South Africa is on the right track in its efforts to set up a profitable biofuels industry, said Ernst Janosky, head of agriculture at First National Bank, on Tuesday.
Speaking on the sidelines of the 41st annual Nampo harvest week, Janosky said that for a biofuels industry to be profitable, local fuel prices need to be above R10 a litre.
Last December, the government approved a draft industrial strategy for developing South Africa’s biofuels industry, which could see the state and the private sector injecting R6-billion in capital investment.
According to the draft, the industry could contribute up to 75% of the country’s renewable energy by 2013, without negatively affecting food security.
“For the biofuels industry to become a viable business, that will encourage investments; government needs to implement legislation that will help push petrol prices higher than these levels,” said Janosky.
The petrol price is currently hovering at about R7 per litre, while crude oil — a major component in the making of fuel — is about $62 per barrel. — I-Net Bridge