Sasol’s stock is on pace to record its worst annual performance ever as investors scrutinize the company’s strategies to address environmental and operational challenges.

Read: Major Sasol petrochemical facility faces serious challenges …

The Johannesburg-based company predominantly relies on coal for its synthetic production processes at the Secunda site, known as the world’s largest individual emitter of greenhouse gases. Sasol aims to reduce emissions by 30% by 2030; this goal hinges on replacing some of its most polluting fossil fuels with natural gas, although its gas fields in Mozambique are currently declining.

Sasol’s shares fell dramatically on Monday, plunging 56% this year alone. This poses a significant challenge for CEO Simon Baloyi, who took the helm in April. In a local newspaper interview, Baloyi suggested that the emissions target could potentially be more reachable if treated as a range, a view met with criticism from environmental groups.

Moreover, Baloyi mentioned that the company would review its assets following R56.7 billion in impairments linked to its operations in both the US and South Africa.

Read: Sasol shares fall amid disappointing performance metrics

Analysts at Bloomberg Intelligence indicate that additional write-downs at the Secunda site seem necessary due to the firm’s commitment to reduce coal consumption and meet its emissions reduction targets.

Once the largest revenue-generating company in South Africa, Sasol must undergo a substantial strategic transformation by 2050 to attain net-zero emissions.

Moody’s Ratings noted that the company faces “significant exposure to carbon transition risk,” which necessitates major investments, as highlighted in their periodic review on October 10.

Read: Analyzing Sasol’s losses

Baloyi’s predecessor, Fleetwood Grobler, had suggested initiatives to harness green hydrogen—a cutting-edge technology that generates energy without greenhouse gas emissions by splitting water with renewable power.

However, BloombergNEF indicates that this technology remains too costly at present.

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