The government plans to finalise the long-awaited biofuel blending regulatory framework and have it approved by Cabinet before the end of March 2019, while the Department of Energy (DoE) is also focusing sharply on the development of gas-to-power opportunities.
This was revealed in a speech read by DoE chief director of energy planning Thabang Audat, on behalf of Energy Minister Jeff Radebe, at a conference in Cape Town, on Monday.
Radebe's speech said the department would table the biofuel blending framework to Cabinet for its consideration and approval before the end of March 2019.
“The biofuels policy is aimed at reducing carbon emissions from fossil fuel resources like crude oil. We anticipate that the use of biofuels will results in less greenhouse-gas emissions and other pollutants common within conventional fossil fuels."
Radebe said he had asked his department to complete all outstanding activities relating to the finalisation of the biofuel blending regulatory framework, in support of the establishment and development of the emerging biofuels industry in South Africa.
Audat explained further that the government was keen to introduce certainty about biofuels.
“We want oil companies to allow for our local farmers to farm biofuel products to blend into the main fuel to make it cleaner. We are targeting 2% of the country’s fuel consumption needs,” Audat told delegates at the conference. This amounts to about 400 000 litres.
Radebe said the regulatory framework had three pillars. The first is the mandatory purchase of biofuels by licensed petroleum manufacturers in accordance with the Mandatory Blending Regulation of Biofuels with Petrol and Diesel, which came into effect in October 2015.
The second pillar is the Biofuels Feedstock Protocol, which would regulate and approve biofuels feedstock plans in a way that does not compromise food security and prioritises rain-fed crop production. Thirdly, it would publish standards for biofuels in transport fuel, as well as fuel specifications for the blended fuel.
Radebe, meanwhile, also signalled his strong support for South Africa’s gas-to-power programme and said the conclusion of the review of the Integrated Resource Plan 2018 would stimulate further development of the gas market by providing certainty on the gas-to-power programme.
“This achievement is one of the most important milestones necessary to providing policy certainty geared towards stimulating the much-needed investment in our economy,” he said.
In support of its vision for the South African gas programme, Radebe said the DoE had started gathering information on the potential of a gas-to-power procurement programme.
“We expect the introduction of large-scale gas in the South African economy will lower the country’s carbon emissions not just from the electricity generation perspective but also from the energy sector as a whole, including the industrial and transport sectors.”
Radebe said recent discoveries of new supplies of gas, "the remarkable speed and scale of shale gas development globally" and decreasing gas prices have heightened the awareness of natural gas as a key component of energy supply mix within Southern African countries in a carbon-constrained world economy.
Radebe said there were abundant supplies of natural gas in the world and more recently in neighbouring Mozambique. He said many of these supplies could be developed and produced at a relatively low cost. He outlined the vital partnership with Mozambique.
iGas, a subsidiary of the Central Energy Fund has acquired a 25% shareholding in a joint venture company, the Republic of Mozambique Pipeline Investments Company (ROMPCO) which owns and operates the 865 km gas transmission pipeline from the Mozambican gasfields of Pande and Temane to Secunda in South Africa.
The Mozambican partner, also with 25% shareholding in this joint venture, is the Mozambican government company CMG (Companhia Mocambicana de Gasoduto), a subsidiary of ENH (Empresa de Hidrocarbonetos). The third partner in ROMPCO is Sasol, which owns 50% shareholding. In the transportation part of the project Sasol holds 50%, Mozambique holds 25% and South Africa holds 25%.
“Going forward, the South African government wishes to expand the relationship with Mozambique government for the mutual benefit of the respective governments and to drive economic developments of previously excluded sectors of our society,” said Radebe.
He also highlighted the huge reserves of coal bed methane and shale gas in Tanzania, Mozambique and South Africa.
“South Africa has the possibility of introducing a variety of sources of natural gas which could be economically available within a 25-year planning horizon to 2040,” said Radebe.
But he also raised the challenges of shale gas.
“The environmental challenges of shale gas exploitation, research and regulation certainty will also contribute to the path of gas market development in South Africa.”
Radebe said that, to date, the use of natural gas in South Africa had been largely limited to applications in the industrial (gas-to-liquids) and commercial sectors. Natural gas accounts for 4% of energy consumption in the country.
“Gas represents a very important and growing part of the global energy system. It is the fastest growing fossil fuel and its consumption is forecast to increase by 1.4% a year. It is for this reason that South Africa’s future energy mix features gas as an increasing resource.”