South Africa delayed introducing a carbon tax until 2015 after objections from metals companies such as ArcelorMittal South Africa and Gold Fields.

The tax of 120 rand ($14) a metric ton of carbon on 40 per cent of a company's emissions will rise 10 per cent a year until 2020, the National Treasury said today in its Budget Review in Cape Town. The government is also considering scrapping an electricity levy over the same period, it said.

The Treasury previously said it would impose the carbon tax, initially proposed in December 2010, from April 1.

“By pricing the external costs associated with carbon- dioxide emissions, incentives will be created to change behavior and encourage energy-efficiency measures,” the Treasury said.

South Africa will probably raise 8 billion to 30 billion rand a year from the proposed tax, Cecil Morden, chief director of tax policy, said in an interview. The Treasury will release an updated policy paper for comment by the end of next month.