Energy Users Block Exemption, Government Gazette 53921, electricity supply constraint, industry in distress, Competition Act South Africa
The Department of Trade, Industry and Competition has amended the Energy Users Block Exemption under the Competition Act.
The changes were published in Government Gazette No. 53921 on 5 January 2026 and signed by Minister Parks Tau.
What is happening?
On 5 January 2026, the Minister of Trade, Industry and Competition amended the scope of the Energy Users Block Exemption, 2025.
The amendment allows certain agreements between energy users that would normally fall under sections 4(1)(a), 4(1)(b)(i) and 5(1) of the Competition Act, if they are aimed at responding to electricity supply constraints or assisting an industry in distress.
The notice also introduces a formal definition of:
- “Energy regulator” as the National Energy Regulator of South Africa.
- “Industry in distress” determined by the dtic on a case-by-case basis after consultation with the energy regulator.
In addition, the exemption now clearly includes collaboration to assist an industry experiencing substantial exit of firms and job losses due to macro-economic challenges.
Why it matters
Many Eastern Cape manufacturers, agro-processors and large commercial energy users have struggled with load shedding and high energy costs.
The amendment clarifies that businesses may collaborate in specific ways to:
- Secure backup or alternative energy
- Reduce energy costs
- Optimise energy use
- Share infrastructure or facilities
This reduces competition law risk where cooperation is strictly limited to addressing electricity supply constraints or supporting an industry formally recognised as being in distress.
However, price fixing for selling goods or services to customers remains excluded.
What you need to know
The exemption applies only in specific situations.
| Area | What is allowed |
|---|---|
| Purpose | Must respond to electricity supply constraints or assist an industry in distress |
| Collaboration types | Joint negotiation and purchase of energy, joint financing of backup supply, shared generation capacity |
| Price agreements | Only allowed if approved within the relevant energy regulatory framework |
| Legal limits | Does not override other energy sector laws or regulatory frameworks |
| Duration | Remains in operation until withdrawn by the Minister |
The regulations specifically allow:
- Joint negotiation and purchase of energy, including power purchase agreements
- Joint financing of backup and alternative energy supply
- Joint purchasing of shared backup or alternative energy generation capacity
- Negotiated price agreements approved under the relevant energy regulatory framework
The exemption does not replace existing energy sector legislation.
What you should do next
If you are:
A business owner or energy-intensive operator
- Review your current energy procurement arrangements
- Confirm whether collaboration falls strictly within the exemption scope
- Seek legal advice before entering collective agreements
An industry association
- Engage the dtic to determine whether your sector may qualify as an “industry in distress”
- Consult with the National Energy Regulator before negotiating price-related arrangements
Ensure that all agreements are clearly documented and limited to energy-related objectives.
Where to get help
Official sources:
- Government Gazette No. 53921 (5 January 2026)
- Department of Trade, Industry and Competition
- National Energy Regulator of South Africa
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