South Africa Proposes Tariff Reforms To Boost Local Renewable Manufacturing And Strengthen Supply Chain

South Africa is planning major changes to its renewable energy trade policies to support local manufacturing and strengthen its domestic supply chain. The International Trade Administration Commission (ITAC) has released preliminary findings proposing revisions to import tariffs, tax benefits, and procurement rules for green energy components.

A key proposal is the increase in import duties on lithium-ion batteries. ITAC has suggested raising the general customs duty on fully assembled batteries to 15%. This step aims to encourage domestic production as the demand for energy storage systems continues to grow in the country’s renewable energy sector.

The Commission is also reviewing the existing “staged consignment” policy. This policy currently allows developers to import complete equipment packages for large projects without paying duties, assuming such components are not available locally. However, ITAC has found that several components, including solar panels, inverters, trackers, and steel tower sections, can already be manufactured within South Africa. Under the proposed changes, these items may no longer qualify for duty-free imports, pushing developers to source from local manufacturers.

For solar panels, the government plans a gradual approach. A temporary rebate on imported panels will remain in place until domestic assembly capacity can meet at least 50% of national demand. This is intended to avoid supply shortages and ensure that ongoing renewable energy projects are not disrupted during the transition.

In addition, the Public Procurement Act of 2024 is expected to play a key role in enforcing local content requirements. Public sector projects may soon be required to use a certain percentage of locally manufactured components, further boosting the domestic industry.

To support effective implementation, ITAC has recommended forming a dedicated advisory committee of industry experts. This group would guide trade measures and ensure they remain balanced and practical.

These proposals are still under review. ITAC is currently seeking feedback from stakeholders and conducting consultations to ensure the final policies support both economic growth and the renewable energy transition without significantly increasing project costs.