Sep 21, 2012
SA biofuels industry awaits implementation of regulationsBack
Bothaville|Construction|The Bothaville|Africa|Diesel|Industrial|Ment Corporation|Petroleum|Renewable Energy|Renewable-Energy|SECURITY|Water|Africa|South Africa|Mabele Fuels Plant|Energy|Energy Security|Greenhouse-gas Emissions|Less Greenhouse-gas Emissions|Product|Renewable Energy Goals|Eastern Cape|Environmental|Water|Eastern Cape|Nala Municipality|The Government Gazette|South Africa|BIOFUELS|Diesel
© Reuse this
The Department of Energy (DoE) last month published regulations regarding the mandatory blending of biofuels with petrol and diesel in the Government Gazette.
The regulations, once implemented, constituted another step towards the establishment of a biofuels industry in South Africa. Establishing the industry will also be in line with the country’s aim of moving towards using cleaner fuels that have a lower sulphur content and produce less greenhouse-gas emissions by 2017.
The regulations state that a licensed petroleum manufacturer must buy all bio- ethanol and biodiesel offered for sale by a licensed biofuels manufacturer, provided the volumes can be blended with the petro- leum manufacturer’s petrol and diesel within the minimum concentration of 5% volume per volume (v/v) biodiesel blending with diesel, and between 2% v/v and 10% v/v of bioethanol to petrol.
Besides the mandatory blending regulations, legislation on a pricing structure that will determine the delivered cost of biofuels and a government-agreed incentive for biofuels producers must also still be announced before an industry can be fully established.
“This action is a major milestone in the development of the domestic biofuels industry; however, the pricing regulations and incentives, as guided by the 2007 Biofuels Industrial Strategy compiled by the former Department of Minerals and Energy, need to be finalised and approved,” says Moodaly.
“It is our understanding that government will pronounce on the regulated price and the financial support mechanism for licensed biofuels producers shortly, as the National Treasury’s commitment to the approval and confirmation of the financial support mechanism is crucial.
“We eagerly await pronouncement on these two outstanding items, as it will complete the suite of regulations and incentives that will unlock funding for a sector that is capable of creating jobs, contributing to economic growth, improving air quality, as well as enhancing fuel security in South Africa,” he adds.
Once all the regulations have been implemented, a fully functioning biofuels industry can be established and regulated in a transparent manner, asserts Moodaly.
At the time, biofuels investment was seen as a catalyst for the transformation of South Africa’s underdeveloped rural economies, a contributor to the country’s renewable energy goals and its energy security, as well as a method of reducing greenhouse-gas emissions.
Under AsgiSA, a feasibility study into the development of a biofuels industry in South Africa was undertaken, which indicated that the industry represented a great opportunity for rural development.
The feasibility study culminated in the release of a draft strategy, followed by the release of the Biofuels Industrial Strategy.
As a result of the strategy not favouring mandatory blending at a regulated price and delays in the implementation of the incentive, four of the six bioethanol plants that were in the process of being developed at the time, have been put on hold, says Moodaly.
Only two of the plants remained going concerns, namely the Industrial Develop- ment Corporation’s plant, in Cradock, in the Eastern Cape, and Mabele Fuels, in Bothaville, in the Free State.
Mabele Fuels Plant
He says Mabele Fuels hopes the pricing and incentive regulations will be imple- mented before the end of the year.
Once complete, the plant will produce 150 000 m3 of bioethanol each year from a blend of different grain sorghum cultivars, which are dependent on the different price points and production efficiencies of each cultivar.
The traditional sorghum beer market has diminished to such an extent that farmers have resorted to producing other crops instead, he says.
The biofuels market, however, does not need a high-specification sorghum and may, once again, promote the production of sorghum, says Moodaly.
What makes grain sorghum to bioethanol production advantageous in South Africa is that grain sorghum is a less water-intensive feedstock crop than sugar cane, is the least capital-intensive feedstock to process and will, as a result, require the smallest incentive from government for greenfield production.
Further, Dried Distillers Grains with Solubles (DDGS), which is a medium-protein animal-feed component, is produced as a by-product of grain sorghum-to-ethanol production.
The DDGS will, to some extent, add to South Africa’s food security and lessen the country’s prevailing need for imported soya meal, states Moodaly.
The DDGS will further incentivise the production of grain sorghum for farmers, as the by-product can also be sold to the local feed market.
Depending on the type of grain sorghum used, a typical bioethanol plant will produce 1 m3 or 1 000 ℓ of bioethanol, 0.7 t to 0.8 t of DDGS and about 0.7 t to 0.8 t of carbon dioxide (CO2) from about 2.4 t of grain sorghum.
Moodaly notes that only one-third of a bioethanol plant’s product is used as fuel, while the CO2 can be sold to the speciality chemicals and gases industries for use in the beverage market and the DDGS can be used in animal feed.
Based on this, it is Mabele Fuel’s view that the use of underused land to produce raw materials for a bioethanol plant will improve food security, as about two-thirds of the processed grain enters the food and beverage market.
Mabele Fuels commends the DoE on the work it has done in terms of the regu- lations to date and looks forward to a South African biofuels industry finally being realised, says Moodaly.
Edited by: Chanel de Bruyn© Reuse this Comment Guidelines (150 word limit)
Other Biofuels News
For two years, Italy-based industrial research and development company Sunchem have been working on producing jet fuel using a tobacco crop project in Marble Hall, Limpopo, which has proved to be successful in the small-scale trials, says Sunchem SA MD Joost van...
Cape Town-based industrial boilers designer and manufacturer John Thompson developed the MicroGen watertube boiler – launched this year – to cater for increasing demand for small, medium-pressure power boilers that are particularly suited to applications in fibrous...
Development financier the Eastern Cape Development Corporation (ECDC) signed a cooperation agreement with Argentina-based consortium A & G International in July, which will lead to the production of 25 000 ha of soybeans and other grains for biofuels, human...
Recent Research Reports
Steel 2015: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2015 report provides an overview of the key developments in the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon...
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
This Week's Magazine
While economic forecasts for the African continent are most favourable, African airlines may not be able to benefit from the expected growth in the region’s gross domestic product (GDP), International Air Transport Association VP: Africa Raphael Kuuchi has warned....
The Automotive Production and Development Programme (APDP) will need to change substantially post 2020, says Metair Investments South African operations COO Ken Lello. “We must not make tweaks. We have to change. What we are doing is not sustainable.”
Banking group Absa’s forecast is for the rand to end the year at around R13 against the dollar, weakening further to R13.50 by 2016, says Absa sectoral analyst Jacques du Toit. He warns that possible interest rate hikes in the US may see capital being pulled from...
The Dispute Resolution Centre at the Bargaining Council for the Civil Engineering Industry (BCCEI) is now open to handle party-to-party disputes. The BCCEI represents the interests of all level four to nine Construction Industry Development Board companies.
Communications technology firm Ericsson sub-Saharan Africa head Fredrik Jejdling says the company’s commitment to sustainability and corporate responsibility has been integrated into all facets of its operations, which has provided it with sustainable revenue...
Next ArticleFinancier moves ahead with biofuels project