1 October 2013
South African fuel producers will begin mandatory blending of petrol and diesel with biofuels from 1 October 2015 as the country moves to encourage investment in its biofuels sector and reduce its reliance on imported fuel.
Announcing the date of commencement on Monday, Energy Minister Ben Martins noted that the government had approved South Africa’s biofuels industrial strategy in December 2007, envisaging a five-year pilot phase aimed at achieving a 2% biofuels penetration into the national liquid fuels pool.
However, incentives such as a 50% rebate on the general fuel levy for biodiesel manufacturers and a fuel tax exemption for bioethanol producers had been insufficient to lure investments in the biofuels sector, “hence the need for establishing a more enabling and supportive regulatory framework”, Martins said in a statement.
A Biofuels Pricing Framework would be finalised by the end of 2013, the minister said, and a Biofuels Implementation Committee had been set up to resolve all “practical or operational aspects pertaining to the blending of biofuels with mineral petrol and diesel”.
Biofuels include bioethanol, which is produced from sugar and starch crops such as sugarcane and sugar beet, and biodiesel, which is produced from vegetable oils such as canola, sunflower and soya.
The government has excluded maize, South Africa’s staple food, from use in biofuels production.
The Department of Energy’s chief director for clean energy, Mokgadi Modise, told Members of Parliament in January that eight companies had been granted licences, or provisional licences, to produce bioethanol or biodiesel in South Africa.
South Africa’s biofuels strategy aims to stimulate the production of suitable crops in areas of the country that have been under-used for agriculture.
Modise told MPs that a feasibility study conducted by her department in 2006 had indicated that the production of 400-million litres of biofuels a year in the country could create up to 25 000 new jobs.