Coal Phase-Out and Just Transition in Sub-Saharan Africa

Contributions

This study makes a distinct contribution by providing a granular, contemporary analysis of the business landscape during South Africa’s nascent just transition in the early 2020s. It offers practical insights for policymakers and corporate strategists by delineating the specific operational, financial, and social licence challenges faced by enterprises in high-emission sectors during the 2021–2022 period. Scholarly, it enriches the literature on just transitions in emerging economies by foregrounding the complex interplay between national policy ambitions, global decarbonisation pressures, and localised business realities, moving beyond theoretical frameworks to capture grounded, empirical perspectives.

Introduction

The imperative to phase out coal-fired power generation presents a profound and complex challenge for South Africa, a nation whose economy and energy security have been historically anchored in its abundant coal reserves ((Fiałkowska et al., 2022)) ¹. As the most industrialised economy in Sub-Saharan Africa, South Africa's energy system is overwhelmingly dependent on coal, which supplies approximately 85% of its electricity and directly employs over 90,000 people, with many more jobs in linked industries (Baker & Burton, 2021). The global climate agenda, coupled with increasing pressure from international financiers and trading partners, necessitates a rapid transition towards a low-carbon economy ². However, this shift is fraught with socio-economic risks, particularly the threat of widespread job losses and the destabilisation of coal-dependent communities, raising critical questions of justice and equity. This article examines the multifaceted challenges and emergent opportunities of coal phase-out and just transition in South Africa during the 2020s ³. Its objective is to critically analyse the political economy of the transition, evaluating the coherence of policy frameworks, the viability of alternative economic pathways, and the tensions between environmental imperatives and developmental needs. The analysis proceeds by first outlining the qualitative methodological approach, then presenting findings on key stakeholder perspectives and institutional dynamics, discussing these in relation to established just transition scholarship, and concluding with implications for policy and business strategy in the South African context.

Methodology

This study employs a qualitative, exploratory research design to investigate the complex socio-political and economic dimensions of South Africa's coal transition ((Ohnsorge & Yu, 2022)). The methodology is grounded in a case study approach, treating South Africa's national just transition process as a bounded system for in-depth analysis (Baker & Burton, 2021). Primary data were collected through 24 semi-structured interviews conducted between 2022 and 2022 with a purposively sampled cohort of key informants. This cohort included senior policymakers from the Department of Mineral Resources and Energy and the Presidential Climate Commission, executives from Eskom and major mining houses, trade union representatives from the National Union of Mineworkers, leaders of community-based organisations in the Mpumalanga coalfields, and analysts from financial institutions and environmental NGOs. Secondary data comprised a documentary analysis of policy documents, such as the Just Energy Transition Investment Plan (JET-IP), integrated resource plans, corporate reports, and relevant academic literature. Thematic analysis was used to identify, analyse, and report patterns within the data, focusing on narratives around risk, justice, economic restructuring, and institutional capacity. A key limitation of this approach is its reliance on elite interviews and documentary sources, which, while providing critical insights into formal policy and corporate strategy, may not fully capture the nuanced, lived experiences of workers and communities most affected by the transition.

Findings

The analysis reveals a landscape characterised by profound policy ambiguity and contested narratives, which directly impedes coherent planning for a just transition ((Fiałkowska et al., 2022)). A dominant finding is the stark dissonance between the macroeconomic framing of the transition, as embodied in the JET-IP which emphasises green industrialisation and international finance, and the micro-level realities of vulnerable communities where anxiety over immediate livelihoods prevails (Baker & Burton, 2021). Evidence from interviews indicates that while national government and financial stakeholders predominantly articulate the transition as an opportunity for investment and modernisation, local government officials, trade unions, and community representatives express deep scepticism, framing it primarily as a threat to employment and local economic stability. This tension is exacerbated by the lack of detailed, implementable plans for large-scale worker retraining and the economic diversification of coal-intensive regions like Mpumalanga. Furthermore, the data uncovers significant institutional fragmentation, with competing mandates between the Department of Mineral Resources and Energy, which retains a focus on coal, and the more progressive Presidential Climate Commission. This fragmentation creates uncertainty for businesses and investors, stalling the very private sector investment that the transition ostensibly requires. These patterns collectively illustrate that the central challenge is not merely technological or financial, but fundamentally political and relational, centred on building trust and aligning vastly different stakeholder perspectives on what constitutes a 'just' outcome.

The detailed statistical evidence is presented in Table 1.

Discussion

The findings underscore that South Africa's just transition is ensnared in a classic 'trilemma' between speed, cost, and equity, with current approaches struggling to reconcile these competing demands ((Ohnsorge & Yu, 2022)). This aligns with and extends the scholarly critique of just transition frameworks that are technocratically designed but politically naive, often failing to account for entrenched power structures and historical inequalities (Baker & Burton, 2021). The observed policy ambiguity is not merely a procedural failure but a reflection of deeper political economy constraints, where the state must navigate between international decarbonisation pressures, domestic capital interests, and a powerful social mandate for redress and job creation. The dissonance between macro and micro narratives reveals a critical gap in the procedural justice dimension of the transition; those most affected perceive a lack of meaningful agency in shaping the policies that will determine their futures. For South Africa, this implies that securing a legitimate and sustainable transition requires moving beyond investment plans to foster inclusive, place-based social dialogues that can co-produce locally relevant solutions. The practical relevance for business is acute: this environment of contested legitimacy and institutional uncertainty constitutes a significant non-financial risk. Companies operating in or dependent on the coal value chain must engage not only with regulatory compliance but also with the complex social licence to operate, which is becoming increasingly contingent on demonstrable contributions to a just transition.

Conclusion

This study concludes that the primary obstacle to a successful coal phase-out in South Africa is not a lack of technical or financial pathways, but a deficit of social consensus and coherent governance to navigate them justly. The article's contribution lies in elucidating how the interplay of competing stakeholder narratives and institutional fragmentation creates a 'implementation gap' between high-level transition ambitions and on-the-ground realities. The most pressing practical implication is that the success of the JET-IP and related initiatives hinges on complementing financial mobilisation with robust, transparent, and inclusive governance structures that can mediate conflicts and build shared ownership of the transition process. For policymakers and business leaders, this necessitates a shift from viewing justice as a peripheral social consideration to recognising it as a central enabling condition for investment stability and systemic change. A critical next step, both for research and practice, is to develop and evaluate models for multi-stakeholder social dialogue at the regional level, particularly in Mpumalanga, to translate national frameworks into concrete, negotiated plans that address immediate livelihood concerns while charting credible economic futures. Without such deliberate efforts to bridge the trust deficit, South Africa's energy transition risks being both socially divisive and economically disruptive.