The South African biofuels industry on Monday welcomed the government’s approval of a draft biofuel strategy, to be fine-tuned in consultation with the industry.
”This is an enormously positive step for the development of a local renewable fuel industry, which is welcomed by all involved role players,” said Fanie Brink, managing director of Biofuels Industry Development.
”It is in the best long-term interests of South Africa, especially in terms of a larger market for all grain and oil-seed producers and specifically the development of emerging producers.”
Brink said in a statement that the Cabinet had approved the draft biofuels strategy in December 2006.
A biofuels task team is expected to report back to the Cabinet in May on the outcome of consultations with industry.
Brink said the strategy will enable South Africa to reduce dependence on imported crude oil and to combat global warming.
He said the proposed mandatory blending of biofuels with petroleum fuels to establish a local market for biofuels is one of the most crucial components in the biofuels strategy and is in line with international developments.
”The draft strategy proposes a 4,5% biofuels industry development in South Africa and this will achieve 75% of the country’s renewable energy target of over a billion litres of biofuels by 2013.”
Brink said the strategy is based on the national blending specifications of 8% ethanol (E8) with petrol, and 2% biodiesel (B2) with diesel.
The biofuels industry could develop into a multibillion-rand industry and contribute to economic growth.
Earlier, the Department of Minerals and Energy said consultation on the ”Draft Biofuels Industry Strategy” would involve workshops and meetings with organised industry, farmers, communities, non-governmental organisations and provincial government departments.
The industry welcomed the introduction of a tax rebate on bio-ethanol of 40%, the same as for biodiesel, and the establishment of an equalisation fund to protect biofuel projects from low international crude-oil prices.
The draft strategy is available from the Department of Minerals and Energy and on its website at www.dme.gov.za — Sapa