South Africa’s Climate Transition Policies Are Creating Jobs — but Leaving Gaps

South Africa’s energy transition sits at the intersection of climate policy, industrial reform and labour market pressures. The country remains one of the most carbon-intensive economies globally, with roughly 70% of its electricity generated from coal. This historic dependence has shaped both its economic structure and employment patterns for decades, anchoring jobs in mining, heavy industry and state-owned power generation.

As global climate commitments intensify and domestic energy constraints deepen, the government has committed to transitioning toward renewable energy, improved efficiency and the development of low-carbon industries. This shift forms a central pillar of South Africa’s climate policy framework and its commitment to a “just energy transition” — a strategy designed to reduce emissions while protecting workers and communities historically reliant on fossil fuels.

The transition is unfolding, however, in an economy facing persistent unemployment. The official jobless rate remains around 30%, with youth unemployment significantly higher. Against this backdrop, policymakers and international partners increasingly present green industrial development and renewable energy investment as potential drivers of inclusive growth and employment creation.

Yet the extent to which green transition opportunities are reaching vulnerable workers and regions remains uncertain, raising critical questions about equity within South Africa’s climate policy agenda.

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Just Energy Transition Framework Aims to Balance Climate and Jobs

South Africa’s transition strategy is anchored in the Just Energy Transition Partnership (JETP), launched in 2021 with major international partners including Germany, the United Kingdom, France, the United States and the European Union. The initiative aims to support the country’s shift away from coal while safeguarding economic stability and employment.

Initial pledges under the partnership totalled $8.5 billion, later expanding to approximately $11.8 billion following additional commitments from countries such as the Netherlands, Denmark, Canada, Spain and Switzerland. Although the United States withdrew its pledged contribution in 2025, other partners have maintained support and funding flows have begun.

South Africa subsequently developed a Just Energy Transition Implementation Plan outlining investment requirements for decarbonisation, energy system modernisation and climate resilience. The plan also emphasises job creation, energy security and economic diversification as core outcomes of the transition.

To date, more than $583 million has been allocated to transition projects, with a public registry tracking spending and project implementation. Policymakers frame the programme as a pathway to both climate mitigation and economic renewal, positioning renewable energy expansion and green industrial development as engines of job growth.

Renewable Energy Sector Creating Jobs — but Mostly Temporary

South Africa’s renewable energy industry has expanded steadily in recent years, driven by procurement programmes and investment in solar and wind projects. Policymakers frequently highlight the sector’s employment potential, describing it as capable of delivering both decarbonisation and job creation.

However, labour market outcomes have been uneven. According to industry insights cited by Alicia Dean, Head of People and Group Services at SOLA Group, approximately 6,000 permanent jobs have been created in renewable energy to date. Most employment generated by projects remains temporary, tied primarily to construction phases rather than long-term operations.

This structural pattern reflects the nature of renewable energy deployment, where large-scale projects require intensive short-term labour during development but relatively few workers once operational. As projects conclude, skilled construction workers often struggle to transition into permanent roles, creating employment volatility within the sector.

The gap between temporary project employment and sustained career pathways underscores a key challenge in South Africa’s just transition: translating infrastructure investment into durable, inclusive labour market gains.

Skills and Technology Shift Reshapes Green Workforce

The transition to renewable energy is also reshaping skills demand across the energy sector. New technologies, digital systems and advanced engineering processes are redefining workforce requirements, creating demand for specialised technical expertise that differs from traditional fossil-fuel employment.

Dean notes that automation and robotics, increasingly used in modern energy systems globally, present particular challenges in South Africa’s high-unemployment context. While technological adoption may improve efficiency and competitiveness, it risks reducing labour intensity in a country where job creation remains an urgent policy priority.

This tension has produced what observers describe as a distinctly South African approach to the energy transition — one attempting to balance technological modernisation with employment preservation. The emerging renewable workforce now encompasses new occupational profiles, including technicians, engineers and data-driven operational roles, but scaling these opportunities remains uneven.

Without coordinated training and reskilling strategies, workers from coal-dependent industries may struggle to access emerging green jobs, potentially widening labour disparities rather than narrowing them.

Fossil Fuel Subsidies Continue to Dominate Energy Support

Complicating South Africa’s green employment prospects is the country’s continued financial support for fossil fuels. Public subsidies for coal, oil and gas have risen sharply in recent years, reaching nearly 110 billion rand ($6 billion) in 2025 — almost triple the level recorded in 2018, according to the International Institute for Sustainable Development (IISD).

The largest share of this support stems from repeated government bailouts of Eskom, the state-owned utility responsible for most of the country’s coal-based electricity generation. Financial interventions since 2019 have aimed to stabilise Eskom’s balance sheet and ensure continuity of electricity supply amid chronic operational challenges.

The IISD analysis also highlights tax exemptions under South Africa’s carbon tax regime introduced in 2019. Several energy-intensive industries receive partial rebates, effectively lowering the cost of carbon pricing and reducing incentives for rapid decarbonisation.

Renewable energy subsidies, by contrast, account for less than 5% of total fossil-fuel support. The imbalance illustrates how legacy energy systems continue to absorb public resources, slowing the pace at which clean energy investment — and associated long-term employment — can scale within the transition.

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Energy Planning Targets Renewable Expansion by 2030

Recent policy decisions indicate a gradual shift in South Africa’s future energy mix. The Integrated Resource Plan 2025 (IRP 2025), approved by the government, outlines targets for expanding renewable generation capacity over the coming decade.

The plan calls for adding approximately 11,270 megawatts of solar photovoltaic capacity and 7,340 megawatts of wind power by 2030, alongside new storage systems and gas-fired generation. These additions are intended to diversify energy supply, reduce emissions intensity and improve system reliability.

Renewable deployment at this scale could expand employment across construction, manufacturing and maintenance segments. However, whether these gains translate into long-term labour market transformation will depend on localisation strategies, supply-chain development and skills programmes embedded within policy implementation.

Employment Equity Emerges as Central Transition Question

South Africa’s climate transition is widely framed as a dual-benefit policy capable of lowering emissions while creating jobs. Yet the distribution of those benefits remains uneven across regions, industries and skill levels.

Coal-dependent communities face the greatest adjustment risks. Mining regions and coal-power hubs have historically anchored employment and local economies. As decarbonisation progresses, these areas may experience job losses unless targeted investment and reskilling programmes are implemented.

Meanwhile, renewable energy development often occurs in different geographic locations, potentially disconnecting new job creation from communities most affected by coal phase-down. Without deliberate policy design, the transition could therefore shift employment geographically rather than replacing it locally.

These dynamics highlight why South Africa emphasises a “just” transition — one that integrates climate objectives with social protection and economic inclusion. Achieving that balance remains one of the central challenges of climate policy implementation.

Policy Ambitions and Labour Realities Diverge

South Africa’s energy transition strategy reflects a broader global narrative: the expectation that green growth can simultaneously drive decarbonisation and employment. However, the country’s experience illustrates the complexity of translating climate policy into equitable labour outcomes.

Renewable energy investment has expanded, yet permanent job creation remains limited. Skills requirements are evolving faster than workforce adaptation. Fossil-fuel subsidies continue to exceed support for clean energy. And coal-dependent regions face uncertain futures as structural change accelerates.

These realities do not negate the employment potential of the green transition, but they underscore that job outcomes depend heavily on complementary policies — including industrial localisation, workforce training, regional development and social protection.

Outlook:

South Africa’s climate policy framework increasingly positions the energy transition as both an environmental necessity and an economic opportunity. International financing partnerships, renewable capacity targets and industrial strategies collectively signal a long-term shift away from coal dependence.

Yet the employment dimension of the transition remains contested. While renewable energy expansion is generating work, much of it remains temporary and unevenly distributed. Coal-linked regions continue to face structural risks, and fiscal policy still favours legacy energy systems.

The effectiveness of South Africa’s just transition policies will ultimately depend on whether climate investment translates into durable employment pathways and regional economic renewal. Aligning decarbonisation with inclusive growth requires sustained coordination across energy, labour and industrial policy domains.

As renewable deployment accelerates toward 2030 targets, the country’s experience may offer broader lessons for emerging economies pursuing climate transitions under high unemployment conditions. The central question remains unresolved: can the shift from coal to clean energy deliver not only lower emissions, but also equitable and lasting jobs?

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By: Rosemary Wambui

3rd March 2026