An October 1
deadline for the
blending of biofuels
with diesel and
petrol is still on the cards –
although the fuels will have
to be imported because there
are no operational biofuels
refineries.
Hauliers are unable to plan
in order to accommodate
biofuel mixtures in a fleet
running on engines with
increasingly complex and
sensitive fuel management
systems.
The rest of the logistics value
chain is also subject to ongoing
stop-go scenarios.
Refineries announced for the
Coega and East London IDZs
would make use of imported
feedstock initially, while a
refinery touted for Bothaville
would use locally planted
sorghum.
The cabinet approved a
five-year biofuels industrial
strategy in 2007, which allowed
for a five-year pilot phase.
From October 1 this year all
oil refineries will be required
to blend between 2% and 10%
of locally produced bioethanol
into their petrol, and 5% into
diesel.
A levy of between 4.5 cents
and 6.5 cents per litre to offset
the costs of biofuels is proposed
by the Department of Energy,
which published a position
paper in January 2014.
No final regulations have
been published as yet, and the
Department of Energy is not
responding to questions by the
industry.
To date there has been much
talk with little spark when it
comes to investing in refineries
or securing the land required to
grow the feedstock.
The first crops would need to
be in the ground already to feed
refineries ahead of the
October 1 deadline.
Incentives such as a 50%
rebate on general fuel levy for
biodiesel producers and threeyear
accelerated depreciation
have proven insufficient to
attract investment into the
biofuel sector.
Maize is specifically
excluded, which leaves
potential producers having
to look at alternatives. The
government has decided using
sorghum and soybeans will
alleviate concerns around
food security.
This means that proven
feedstock such as rape seed
and canola are being sidelined
in order to revive the
growing of sorghum.
Mass plantings of these
crops would need to be
supported by their own
logistics infrastructure to keep
production costs down and to
transport millions of tons of
feedstock to the refineries.
One ton of soya beans can
be converted into around 171
litres of fuel.
Beans will have to be
transported to the refinery,
and the biofuel from the
refinery and then to a
blending facility – which
requires another process in
the fuel distribution system.
South Africa’s biofuel
industry therefore promises
to power a number of
opportunities for the logistics
and transport sectors.
But the likelihood of the
engine spluttering into life in
2015 seems remote.
INSERT
The likelihood of
the biofuel engine
spluttering into life in
2015 seems remote.
