Sasol Limited (Sasol) today announced its updated strategy that commits it to be at net zero emissions by 2050. This is in line with Sasol's commitment to accelerate its transition to a low carbon world in support of the objectives of the Paris Agreement. In aligning with its 2050 ambition, Sasol has stepped up its 2030 scope 1 and 2 greenhouse gas (GHG) emission reduction target, from an initial 10% for its South African operations, announced last year, to 30% for its Energy and Chemicals businesses, off a 2017 baseline. The company is also introducing a scope 3 reduction target, for its Energy Business, off a 2019 baseline. This is consistent with what its peers have committed to. "Based on detailed assessments and modelling, our 2030 target can be delivered without divestments and offsets, but through the direct decarbonisation of our existing assets," said Fleetwood Grobler, President and Chief Executive Officer of Sasol. "This will be done through a mix of energy and process efficiencies, investments in renewables and a shift to incremental natural gas as a transition feedstock for our Southern African value chain. These solutions are well known and mostly under our control, and the investments required are cost-effective, preserving strong returns in our business, above the cost of capital." Beyond 2030, Sasol has more than one viable pathway to get to its net zero ambition by 2050, with different options to transform its Southern Africa value chain by progressively shifting its feedstock away from coal, towards more transition gas, and then, green hydrogen and sustainable carbon over the longer term, as economics improve for these options. "In an uncertain future, this approach offers agility and enables us to pivot as cost effective mitigation levers become available. We are also avoiding infrastructure lock-in and regret capital spend," said Grobler. Sasol's proprietary Fischer-Tropsch (FT) technology, in particular, is well suited to play a meaningful role, in a low carbon future, with attractive new and emerging value pools. "Against this backdrop, we are setting up a new business, Sasol ecoFT, with the intent to build on our technology leadership, to establish a significant market position internationally. One of the first applications for the technology is likely to be sustainable aviation fuels (SAF), where new regulations are driving demand and existing technology and feedstocks, have limitations that FT can address." A just transition As global economies transform their energy systems, this will disrupt industry, shift value pools and job markets, and require diverse skills and capabilities in different geographies. Sasol will progress a just transition across its geographical footprint, with the aim of protecting and fostering employment opportunities by accelerating the development of new energy value pools. South Africa in particular, holds significant promise for renewables and low-cost green hydrogen production for own use and export opportunities. This will require national plans to be established by industry stakeholder and government to develop opportunities, maximise localisation opportunities to create jobs and economic wealth. "While the workforce impact is likely to be after 2030 – this needs to be anticipated now, with the right long term human capital plans – managing a natural transition of people involved in fossil fuels related activities and investing in reskilling for the needs of a low carbon economy in the future," said Grobler. Future Sasol's businesses Sasol's Energy business is positioned to lead the energy transition in Southern Africa through its advantaged asset base with a cash breakeven oil price below US$35 dollars per barrel. As one of the world's largest producers of grey hydrogen, Sasol aims to leverage this expertise to decarbonise through lower carbon feedstocks and increase production of cost-competitive sustainable fuels and energy. Chemicals will pursue growth opportunities through its unique chemistry, specifically in FT and Ziegler-Alumina-Guerbet technologies. With its Lake Charles plants now fully operational, Sasol has clear pathways to generate attractive cash flows, as capacity ramps up. It will accelerate growth in more specialty solutions and sustainable chemicals, particularly Essential Care Chemicals and Advanced Materials, where Sasol already has leading market positions. Sasol ecoFT, will focus on building new sustainable businesses by leveraging FT technology. Currently, FT uses fossil-fuel based sources of hydrogen and carbon. This technology has the potential to use green hydrogen and sustainable sources of carbon feedstock, such as biomass, carbon captured from carbon intensive processes and eventually direct air capture. "Our FT technology, at the heart of our Southern Africa value chain, positions us well, to decarbonise through lower carbon feedstocks and to ramp-up the production of cost competitive sustainable fuels and chemicals," said Grobler. Self-funding the transition, while delivering sustainable returns Sasol's refocused strategy is underpinned by a financial framework that will enable the company to grow shared value, while accelerating its transition, as sustainable and resilient dividends are restored to our shareholders. "Through our clear and updated capital allocation framework and governance structure, we will ensure effective and efficient decision making to navigate all the capital decisions we face in delivering Future Sasol," said Paul Victor, Group Chief Financial Officer of Sasol. In the short to medium term, the first phase up to 2025 will see Sasol strengthen its balance sheet, while improving cost-competitiveness and ability to increase cash flow generation in a low oil price scenario. Sasol targets to improve return on invested capital (ROIC) to between 12 and 15% in this period. The second phase in the short to medium term up to 2030 prioritises the balance between returns and investing in Sasol's transition plan. In this period up to 2030, Sasol plans to invest between R20 to R25 billion per annum to maintain its asset base, comply with all relevant environmental and air quality regulations, as well as fund the transition to reach the 30% GHG emissions reduction target. This includes a total of R15 to R25 billion in aggregate transformation capital up to 2030, while targeted ROIC is anticipated to be above 15%. "The overall Sasol group return profile will continue to improve significantly and remains attractive – there is a clear pathway through to higher returns while we achieve our climate change objectives," added Victor. Dividends will be resumed once key triggers are reached and there is confidence that these returns delivered to shareholders are sustainable based on the prevailing outlook at that time. The minimum pay-out of 2,8 times or 36% of Core Headline Earnings Per Share (CHEPS) will be triggered when a leverage ratio of 1,5 times Net Debt to EBITDA is reached and the absolute debt level is below US$5 billion. The step-up to 2,5 times or 40% of Core HEPS will follow when absolute net debt levels reduce to below US$4 billion. The regular dividend will be maintained in this range. Issued by: Matebello Motloung, Manager: Group Media Relations Direct telephone: +27 (0) 10 344 9256; Mobile: +27 (0) 82 773 9457 matebello.motloung@sasol.com About Sasol: Sasol is a global chemicals and energy company. We harness our knowledge and expertise to integrate sophisticated technologies and processes into world-scale operating facilities. We safely and sustainably source, produce and market a range of high-quality products in 27 countries, creating value for stakeholders. Our Purpose 'Innovating for a better world' compels us to deliver on the triple bottom line outcomes of People, Planet and Profit, responsibly and always with the intent to be a force for good. We have prioritised four Sustainable Development Goals to ensure our business is environmentally, socially and economically sustainable. 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