South Africa's fossil fuel subsidies tripled between 2018 and 2023, reaching R118 billion. By 2024, they stood at almost R200 billion, most of this for the fossil fuel industry.

These increases were driven by Eskom bailouts and carbon tax exemptions (note that this carbon tax still has to be paid*). To put that in perspective: R200 billion is roughly equivalent to South Africa's entire annual basic education budget. 

These subsidies take several forms, most of which are invisible to ordinary consumers:

• Eskom bailouts: R230 billion was committed as direct financial support to Eskom over a decade from 2019, and another R50 billion in debt relief across 2025–2029. Eskom is a coal utility, which makes these coal bailouts.

• Carbon tax exemptions: South Africa introduced a carbon tax in 2019, but with enormous carve-outs for the biggest emitters (partly thanks to their lobbying over 20 years to weaken things like carbon tax regulations. Eskom's exemption from paying the full carbon tax on its coal-fired generation alone represented R47 billion in foregone government revenue in 2023.

• Electricity subsidies that go to coal by default: Because 86% of South Africa's electricity comes from coal, broad electricity support programmes, including Free Basic Electricity, are effectively coal subsidies. 

All of us are paying these costs, whether we realise it or not, because they are paid through our taxes, through government borrowing, and through the national debt. 

We are subsidising the wrong thing: subsidies for renewables amounted to less than 5% of fossil fuel subsidies in 2024. And still, that tiny investment delivered helped unlock 7.3 GW of generation capacity. This is 13% of total national capacity, and more than the shortfall that brought about loadshedding. 

To sum up: South Africa is spending hundreds of billions on ageing, unreliable coal fleet whose performance has declined for two decades, and only a fraction of that on wind and solar power, which have delivered faster and cheaper electricity than any coal plant in recent decades.

Subsidies are a legitimate economic tool used to support industrial development and protect consumers. In South Africa, however, we’re subsidising the polluting, expensive option at the expense of cheap renewables.

Eskom's tariffs have increased by over 900% since 2007. They’ll keep rising too: in 2025/26, tariffs rose by 12.74% for direct Eskom customers and 11.32% for municipal bulk purchasers. 

A further 8.76% increase has been approved for 2027. Loadshedding has effectively ended, so why is your electricity price still rising rapidly? 

• Consumers are paying off the cost of a coal-dependent system built on debt, poor procurement, and corruption:

  • Medupi and Kusile exemplify this. Budgeted at R70 billion and R80 billion respectively, the final costs of these two coal power stations escalated to almost three times the expected figures, at R208 billion and R239 billion. Researchers at UCT's Energy Research Centre concluded that corruption and state capture were central to these disasters, and criminal prosecutions, asset seizures, and parliamentary inquiries have since confirmed systematic looting across both build programmes.

  • Eskom took over the debt and is recovering the money from you, the consumer, through tariff hikes. In the words of energy analyst Matthew Cruise, writing in BusinessTech: “South African consumers are now being asked to cover the accounting consequences of those overruns.”

And Eskom burns expensive diesel when its old coal fleet fails. Diesel burning in Open Cycle Gas Turbines during these frequent emergency failures costs up to 14 times more than new wind and solar per KwH. 

The high tariffs you pay are because of reliance on an ageing coal fleet. Eskom has spent R65 billion in the five years between 1999 and 2924 on diesel, and even with better coal fleet performance recently, R6.38 billion in 2025/2026. These costs are recouped through the raising tariffs that you pay. 

The South African Reserve Bank has documented the process: the electricity pricing regime links tariffs directly to Eskom's costs. This means that every bailout, every overrun, every diesel purchase, and every debt repayment for this coal-diesel-reliant system contributes to the price consumers pay.

Substantial research shows that coal and other fossil fuels are closely linked to corruption. 

The “resource curse” is experienced in countries across the world with abundant natural resources: their extraction is associated with greater corruption, weaker governance, slower growth, and greater instability, as the wealth they generate is captured by narrow elites at the expense of public spending and services. 

This was described in the OECD's analysis of fossil fuel subsidies in Sub-Saharan Africa.

Similarly, Power Shift Africa’s report Pipe Dreams and the ACCORD research centre's analysis notes that across Africa, fossil fuel extraction has been "closely associated with the “resource curse”, where countries rich in natural resources experience stagnated growth, corruption, and even conflict rather than widespread development.

Everyone in the country is worse off, as profits flow elsewhere and socio-economic instability increases. Worst affected are communities near extraction sites –  like those in Mpumalanga's Highveld and Limpopo's coalfields –  who bear the health and environmental costs. 

Coal isn’t just making your electricity cost more –  it has also caused an expensive public health crisis due to air pollution that our courts consider to be a human rights violation. 

Breathing in this polluted air causes diseases including asthma, chronic bronchitis, lung disease, heart disease and strokes. These illnesses cost families in doctor’s visits and medicine, and they cost taxpayers through the public health system.

In 2023, coal-related air pollution in South Africa led to an estimated 42,000 deaths, including over 1,200 deaths among children under five. That’s 8% of all deaths in the country that year. 

It also causes 43,000 preterm births annually, while children make up more than half of asthma-related emergency room visits, reports the Centre for Research on Energy and Clean Air and Greenpeace.

The same study estimated that South Africa lost the equivalent of 14% of its GDP (more than R900 billion) in 2023 from the sickness, debility and death directly caused by coal-linked air pollution. This number is the calculated lost economic productivity caused by people too sick or no longer alive to participate in the economy.

The International Institute for Sustainable Development found for every R1 the government receives in revenue from burning coal, oil and gas, it spends R5 on social costs including deaths, disease and working days lost.  

As for direct public health costs where people seek medical support, studies estimate coal-related health damages at R11–30 billion annually in South Africa.

Carbon dioxide is overwhelmingly responsible for climate change, and 95% of it comes from the extraction and combustion of fossil fuels. In South Africa, about half of our greenhouse gases (mostly carbon dioxide) come from electricity and heat generation. 

Our coal-based electricity grid is by far South Africa’s largest contribution to the climate impacts from which the planet, and our country, are suffering additional expenses. SA is the 15th largest emitter globally.  

Climate change is very expensive. For example, over 70% of the 2022 KZN flood damage was uninsured against weather related damage. Climate change “significantly worsened” the floods, Wits university scientists found. 

Of the almost R55 billion in damages, most of the cost was absorbed by households, businesses and government as a result.