14 December 2006
Cabinet has approved the Draft Biofuels Industry Strategy, to be released
for broader stakeholder consultation. This will involve workshops and meetings
at both national and provincial level, and consultations with organised
industry, farmers, communities, non-governmental organisations (NGOs) and
provincial government departments. The Draft Strategy was developed through a
consultative intergovernmental Biofuels Task Team, which comprised of 12
national government departments, which are the National Treasury, Science and
Technology, Trade and Industry, Land Affairs, Agriculture, Water Affairs and
Forestry, Public Works, Provincial and Local Government, Presidency, Transport,
Environmental Affairs and Tourism, and chaired by the Department of Minerals
and Energy.
The Draft Strategy informed by a detailed feasibility study proposes a 4,5%
biofuels industry development in South Africa and this will achieve 75% of the
country's renewable energy target. The strategy is based on the national
blending specifications of eight percent for ethanol (E8) and two percent for
Biodiesel (B2). The following existing crops were confirmed as potential crops
to satisfy the country's biofuels production, namely, Maize and Sugar
(Ethanol), as well as Soya bean and Sunflower (Biodiesel). 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, which
will further increase the country's production levels. There is no intention in
the draft strategy to exclude any crops or to plan variety for development of
the biofuels industry.
The draft strategy proposes a mandatory blending of biofuels with
petroleum-based fuels, by fuel producers and refiners, to allow for market
development. Whilst in some provinces the biofuels industry has huge potential,
it is acknowledged that in other provinces much work will have to be done, to
grow crops best suited for their respective environment.
The draft strategy proposes that the existing fuel levy exemption for
Biodiesel be extended to Bioethanol, and this be based on the energy content. A
hedge fund similar to the Equalisation Fund is proposed to deal with situation
of low and high crude oil prices. The proposal is that during periods of high
international crude prices the biofuels producers will pay some money back to
the National Treasury and during times of low crude prices the biofuels
producers will then receive some government protection.
The biofuels task team will report back to Cabinet in May 2007 on the
outcomes of their consultations. The draft strategy is available from the
Department of Minerals and Energy and will be available on the departmental
website (http://www.dme.gov.za) from
Friday, 15 December 2006.
Enquiries:
Sandile Tyatya
Chief Directorate: Clean Energy
Tel: (012) 317 8585
Cell: 082 465 6080
E-mail: Sandile.Tyatya@dme.gov.za
Ms Bontle Mafuna
Chief Director: Communication
Department of Minerals and Energy
Tel: (012) 317 8086
Fax: (012) 322 4954
Cell: 082 571 4310
E-mail: bontle.mafuna@dme.gov.za
Issued by: Department of Minerals and Energy
14 December 2006
