Port Tariff Hikes To Drive Up Renewable Energy Costs

The renewable energy sector is bracing for increased import costs due to higher port tariffs set to take effect next year.

The South African National Ports Authority has received approval for a 4,4 increase in tariffs for the 2025/26 financial year following a review and public consultation by the Ports Regulator of South Africa. This is lower than the 7,9 increase initially requested by the authority.

A key component of this tariff assessment was the inflation number. The medium-term budget policy statement expects inflation to stabilise around the midpoint of the Reserve Banks 3-6 target, the Ports Regulator explained in its decision.

The tariff increase is expected to ripple through the renewable energy supply chain. The increased tariff will make it more expensive to bring products in and this will change the component pricing, said Andrew Middleton , CEO of GoSolr, which provides subscription-based residential solar solutions.

Supply chain stakeholders will need to determine how much of the additional costs can be absorbed and how much will be passed down to distributors and end consumers. While it is likely that consumer prices will rise, the extent of the increase remains uncertain. 4,4 isnt unreasonable relative to some of the other tariffs that are going up across the country, Middleton said.

However, inefficiencies at South Africas ports remain a more significant cost burden than the tariff increase. I think this probably costs companies more money than the direct tariff, Middleton pointed out.

Deteriorating port efficiency levels have resulted in a loss of R217 million, according to the Ports Regulator. The regulator has, again, noted reports of continued deterioration of port performance caused by lack of refurbishment and investments in equipment by terminal operators. South African ports continue to rank poorly in performance indicators compared with other ports regionally and globally, resulting in increased costs for shipping lines, cargo owners and ultimately South African consumers.

Middleton said If the tariff increase leads to better efficiencies at the ports, that would be a net positive.

Efforts to mitigate the impact of the tariff increase include the use of R225 million from the excessive tariff increase margin credit. Additionally, the regulator has disallowed R185 million in over-expenditures and flagged R169 million in irregular expenditure.

The 4,4 average increase is split among key services

• Marine services tariffs will rise by 6,15.
• Cargo dues will increase by 3,4 with specific adjustments for dry bulk imports and exports.
• Discounts for South African-flagged vessels and licence fees will remain in place.

Incentives, such as a 10 reduction for liquid bulk tankers with Green Award certification, aim to support sustainability.