R/€ = 13.49
R/$ = 11.88
Au 1214.08 $/oz
Pt 1149.50 $/oz
Aug 31, 2006
SA oil majors willing to market biofuels, but caution on qualityBack
© Reuse this The South African Petroleum Industry Association (Sapia), which represented all of South Africa oil majors, supported government's strategy for the introduction of biofuels into the market, but economic realities and fuel qualities needed strong consideration, executive director Colin McClelland said in the association's 2005 report published Thursday.
He stated that several Sapia members were willing to assist in the marketing of biofuels, but that it was critical to recognise the risk posed by the “mismatch” of the costs of these fuels.
He detailed that this was based on the costs of growing the input materials and the costs of conversion, as well as the revenues based on global oil-prices and the rand-dollar exchange rate.
“Movements in these key parameters could render biofuels production to be highly profitable to highly unprofitable,” McClelland stressed.
However, he noted that, if appropriately managed, biofuels production could lead to job creation, reduce South Africa's dependence on imported fuel feedstocks, reduce greenhouse-gas emissions and improve energy security.
Sapia members are fully prepared to take up both biodiesel and bioethanol, but this would need to take place in a cost-neutral environment, as their use should not result in an increase in the production or distribution costs of the fuels, McClelland highlighted.
He also noted that government policy on biofuels currently concentrated on its use in the on-road transport market, and that the use of biofuels in the off-road and industrial sectors should not be neglected.
“They may offer more cost-effective and easier-to-achieve technical and quality standards,” McClelland said.
He went on to stress that using biofuels components in the production of petrol and diesel posed blending, distribution and usage challenges.
“Failure to properly address these challenges could have serious consequences in the market, as well as for vehicle emissions,” McClelland emphasised, adding that the problems could be overcome if they were adequately recognised and tackled appropriately.
Edited by: Matthew Hill© Reuse this Comment Guidelines (150 word limit)
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...