DoE goes to ground over mandatory blending of biofuels deadline

6th March 2015

By: Natalie Greve

Creamer Media Contributing Editor Online

  

Font size: - +

Amid an ongoing delay in the promulgation of the Final Position Paper on Biofuels by the Department of Energy (DoE), prospective biodiesel producers have cautioned that continued legislative uncertainty could cripple the fledgling industry.

The ‘Regulations regarding the mandatory blending of biofuels with petrol and diesel’, which were gazetted on August 23, 2012, and would come into effect on October 1 this year, were formulated to control the mandatory blending of bioethanol or biodiesel with petrol or diesel to produce a biofuel blend that would be sold in South Africa.

According to Section 3 of the regulations, all petrol and diesel supplied to a petroleum blending facility must allow for the blending of biofuels with a minimum concentration of 5% for biodiesel and 2% for bioethanol.

The Draft Position Paper on the South African Biofuels Regulatory Framework, which governed the pricing and subsidy mechanism of the biofuels industry, was subsequently gazetted on January 15, 2014, with pledges by the DoE that it would publish the Final Position Paper by May or June last year.

After this deadline was missed, the department then committed to publishing the draft document by the end of December last year.

“Unfortunately, to date, the document has still not been published and stakeholder engagement by the DoE has dwindled substantially.

“Investors and prospective investors in the fledgling sector are increasingly frustrated at the lack of progress; keeping in mind that the Industrial Biofuels Strategy was published in 2007 with the ‘pilot phase’ targeted for 2013,” prospective biofuel producers Mabele Fuels, Clean Tech Africa and PhytoEnergy said in a joint statement last week.

The DoE had also failed to respond to several requests from Engineering News Online for clarity regarding the draft paper’s expected publication date.

The companies added, meanwhile, that construction on their respective biofuels projects could only start once the final regulations had been published.

“The October 2015 target [thus] cannot be met owing to the 18- to 24-month construction period required for commercial-scale biofuel plants. The entire biofuels industry and associated benefits to South Africa, may be jeopardised if the final regulations are delayed further,” the producers noted.

Mabele Fuels, Clean Tech Africa and PhytoEnergy each had licensed biofuel production projects with all applicable construction permits in place, while a further five biofuel licensees were at various stages of project readiness.

According to the producers, a potential biofuels industry would represent substantial potential capital investments in rural areas, driving job creation, rural development, black farmer development, improvements to South Africa's balance of payments, expanded crop production and improvements to air quality.

In addition, the bulk of biofuel projects incorporated combined heat and power systems into the design and were capable of exporting any excess power to the national electrical grid.

“Government has repeatedly called on the private sector to do more to improve the plight of ordinary South Africans and investors in the biofuel sector have attempted to do exactly that, but government needs to fulfill its commitments as well.

“The fledgling biofuels industry calls upon the DoE to urgently publish the Final Position Paper, and start the subsidy application process,” the companies appealed.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

Comments

The functionality you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION