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Sep 21, 2012

DoE’s mandatory blending regulations welcomed by grain producers

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South African grain producers association, Grain SA, has welcomed the Department of Energy’s (DoE’s) publication of the Mandatory Blending of Biofuel with Petrol and Diesel regulations in the Government Gazette last month.

“These regulations are set to re-establish the grain sorghum market in South Africa and provide a much-needed boost for this declining market,” says Grain SA market research senior economist Wessel Lemmer.

He points out, however, that the implementation date of the blending regulations must still be determined by Energy Minister Dipuo Peters.

The regulations stipulate that the minimum concentration of biodiesel blending in diesel is 5% volume per volume (v/v), with the permitted range for bioethanol blending in petrol ranging between 2% v/v and 10% v/v.

The Biofuels Industrial Strategy, released by the former Department of Minerals and Energy in 2007, states that, given South Africa’s climatic conditions, agricultural potential, land availability and food security, the country can consider biofuel production.

Since the publication of the strategy in 2007, industry patiently expected the announcement of the regulations on the mandatory blending and administered pricing of biofuels to retain the investment and business confidence of investors, financiers and producers to establish a biofuels industry.

The implementation of these regulations and other government incentives should not be delayed any further, asserts Lemmer.

The strategy, which excluded maize as a biofuel feedstock, owing to food security concerns, identified grain sorghum, sugar cane and sugar beet as possible feedstocks for bioethanol production.

Lemmer says grain sorghum is the better-positioned crop for South African bioethanol production, as sugar cane is mostly limited to high rainfall areas, such as KwaZulu-Natal.

Grain sorghum is drought tolerant and adaptable to the drier climates and production conditions found throughout the rest of the country, owing to its root system.

It can also be grown on land where maize cannot be grown. This enables producers to use underutilised land to grow sorghum.

Grain SA’s latest grain sorghum pro- jections for the 2012/13 financial year indicate that 137 000 t of sorghum was produced locally, while 85 000 t of sorghum was imported.

Further, statistics indicate that 49 000 ha of grain sorghum were planted with a yield of 2.82 t of sorghum for each hectare.

Total grain sorghum demand was recorded at 226 000 t, with 80 000 t for the malting industry and 105 000 t for the meal industry.

The 2% minimum concentration of bio- ethanol blending in petrol stipulated in the blending regulations will require 600 000 t/y of grain sorghum, says Lemmer.

It is estimated that 600 000 t/y of grain sorghum will be sufficient for the needs of the country’s two major bioethanol plants, which are to be built by the Industrial Development Corporation in Cradock, in the Eastern Cape, and by fuel-grade ethanol manufacturer Mabele Fuels in Bothaville, in the Free State.

“This means that total local grain sorghum demand is set to rise from 226 000 t/y to 826 000 t/y as a result of bioethanol pro- duction,” notes Lemmer.

Grain Sorghum Cultivars
Between 12 000 and 15 000 25 kg bags of grain sorghum seed is currently supplied to the market each year, says Pannar sorghum research manager Dries Booyens.

“The grain sorghum seed industry will increase to between 60 000 and 70 000 25 kg bags of seed a year, with an addi- tional 240 000 ha being planted to meet the increased demand for the crop from the biofuels sector if both the Cradock- and Bothaville-based bioethanol plants are in operation,” he says.

In response to the mandatory blending levels, seed producers are encouraged to start increasing their output now, says Lemmer.

“For the seed multiplication to occur, seed breeders will have to contract producers before the end of September to multiply the seed for the 2014 crop, after which the biofuel plants are expected to be ready for intake,” he explains.

Pannar supplies four grain sorghum hybrids to the market, namely PAN 8816, a tannin-free sorghum that is currently used by 85% of the market owing to its good yield and stability, as well as malting and milling capabilities; and PAN 8625, a tannin grain sorghum with good adaption, yield and malting quality.

Pannar also supplies PAN 8909 and PAN 8906, which are new hard-seeded hybrids that are suitable for milling and ethanol production.

Booyens is of the opinion that culivars that have good malting qualities will most likely be suitable for the production of higher extractable starches.

Booyens reports that the hybrids mar- keted by Pannar have been sent for testing to determine the extractable starch content of the seeds, with the data expected to be available within the next month.

Seed companies are encouraged to invest in researching which hybrids will produce the highest extractable starches for bio- ethanol production.

Advantages
A larger grain sorghum market in South Africa will result in more sorghum being produced for the production of meal and bioethanol.

This could, therefore, also manifest in not having to import grain sorghum from Australia and even in exporting any excess sorghum, says Lemmer.

Meanwhile, expanding the grain sorghum market, specifically as a feedstock for bio- ethanol production, has enabled the development of new sorghum producers.

The Grain SA Farmer Development Programme is committed to developing capacitated, sustainable, black commercial producers, he notes.

Challenges, such as the nonprofitability of grain production; a lack of knowledge, skills and experience; as well as a lack of production credit, adequate equipment and land access are being dealt with through the programme.

This will increasingly enable small-scale black producers to become commercial sorghum producers and, in turn, increase skills and job creation in the rural areas that are suitable for sorghum production.

Grain SA says it has assisted government in making this initiative a success.


“Producers were trained and partnership agreements were signed with the Department of Rural Development and Land Reform to recapitalise farms in the Free State, North West and Mpumalanga to produce additional tons of feedstock for bioethanol production,” the association says.


Grain SA says it is very important for the private sector, however, that Minister Peters announces the implementation date of the regulations and the administered prices of biofuels as soon as possible, as very little work can be done to establish a biofuels industry before that is confirmed.

“A greener future will benefit everybody and the jobs that will be created will benefit not only South Africa but also the rural areas where the grain and biofuel will be produced,” concludes Grain SA CEO Jannie de Villiers.

Edited by: Chanel de Bruyn
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