Sep 21, 2012
SA biofuels industry awaits implementation of regulationsBack
Bothaville|Construction|The Bothaville|Africa|Diesel|Gas|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|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)
Creamer Media Senior Deputy Editor Online
Other Energy News
Updated 9 minutes ago The most-active iron-ore futures in Singapore has sunk below $40/t for the first time, Investec Securities noted on Monday when it reported that additional iron-ore supply was about to be shipped from Gina Rinehart’s new Roy Hill iron-ore mine in Australia. Quoting...
Updated 1 hour 7 minutes ago World leaders will launch an ambitious attempt on Monday to hold back the earth's rising temperatures, urging each other to find common cause in two weeks of bargaining meant to steer the global economy away from dependence on fossil fuels. They arrive at United...
Updated 1 hour 47 minutes ago South Africa is already feeling the negative effects of global warming, the Presidency said on Monday ahead of the Paris climate change summit. In a statement the Presidency qouted Environmental Affairs Minister Edna Molewa as saying: “The impacts of climate change...
Recent Research Reports
Water 2015: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2015 Report considers the aforementioned issues, not only in the South African context but also in the African and global context in terms of supply and demand, water stress and insecurity, and access to water and sanitation, besides others.
Input Sector Review: Pumps 2015 (PDF Report)
Creamer Media’s 2015 Input Sector Review on Pumps provides an overview of South Africa’s pumps industry with particular focus on pump manufacture and supply, aftermarket services, marketing strategies, local and export demand, imports, sector support, investment...
Liquid Fuels 2015: A review of South Africa's liquid fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2015 Report examines these issues in the context of South Africa’s business environment; oil and gas exploration; fuel pricing; the development of the country’s biofuels industry; the logistics of transporting liquid fuels; and...
Road and Rail 2015: A review of South Africa's road and rail sectors (PDF Report)
Creamer Media’s Road and Rail 2015 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 infrastructure and network, the funding and maintenance of these respective networks, and...
Defence 2015: A review of South Africa's defence sector (PDF Report)
Creamer Media’s Coal 2015 report examines South Africa’s coal industry with regards to the business environment, the key participants in the sector, local demand, export sales and coal logistics, projects being undertaken by the large and smaller participants in the...
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
This Week's Magazine
The BMW Group will invest R6-billion at BMW Group South Africa’s (BMW SA’s) Rosslyn plant to produce the next-generation X3 sports-activity vehicle (SAV) for the local and export markets. Rosslyn will continue production of the current 3 Series through its lifecycle,...
The lack of consequences for poor performance and transgressions on the part of contractors remains a significant hurdle to tackling South Africa’s service delivery challenges, delegates heard at the Consulting Engineers South Africa Infrastructure Indaba, on...
City of Ekurhuleni executive mayor Mondli Gungubele earlier this month officially named the city’s bus rapid transit (BRT) system, Harambee.
About 58% of unstructured data stored by companies is dark data, which means that the value or regulatory importance of the data has not been determined. Subsequently, most of the stored data add costs, rather than increasing revenue or reduce regulatory risks, says...
Effective logistics, import/export and manufacturing consulting services require detailed industry knowledge and experience, but can add significant value to these industries by providing expert advice on various technical elements in their value chains, says...