Global antitrust sustainability heatmap

Horizontal Agreements in the Environmental Context: In 2020, the OECD issued a paper that discusses whether competition policy should be influenced by sustainability. The 2020 paper follows the OECD's 2010 paper, which considers, from national perspectives, the interaction between horizontal agreements with environmental goals and competition law policies.

The 2020 paper also analyses the substantive application of competition law to sustainability issues by exploring the extent to which competition law can be interpreted in a way that fosters or limits sustainability initiatives. In addition, Australia and New Zealand, Germany, Greece, Lithuania and the Netherlands have submitted contributions to this discussion. The OECD's 2020 paper provides a thorough introduction to the state of play of sustainability in the context of competition law. It encourages agencies to be clear about their objectives and priorities in order to provide clarity on how sustainability fits into competition law, with formal and informal guidance emphasised. It also examines approval procedures, sandboxing, admissible evidence, capacity, fining, and international co-operation as possible measures to further sustainable goals. In December 2021, the OECD roundtable assessed these issues again and published a follow-up paper specifically on environmental considerations in competition enforcement. Additionally, the 2022 OECD Competition Open Day addressed, inter alia, Green Innovation. In December 2022, OECD Global Forum on Competition will discuss the goals of competition policy including the question on whether "competition law and policy needs to adapt as a policy instrument to better accommodate socio-economic trends such as the rising importance of sustainability".

Antitrust Rules: Israel allows for an approval procedure where public interest, including environmental considerations, can be taken into account when deciding on restrictive arrangements (see the contribution of Israel to the OECD paper on Horizontal Agreements in the Environmental Context). In such cases, practice indicates that the positive effect on the environment must be significantly greater than the damage resulting from an anti-competitive agreement.

Position of the Israel Antitrust Authority: The Israel Antitrust Authority ("IAA") has also acted as an unofficial advisor in the legislative process for the regulation of the market for the collection of beverage containers, where it expressed a view that environmental legislation should be structured in a manner that promotes competition.

The IAA has refused to grant an exemption from the approval of a restrictive arrangement submitted by the Association of Food Industries of the Israel Manufacturers Association, in which they sought to coordinate the price of the deposit of beverage containers, and in particular those of 1.5 litres and up. The Association was concerned that a minimum deposit of ILS .30 per bottle, which is determined by the Environmental Protection Minister with the approval of the Knesset Economics Committee, was insufficient to meet the collection targets set under law. The IAA denied the request and determined that granting the exemption would allow the association to set a deposit while considering the profit considerations of the association members, which could place a greater burden on and harm consumers, leading to an increase in prices and in beverage collection costs. In addition, coordinating high deposit fees may serve large manufacturers but detriment the interests of small manufacturers. (See OECD Annual Report on Competition Policy Developments in Israel 2021)

General position of South African authorities on sustainability: A notable aspect of the South African Competition Act No.89, of 1998 (as amended) (the "Competition Act") is its focus on public interest. South Africa was one of the first countries to adopt a public interest provision in its competition law in 1998. Public interest considerations will feature during the assessment of mergers and can also come into play in exemption applications; however, the factors considered in each context differ slightly.

In the aftermath of apartheid, the regulator created an exemption from the horizontal prohibited practices provisions of the Competition Act for inter alia "firms controlled or owned by historically disadvantaged persons ("HDPs") to become competitive". However, South African law does not currently expressly provide for a similar exemption in respect of sustainability. Thus, firms cannot rely on the benefits that their collaboration on sustainability related initiatives would generate as a basis for an exemption. Such conduct would still be assessed under section 4 of the Competition Act (i.e. horizontal restrictive practices, which notably include several per se prohibitions).

In the context of merger control (where public interest considerations are most frequently encountered), the Competition Act sets out five public interest grounds. The Competition Act requires the competition authorities, on a stand-alone basis, to consider whether the transaction can or cannot be justified on substantial public interest grounds. Thus, it is possible that a pro-competitive transaction could be prohibited if it is found that the transaction would have a substantial negative effect on the public interest. Conversely, a transaction that harms competition can be approved if it is determined that it will have a sufficiently positive public interest effect.

Environmental sustainability as a factor in merger control reviews: Even though the law does not expressly refer to environmental sustainability, the South African competition authorities have seemingly interpreted one of the five public interest factors, namely the "Effect on particular sector or region" to include environmental sustainability goals.

By way of recent example, in 2024, as a condition to its acquisition of Engen, Vitol committed to investing R9.85 billion over a five-year period in its retail and fuel infrastructure, as well as in the development of renewable energy generation capacity. The committed investment could increase by R4 billion subject to the outcome of feasibility studies in areas such as marine infrastructure, as well sustainable and biofuel production.

In the Air Liquide merger and the acquisition of Namibian Breweries and Distell Group by Heineken, environmental sustainability goals played a role from a public interest perspective. The Air Liquide merger concerned an acquisition by Air Liquide Group (a supplier and producer of industrial and specialty gases) of 16 air separation units owned by Sasol South Africa Ltd. The air separation units separate atmospheric air into nitrogen and oxygen and are used to produce both industrial and speciality gases. The merger was approved subject to the commitment to substantially reduce the carbon emissions associated with air separation units within ten years of the merger implementation date. This should be done by initiating, amongst other reduction strategies, a renewable energy procurement process aimed at procuring an aggregate amount of up to 900 MW of renewable energy. The acquisition of a controlling interest in Namibian Breweries and Distell Group by Heineken in South Africa, Namibia and selected markets across sub-Saharan Africa was approved subject to competition and public interest-related conditions. These included that the companies continue to accelerate the sustainability efforts of Distell and Heineken South Africa, inter alia to protect the environment. As such, Heineken committed to implementing (amongst others) a carbon neutrality initiative, aiming for net zero emissions in production by 2030 and carbon neutrality across the value chain by 2040.

A more recent example is the Competition Commission's (the "Commission") conditional approval on 10 February 2025 of the merger between Trouw Nutrition South Africa (Pty) Ltd and Chemfit Fine Chemicals (Pty) Ltd involving activity in the manufacture and supply of animal feed premixes. Although the Commission found that no competition concerns arose from the merger, it nonetheless imposed a suite of public interest conditions, including a dedicated "health, safety and environment" capital commitment requiring the acquiring group to invest a specified amount over six years in improvements at the target's Burgersdorp production facilities, such as improved ventilation to reduce the inhalation of hazardous substances, a fire escape and sprinkler system, and improved extraction systems to prevent dust explosions. The conditions also included community upliftment commitments directed at, amongst other things, sustainable recycling and waste disposal solutions. This illustrates that environmental considerations in South African merger control are not confined to large-scale energy or carbon-emissions commitments of the kind seen in the Engen, Air Liquide and Heineken transactions, but can also take the form of more granular, facility-level health, safety and environmental capital expenditure conditions tied to a particular region or community.

It is worth noting, however, that not every reference to environmental or social sustainability by merging parties will be sufficient to influence the outcome of a merger assessment. In the Draslovka/Sasol sodium cyanide merger, for example, the acquiring firm sought to rely, amongst other things, on its intention to "ensure the environmental and social sustainability" of the target's production plant as part of its claimed pro-competitive and public interest benefits. The Competition Tribunal (the "Tribunal") ultimately prohibited the merger, finding that these proposed upgrades and associated environmental and social sustainability commitments had "not been defined with any specificity, or sufficiently quantified", and that Draslovka itself accepted it "cannot determine or give particularity regarding the upgrades that are required". This case is a useful illustration of the evidentiary threshold the authorities are likely to apply environmental sustainability commitments (like other public interest or efficiency benefits) must be sufficiently specific, quantifiable, and capable of being monitored and enforced if they are to carry weight in the overall assessment, rather than merely being asserted in general terms.

Although concepts such as environmental sustainability have only relatively recently entered the South African competition law lexicon, the above examples show that these factors can nonetheless play an important role in merger review and it is anticipated that these considerations may become more prominent in the future, particularly following the publication of the Commission's Revised Guidelines on Public Interest in Merger Control.

Revised Guidelines on the Assessment of Public Interest Provisions in Merger Regulation: In 2024, the Commission published Revised Public Interest Guidelines Relating to Merger Control. The Guidelines identify "the effect of the merger on … environmental sustainability … in a particular industrial sector or region of South Africa " as one of the factors to consider when the Competition Commission assesses the likely effect of a merger on a particular industrial sector or region. Historically the definition of "sustainability" was for these purposes typically considered from an economic perspective only. However, as can be seen from more recent decisions (see above) and in light of the Revised Public Interest Guidelines, the Competition Commission and Competition Tribunal will consider in their analysis the impact of the merger on the environment and potentially imposed conditions to mitigate such impact (or accept conditions that result in potential positive environmental sustainability effects as a means of outweighing other potentially harmful public interest effects). In conducting this assessment the Commission will specifically consider "the effect of the merger on the environment (e.g. pollution, increased carbon emissions, etc.)".

This trajectory is consistent with the Competition Commission's broader institutional priorities. In its 2026/2027 Annual Performance Plan ("AAP"), the Commission notes that its work is informed by "broader economic, social, geopolitical, and climate conditions", and that the Department of Trade Industry and Competition's industrial policy has identified decarbonisation (including renewable energy, green hydrogen and battery value chains) as one of three pillars, alongside digitalisation and diversification, intended to drive inclusive growth and sustainable job creation, given that South Africa's manufacturing sector is "carbon-intensive", which could otherwise limit future export potential. While the APP does not itself set out detailed environmental merger control policy, it confirms that environmental and climate-related considerations are increasingly embedded in the wider industrial and economic policy framework within which the Commission's merger control and public interest assessments operate, reinforcing the expectation that environmental sustainability factors will feature more prominently in future merger reviews.