 3 (and when it does not)
Insetting counts toward Scope 3 only when several conditions are met:
- The intervention must occur with an entity in your value chain.
- The emissions reduction or removal must be measured against a defensible baseline.
- The reduction must be attributed to your share of that supplier’s output, not double-counted with other buyers.
- It must follow the inventory accounting rules in the GHG Protocol Land Sector Standard, not the project accounting rules used to generate credits.
The most common failure mode is double counting. If your supplier sells the same reduction as a credit on the voluntary market and also reports it to you as a Scope 3 reduction, the math breaks. The Standard requires you to address this risk, typically by purchasing and retiring the supplier-issued credit as part of your inventory or by contractual provisions that prevent the supplier from selling the reduction twice.
When insetting does not count toward Scope 3: when the intervention sits with a supplier you do not buy from, when the baseline is not defensible, when the attribution is unclear, or when the documentation does not survive audit. Those cases default to Beyond Value Chain Mitigation, which is still useful but operates on a different ledger.
The procurement and supplier engagement question
Insetting is harder than offsetting. That is the unfashionable truth most buyers eventually confront. Offsetting is a transaction; insetting is a relationship.
To run an insetting program, you need supplier mapping precise enough to know which farms or facilities sit at which Scope 3 boundary. You need an engagement model that gets suppliers to participate, which usually requires multi-year commitments and shared economics. You need an MRV architecture that measures the right things and produces audit-ready documentation. And you need a contractual structure that prevents double counting and protects both sides.
The trade-off you receive in return is significant. Reductions count against your inventory rather than your residual. Supplier relationships deepen, which protects sourcing continuity. Yield and quality improvements often follow regenerative interventions, which reduces your input cost over time. And the regulatory file, under CSRD, CSDDD, EUDR, and the SBTi FLAG Guidance, is materially stronger.
Choosing the right tool for the right target
A practical decision rule. If your target is a science-based Scope 3 reduction and you operate in a FLAG sector or source FLAG commodities, insetting is the structurally correct tool. If your target is a net-zero claim that includes neutralising hard-to-abate residual emissions outside your value chain, BVCM via high-integrity offsets is the structurally correct tool. Most companies with material Scope 3 exposure need both, in different proportions, sequenced over time.
The sequencing matters. Insetting takes longer to stand up but produces a permanent reduction in the inventory. Offsetting can be transacted faster but does not change the inventory and now sits under tighter claim restrictions. Treat them as complementary tools with different jobs, not as substitutes. The Accountability Framework Initiative and the IUCN Global Standard for Nature-based Solutions both provide useful guardrails for the insetting side, with biodiversity, human rights, and benefit-sharing requirements that go beyond carbon math.
If you are mapping a Scope 3 reduction roadmap and need to scope which interventions count toward your inventory versus which sit in Beyond Value Chain Mitigation, the carbon and sustainability experts at Carbon Credit Capital can help you structure a nature-based supply chain investment program that fits your FLAG exposure, your target architecture, and your audit horizon. Schedule a consultation.
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