Carbon Tax on Diesel in SA: What Fleets Really Pay

Published: 30 October 2026

Carbon tax on diesel in South Africa is something almost every transport, mining and plant hire fleet already pays, but very few fleets ever file a carbon tax return. The reason is simple: for road transport, the tax is collected through the carbon fuel levy that sits inside the pump price. From 1 April 2026 that levy is 23 cents per litre of diesel. You pay it with every fill, whether you buy at a forecourt or take bulk deliveries into a depot tank.

That changes what "managing carbon tax" means for a fleet. There is no SARS return to prepare for your trucks, but there is a real and rising cost per litre, and there is growing pressure from mines, shippers and retailers who want to know the emissions behind the freight they buy. This guide explains how the levy works, what the current rates are, when a business is directly liable under the Carbon Tax Act, and how to turn your fuel records into an emissions figure your customers will accept.

How Is Carbon Tax Charged on Diesel in South Africa?

The Carbon Tax Act, 2019 came into effect on 1 June 2019. It places a tax on greenhouse gas emissions from activities listed in Schedule 2 of the Act, and SARS administers it as an environmental levy under the Customs and Excise Act.

Road transport is treated differently from factories and power stations. In Schedule 2, road transportation (IPCC code 1A3b) has no emissions threshold. Instead of asking every truck owner to measure and report emissions, government collects the tax upstream on the fuel itself. The carbon fuel levy is added to petrol and diesel alongside the general fuel levy and the Road Accident Fund levy, and the fuel industry pays it over to SARS. The cost then flows through to you in the regulated and wholesale fuel price.

In practice this means:

• You do not register with SARS for carbon tax because you run trucks.
• You cannot claim carbon tax allowances or offsets against your fleet's fuel use, because you are not the taxpayer.
• Your carbon tax cost is simply litres bought multiplied by the levy in force on the date of purchase.

Note that the levy per litre is far lower than the headline rate multiplied by the carbon content of a litre of diesel. Schedule 2 gives road transport a large basic tax-free allowance, and the levy broadly reflects the tax after that allowance.

What Are the Current Carbon Tax and Carbon Fuel Levy Rates?

Two numbers matter, and they are often confused. The headline carbon tax rate applies per tonne of CO2 equivalent to directly liable emitters. The carbon fuel levy applies per litre of fuel.

| Item | Previous rate | Current rate | Effective date |
|------|---------------|--------------|----------------|
| Headline carbon tax rate | R236 per tonne CO2e | R308 per tonne CO2e | 1 January 2026 |
| Carbon fuel levy, diesel | 17c per litre | 23c per litre | 1 April 2026 |
| Carbon fuel levy, petrol | 14c per litre | 19c per litre | 1 April 2026 |

These changes were announced in the 2026 Budget on 25 February 2026 and implemented by SARS tariff amendments to Schedule No. 1 of the Customs and Excise Act.

What happens after 2026?

The first phase of the carbon tax ran until 31 December 2025. In the 2022 Budget, Treasury set out a policy path for the second phase: a rate equivalent to about US$20 per tonne in 2026, rising to US$30 per tonne by 2030, with steeper increases intended after that. The rand rate for each year is confirmed in the annual Budget and tariff amendments, not fixed in advance in rand. The jump to R308 from 1 January 2026 is consistent with that path.

For a fleet, the practical point is direction, not precise forecasting. Both the headline rate and the carbon fuel levy are designed to rise every year, and the diesel levy has risen from 17c to 23c in one year. Build an annual increase into your rate cards and fuel escalation clauses rather than treating the levy as a fixed cost.

How Much Carbon Tax Does a Fleet Pay Through Its Diesel?

The calculation is straightforward because it is per litre. Take your litres for the period and multiply by the levy that applied when the fuel was bought.

Illustrative example (round numbers, not a benchmark):

| Fleet input | Value |
|-------------|-------|
| Trucks | 20 |
| Diesel per truck per year | 50,000 litres |
| Fleet diesel per year | 1,000,000 litres |
| Carbon fuel levy at 23c per litre | R230,000 per year |
| Same litres at last year's 17c | R170,000 per year |

On that example the carbon fuel levy alone adds R60,000 a year compared with the previous rate, before any change in the general fuel levy or the basic fuel price. On its own the levy is a small slice of the pump price, but it is one more line that rises every year and that rarely appears in a quote.

If you run a mining or agricultural operation, check separately how the diesel refund applies to your eligible off-road use. Our diesel refund guide explains the scheme, and you should confirm with SARS or your tax adviser exactly which levy components your refund covers.

When Is a Business Directly Liable for Carbon Tax?

Direct liability arises when a person conducts an activity listed in Schedule 2 of the Carbon Tax Act above the threshold for that activity. Those businesses must licence each emitting facility with SARS, submit an annual DA 180 environmental levy account for the calendar-year tax period, and pay the tax. They can claim the allowances in Schedule 2, which reduce the effective rate.

Examples of thresholds in Schedule 2 include:

• Stationary fuel combustion in energy and manufacturing activities: 10 MW(th) of installed thermal capacity.
• Domestic aviation, railways and water-borne navigation: 100,000 litres of fuel a year.
• Road transportation and other transportation: no threshold, because these are covered through the fuel levy.

So a road haulier, a plant hire company or a contract mining fleet is almost never a direct carbon tax taxpayer on its vehicles. A different picture applies if the same group runs a large boiler, kiln, furnace or generator plant, or operates rail or aviation assets above the litre threshold. Large mines and manufacturers you work for may well be direct taxpayers, and that is exactly why they increasingly ask their contractors for emissions data.

Why Are Customers Asking Fleets for Emissions Data?

Even though your trucks are not taxed directly, your emissions show up in other companies' reports. Under the Greenhouse Gas Protocol, which most corporate climate reporting follows:

• Scope 1 is direct emissions from sources a company owns or controls. Your own fleet's diesel is your Scope 1.
• Scope 3 is indirect emissions in a company's value chain. When a mine, manufacturer or retailer pays you to move its goods, your fleet's emissions fall in its Scope 3, under upstream or downstream transportation and distribution.

Listed companies and multinationals are under pressure from investors, lenders and climate disclosure standards to report Scope 3 emissions and show they are reducing. The easiest way for them to improve their data is to ask their transporters for actual figures instead of using generic averages.

Typical requests from customers include:

• Litres of diesel used on their work per month or per contract.
• CO2 per trip, per load or per tonne-kilometre.
• A short note on your method and emission factor.
• Evidence of efficiency measures, such as driver training or newer vehicles.

A transporter who can answer quickly and consistently looks more professional at tender time. One who cannot may find the customer using a conservative default that makes the fleet look worse than it is.

How Do You Calculate Your Fleet's CO2 Emissions From Diesel?

The method is the same one you use for the levy: start from litres.

CO2 (tonnes) = litres of diesel x emission factor (kg CO2 per litre) / 1,000

The emission factor is the step most people get wrong. A peer-reviewed 2022 study in the Journal of Energy in Southern Africa, using South African fuel sales data for 2018 to 2021, determined a country-specific average of about 2.65 kg CO2 per litre of diesel. Other published factors differ slightly depending on fuel density, calorific value and whether other greenhouse gases are included, so state the factor you used and keep it consistent from year to year.

Using the illustrative fleet above:

• 1,000,000 litres x 2.65 kg = 2,650,000 kg
• 2,650,000 kg / 1,000 = 2,650 tonnes CO2 a year

To give a customer a per-contract figure, allocate litres to their trips. That needs fuel records linked to vehicles and trips, not just a monthly fuel card statement. Per tonne-kilometre figures then follow from the tonnes carried and the distances driven.

A practical emissions checklist

• [ ] Record every fuel transaction against a vehicle, with litres, date and odometer or hour meter.
• [ ] Reconcile depot tank dispensing with tank deliveries each month.
• [ ] Link trips to customers so litres can be allocated per contract.
• [ ] Choose and document one diesel emission factor, with its source.
• [ ] Report litres as well as CO2, so customers can apply their own factor if they prefer.
• [ ] Track litres per 100 km or km per litre by vehicle to show efficiency trends.
• [ ] Keep the workings so you can explain any figure to an auditor or customer.

How Can a Fleet Reduce Both the Levy and Its Emissions?

Every litre saved cuts the carbon fuel levy and your reported emissions at the same time, so the levers are the familiar fuel management ones:

• Driver behaviour: harsh acceleration, over-revving, speeding and idling all burn fuel. Telematics scores and coaching, as covered in our driver performance management guide, give drivers specific feedback.
• Idling control: idling at loading points, weighbridges and mine gates is pure waste. Measure it per vehicle and site.
• Maintenance: under-inflated tyres, dragging brakes, clogged filters and injector faults raise consumption. A disciplined service schedule pays back in fuel.
• Load planning and routing: fewer empty kilometres and better payload use cut litres per tonne delivered.
• Fuel control: theft and unrecorded dispensing inflate both your cost and your emissions figure. See our fuel management guide.
• Fleet renewal: newer engines are generally more efficient, which belongs in the replacement case alongside maintenance cost.

To see where fuel sits against your other costs, use the method in our fleet cost per kilometre guide and the fleet P&L analysis guide.

Where Does T-ERP Fit?

T-ERP records fuel transactions against vehicles and trips, so the same data drives fuel cost per kilometre, consumption alerts and a litres-per-contract figure for customer emissions requests. Fleet management holds the vehicle and fuel records, and the transport and mining set-ups on our transport and mining pages link fuel to loads and customers. It does not file carbon tax for you, and for road fleets it does not need to.

Conclusion

For most South African fleets, carbon tax on diesel is not a filing obligation but a per-litre cost built into the fuel price: 23c per litre from 1 April 2026, with the headline rate at R308 per tonne from 1 January 2026 and set to keep rising through the second phase. Direct liability sits with businesses that run listed activities above the Schedule 2 thresholds, which usually excludes road vehicles.

The bigger commercial issue is information. Customers want credible emissions figures, and the only reliable starting point is accurate litres per vehicle and per trip. Fleets that capture that data cut fuel cost, protect margin against levy increases and answer customer questions with confidence.

Sources

• SARS: Tariff amendments 2026, carbon fuel levy and carbon tax rate - diesel carbon fuel levy 17c to 23c per litre from 1 April 2026; carbon tax rate R236 to R308 per tonne from 1 January 2026
• SARS: Carbon tax - facility licensing, calendar-year tax period and DA 180 environmental levy accounts
• Carbon Tax Act, 2019, Schedule 2 (Acts Online) - activity thresholds and allowances, including road transportation (1A3b) with no threshold
• The Tax Faculty: Proposals to increase the carbon tax rate from 2023 to 2030 - phase 1 extended to end 2025; US$20 per tonne in 2026 rising to US$30 per tonne by 2030
• Anthesis: South African carbon tax update, 2026 Budget - 2026 Budget carbon tax and carbon fuel levy changes
• Kornelius et al., Determination of country-specific greenhouse gas emission factors for South African liquid and gaseous fuels, Journal of Energy in Southern Africa (2022) - diesel emission factor of about 2,650 g CO2 per litre
• Greenhouse Gas Protocol: Corporate Value Chain (Scope 3) Standard - Scope 3 categories including transportation and distribution

The information in this article is for general guidance only. Regulations and requirements may change - always verify current requirements with the relevant South African regulatory authority.

Frequently Asked Questions

Do transport companies have to register for carbon tax in South Africa?

Not for their road vehicles. Road transportation has no threshold in Schedule 2 of the Carbon Tax Act because the tax is collected through the carbon fuel levy in the fuel price. A transport business only registers if it also conducts another listed activity, such as large stationary fuel combustion, above the relevant threshold.

How much is the carbon fuel levy on diesel in 2026?

From 1 April 2026 the carbon fuel levy on diesel is 23 cents per litre, up from 17 cents. Petrol rose from 14 to 19 cents per litre. The levy is part of the regulated fuel price, so it is already included in what you pay at the pump or for bulk deliveries.

What is the carbon tax rate per tonne in South Africa?

The headline rate is R308 per tonne of CO2 equivalent from 1 January 2026, up from R236 in 2025. Directly liable emitters can reduce the effective rate with the allowances in the Act. Treasury's policy path points to further increases each year to 2030.

How many kilograms of CO2 does a litre of diesel produce?

A 2022 study using South African fuel data put the average at about 2.65 kg of CO2 per litre of diesel. Published factors vary slightly with fuel properties and method, so choose one documented factor, state its source and use it consistently.

Why does my customer want my fleet's emissions?

Your fleet's diesel emissions form part of your customer's Scope 3 emissions under the Greenhouse Gas Protocol. Many large companies must report these and show reductions, so they ask transporters for actual litres or CO2 per trip rather than relying on generic averages.