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Biofuels

On this page, you can read about:
  • Introduction
  • Biofuels task team
  • Biofuels strategy
  •  

     

    Introduction

    Biofuels - for example bioethanol and biodiesel - are fuels produced from renewable biological resources. The government's White Paper on Renewable Energy [PDF, 2.28MB] has set a target of 10 000GWh of energy to be produced from renewable energy sources, mainly from biomass, wind, solar and small-scale hydro, by 2013. This renewable energy is to be utilised for power generation and non-electric technologies such as solar water heating and biofuels. Much has taken place to move biofuels development forward.

     

    Biofuels task team

     

    In December 2005, Cabinet approved the development of an industrial strategy targeted at creating jobs in the energy crops and bio-fuels value chain. This was viewed as an opportunity to bridge the gap between the first and the second economy. Cabinet also authorised the establishment of a Biofuels Task Team (BTT) comprising of relevant national departments and State entities to develop the industrial strategy. The BTT immediately engaged with interested stakeholders in the first economy to see if it is possible to establish a modest biofuels industry through minor regulatory changes and improvements.

     

    Biofuels Industrial Strategy

    In December 2006 a draft Biofuels Industry Strategy was approved by Cabinet to go for public consultation. The consultation involved workshops and meetings at both national and provincial level, and consultations with organised industry, farmers, communities, non -governmental organisations and provincial government departments.  

    The draft strategy was informed by a detailed feasibility study that was done following literature review and gaps identification.

    The draft Strategy suggested that given South Africa’s climatic condition, agricultural potential, land availability and food security, the country can afford a 4.5% biofuels penetration to the current fuel pool by 2013. The 4.5% percent will contribute to energy security, create 55 000 jobs in rural farming, contribute to economic growth that will see R2 billion per annum added to the GDP and a 75% percent contribution towards meeting the renewable energy target. Biofuels were also identified to be amongst the key drivers of the government program the Accelerated Growth and Industrial Strategy for South Africa (Asgisa) and as a result the development of this industry was recognised as having multiple objectives one of which is economic development in the second economy.

    After the consultation, the biofuels task team reported back to cabinet with a revised draft that incorporates all the inputs from the consultation process. In December 2007, Cabinet approved the Biofuels Industrial strategy with the exclusion of maize and jatropha as feedstock due to food security and environmental concern respectively. View the Biofuels Industrial Strategy.   

    The Biofuels Industrial Strategy has adopted a short-term focus and aim to achieve 2% penetration of biofuels in the national liquid fuel supply, which is equivalent to 400 million litres per annum. This will contribute 35% to the renewable energy targets. The following crops are proposed for the production of biofuels in the country: for bioethanol, sugar cane and sugar beet and for biodiesel sunflower, canola and soya beans. This is based on the existing crop production and proven crops, but the strategy acknowledges that South Africa has to conduct research to develop other crop varieties and second generation technologies which will further increase the country's production levels.

    The strategy also proposes that the existing fuel levy exemption for biodiesel be extended to bioethanol. The strategy proposed that for Biodiesel the levy exemption be increased to 50% and for bioethanol, 100% fuel tax exemption is proposed.

    All production of biofuels will be licensed through the petroleum licensing system in the Department of Minerals and Energy. The Petroleum Products Amendments Act 2005, [PDF], the wholesale, manufacturing, site and retail licence regulations applied to biofuels, and the South African Revenue Services rule amendments to incorporate biodiesel were also promulgated. Apart from the above regulations, all biofuels production should adhere to the biofuels licensing criteria that have been developed by the Biofuels Task Team.

    It is hoped that the biofuels industry will stimulate rural economy, create jobs, help reduce greenhouse gas-emissions and boost foreign exchange.


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