R/€ = 14.05
R/$ = 10.71
Au 1280.65 $/oz
Pt 1421.50 $/oz
Jul 06, 2007
Government to finalise fuel support strategy next monthBack
Engineering|Africa|Gas|Africa|South Africa|Greenhouse Gas Emissions|Products|Cornelis Van Der Waal|BIOFUELS
© Reuse this The biofuels industry in South Africa is currently at the forefront of exciting growth. Under the Kyoto Protocol, the government is committed to reducing greenhouse gas emissions, with one of the most important ways of achieving the targets being to boost biofuels production and consumption.
However, the industry is currently waiting for government to finalise its fuel support strategy which will be released in August this year. "This will give a strong indication to farmers and fuel producers about the financial support they will receive from government to get the industry up to the standard where it can compete with the established fossil fuel industry," Frost & Sullivan industry analyst Cornelis van der Waal tells Engineering News.
He states that the technology used in the industry is mainly based on European and American technology but it is expected that the cost of technology will decrease significantly over the next ten years. However, producers will have to develop the local market, and will have to invest in the available technology at current prices.
Van der Waal says that the biofuels industry is currently stagnant, but considerable investment is being planned and will commence as soon as government unveils its fuel support strategy.
"The aim is to substitute at least 4,5% of all fuels consumed by 2010," explains Van der Waal. He adds that additional production will have a number of positive spin-offs for the country. "The first is increased employment in the agricultural and biofuels industry. The second is the retention of valuable currency that would have been spent on acquiring crude oil products. This, in turn, should have a positive influence on the overall economy," he says.
There are a number of challenges currently facing the biofuels industry. Van der Waal says these include the lack of certainty regarding subsidies as well as the lack of guaranteed offset markets. He says the challenge of skills development is also an important aspect to consider in the industry, as well as the challenges being faced in sufficient feedstock production, without affecting food production.
But, the production of bioethanol and biodiesel for local consumption and even for export purposes, is the biggest potential for growth in the industry.
The development of this market is a direct result of the increased fossil fuel prices experienced over the last three years. The technology used for biofuels has been around for many years but as a result of relatively low fossil fuel costs the biofuels industry was not competitive with traditional fuel production processes. The main challenge will be to develop an industry that is sustainable even when the price of crude oil drops to levels of about $40 to $50 a barrel.
Frost & Sullivan is currently participating in a study on the Southern African biofuels market which will provide a clear indication of the state of the industry, concludes van der Waal.
Edited by: Creamer Media Reporter© Reuse this Comment Guidelines (150 word limit)
Other Energy News
Article contains comments
Article contains comments
Recent Research Reports
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
This Week's Magazine
South African State-owned defence industrial group Denel has announced its fourth consecutive year of profits. The group's results for the financial year 2013/2014 were recently announced at its head office in Centurion, south of Pretoria. Revenues grew by 17%, net...
There is little opportunity for JSE-listed infrastructure company Group Five to grow shareholder value in the domestic market, says CEO Mike Upton. He says value can still be found in the private sector, in the renewable and industrial power sector, as well as in...
The National Association of Automobile Manufacturers of South Africa (Naamsa) has announced the event dates of the 2015 Johannesburg International Motor Show (JIMS). The event will take place from October 14 to October 25, 2015, at the Johannesburg Expo Centre, Nasrec.
UK engineering support services provider Babcock is set to deliver the largest order of global truck manufacturer DAF’s truck tractors in Southern Africa to bulk carrier road-based logistics company Ngululu Bulk Carriers (NBC), with 133 trucks to be delivered in...
Digital radio communications in the African local government space can open up the world, but have many challenges to overcome, notes integration and migration of legacy radio communications infrastructure with digital mobile radio company Emcom Wireless head of...