Sep 21, 2012
SA biofuels industry awaits implementation of regulationsBack
Bothaville|Construction|SECURITY|The Bothaville|Africa|Diesel|Industrial|Ment Corporation|Renewable Energy|Renewable-Energy|Security|Water|Africa|South Africa|Mabele Fuels Plant|Security|Energy|Energy Security|Greenhouse-gas Emissions|Less Greenhouse-gas Emissions|Product|Renewable Energy Goals|Security|Eastern Cape|Environmental|Security|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 Energy News
Article contains comments
Updated 1 hour 4 minutes ago In a bid to progress its contentious nuclear build programme and increase the contribution of nuclear energy to the country’s overall energy mix, government reiterates it is in talks with various prospective nuclear vendors over nuclear technologies that could...
Updated 1 hour 35 minutes ago Turkish mobile operator Turkcell has been dealt another blow in its ongoing battle against South Africa-based mobile operator MTN Group, as the International Arbitration Panel dismissed the latest attempt to hold MTN legally accountable for allegedly blocking a...
Updated 3 hours ago Finance Minister Nhlanhla Nene will have his work cut out at this week's budget to try and reassure disillusioned South Africans that the government still has gas in its tank to pull the economy out of the doldrums. Twenty years after Nelson Mandela swept the African...
Recent Research Reports
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
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 road...
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.
This Week's Magazine
The broad-based black economic-empowerment (BBBEE) alignment process in the con-struction sector has begun, dur-ing which the sector codes of the Construction Sector Charter Council (CSCC) will be aligned with the revised Codes of Good Practice (CoGP), which come...
It is second time lucky for Toby Venter. Ten years ago he negotiated to buy the Kyalami racetrack, but “the deal did not materialise”.
Environmental solutions company I-Cat started construction work on its R22-million, 1 949 m2 environmentally sustainable office and warehouse facility, commissioned by I-CAT Environmental Solutions, at a launch event in October. The new sustainable I-CAT campus,...
Effective file synchronisation and sharing across an organisation’s structures can provide the basis for robust mobile-device and document management while maintaining proper backup, version control and content distribution. These are the lessons learned by complex...
Hotel group Carlson Rezidor currently holds the largest hotel pipeline in Africa with 30 hotels and 6 300 rooms under development. The hotel group develops and operates Radisson Blu in the upper upscale segment and Park Inn by Radisson in the mid-market segment. With...