Biofuel in petrol by 2015

2013-10-02 00:00

SOUTH Africa has set October 1, 2015, as the date from which fuel producers will have to blend diesel and petrol with biofuels, the Department of Energy said on Monday.

The government has been vacillating on the introduction of biofuels, but the use of ethanol as a fuel blend could result in massive new investment and job creation in the sugar industry, the biggest agricultural commodity produced in the province.

The government said in August last year that fuel producers would be required to blend a minimum of five percent biodiesel in diesel, and between two percent and 10% of bioethanol in petrol.

South Africa imports 60% of its crude oil needs and became a net importer of finished petroleum products several years ago.

Biofuels are expected to reduce South Africa’s reliance on imported fuel.

The biofuels industry in South Africa, the continent’s biggest agricultural producer, has been held back by an inadequate regulatory regime and concerns that biofuels will hurt food security and impact food prices.

Canola, sunflower and soya are feedstock for biodiesel, while sugar cane and sugar beet are feedstock for ethanol.

South African Sugar Association executive director Trix Trikam said yesterday they have not yet had an opportunity to meet and assess the impact of ethanol production on the local sugar industry.

The association said because of this, it was “premature to provide any comment … at this stage”.

The government said maize, South Africa’s staple food, cannot be used to produce biofuels because it would impact on food security and prices.

One of the companies making progress on a strategy to produce ethanol for the biofuels blend is Tongaat Hulett, one of the biggest sugar producers in the province.

Ethanol presents the biggest expansion opportunity for the sugar industry in South African Development Community (SADC) countries.

“If the SADC were to follow the Brazilian model over the next 20 years, with 60% of petrol being derived from ethanol and all growth in demand was captured by ethanol, it would require the construction of about 120 mills the size of Felixton Mill, create 1,8 million new direct jobs and create at least as many indirect jobs,” Tongaat Hulett CEO Peter Staude said in the latest annual report.

It costs billions of rands just to build one new mill.

The associated power generation would be equal to the Medupi and Kusile coal power stations combined, and it would provide 13-25% of the required carbon footprint reduction needed to meet the target that South Africa has committed to, he said.

He said support mechanisms for the industry to develop its ethanol production capacity were expected to be finalised and implemented by the end of 2013.

Tongaat Hulett wants to construct and commission a large-scale electricity plant and an ethanol plant at each of its mills over 10 years. It has four mills — Darnall, Maidstone, Amatikulu and Felixton.

Southern Africa’s other major sugar producer, Illovo, is currently evaluating ethanol opportunities in Malawi and Zambia. Co-generation opportunities are also being evaluated across the group, according to its 2013 annual report.

Illovo already supplies relatively small volumes of locally produced ethanol to the local beverage, pharmaceutical, personal care, flavour, printing and packaging market segments.

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