Big plans for ethanol ignore fears
Businessman Billy Rautenbach has big plans for his Green Fuel biofuel company, despite the controversy dogging the government's decision to blend fuel without conducting adequate research or consulting stakeholders.
Green Fuel and the government are being taken to the Constitutional Court by a motorist, Tabani Mpofu, who is the first to test the legal validity of blending fuels.
Last year the government unilaterally introduced the mandatory blending of unleaded petrol and ethanol" first at a ratio of 95% unleaded petrol to 5% ethanol" before increasing the ethanol component to 10% and then 15%.
This was despite the concerns of motorists and car manufacturers" who cannot guarantee that these levels of ethanol will not damage vehicles. The government now says it will take the blending proportion to 20% by March.
Companies linked to Rautenbach's "Rating and Macdom Investments" are involved in a joint venture with the state-owned Agricultural Rural Development Authority to grow sugar cane in Chisumbanje, Chipinge.
The cane is sold to Green Fuel which manufactures ethanol and is the sole supplier for blending fuel. A Green Fuel investment vision document says that 9 500ha of land is under cane but the plan is to expand the project almost fivefold.
The total investment vision
"The total investment vision is to develop 46 000ha of land for commercial cane (approximately 10 000ha at Middle Sabi and 36 000ha at Chisumbanje)", according to a section on land development.
The document does not say how land for expansion will be acquired.
The document also says the company is planning to build at least four ethanol manufacturing plants "with an annual capacity of 1.5-billion litres to meet Zimbabwe's domestic requirements and export the balance to the external regional markets while co-generating 120 megawatts of electricity”.
Green Fuel public relations manager Lilian Muuangani did not respond to questions.
After placating Chisumbanje villagers who were up in arms over the company allegedly grabbing their land, Green Fuel may face a flood of other legal challenges.
In his court application, Mpofu cites the Zimbabwe Energy Regulatory Authority (Zera) as the first respondent, the ministry of energy and power development as the second and Green Fuel as the third.
Claims of constitution violation
Mpofu through his lawyers, Tendai Biti Law, is seeking an order to declare mandatory blending null and void as he claims it violates the Constitution.
Elton Mangoma of the Movement for Democratic Change, who was the energy minister during the unity government and resisted mandatory blending at the time, has provided a supporting affidavit and has made himself available to testify in court.
During his tenure as minister Mangoma argued that Zimbabweans should be able to choose the fuel they want and that public policy could not be made to benefit "one individual", referring to Rautenbach.
In his affidavit, Mangoma said Green Fuel did not have a joint venture with the government and said he was aware that Zera had been forced to issue a licence without following legal procedures.
"I am aware that the first respondent has reports in which it makes it clear its reservations against any blending beyond E10 [10% ethanol].”
In his application, Mpofu said his freedom of choice and his right to fairness had been violated. He said he has no desire to use blended fuel.
'Serious breach of rights'
"Depriving me and others like me the right of choice over the fuel I use in my car is a serious breach of the rights I have protected under the Constitution," he said.
He said chapter four of the Constitution guarantees the freedom of choice and fairness.
"I also believe that my right to equal protection and benefit of the law as guaranteed by the Constitution of Zimbabwe has been breached. Clearly the actions of the first and second respondent have treated me and others like me in a manner inferior to the incredible treatment afforded to the third respondent [Green Fuel]," he said.
Mpofu argued that no independent studies were done to establish the safety of ethanol for vehicles.
"I am astounded that, before anyone had studied or evaluated the impact of E5, the amending regulations are now fast-tracking the introduction of E10, E15 and E20. There is no explanation for this accelerated movement and, in the absence of such, the inescapable conclusion is that the whole motive is that of profit and greed.”
In his papers, Mpofu also accused Green Fuel of abusing its "captive monopoly position” to overcharge. He said the international price of anhydrous ethanol is 60c a litre but Green Fuel retails its product for 95c. He also questioned why fuel dealers can only buy ethanol from Green Fuel.
Breaches of the mandatory blending regulations
Mpofu also lists several breaches of the mandatory blending regulations, among them that a licensed ethanol producer must be in a joint venture with the government.
"I am advised and have reason to believe that, as of August 2013, the government of Zimbabwe and the third respondent had executed no such joint venture agreement.
"The current blending is thus being done not in accordance with the law. The former minister of energy, Elton Mangoma, has pretty much stated this publicly … Minister Mangoma was a lawful Cabinet minister until August 2013 when the president was sworn in. He was thus minister at the time the licence was purportedly issued to the third respondent.”
An interview that Mangoma gave last month to a local daily newspaper is attached as an annexure to the court papers. In the interview, he said the government position was that the producer of ethanol should be public in nature so that the benefits accruing from mandatory blending would accrue to the majority of Zimbabweans, and he suggested that Rautenbach had been favoured.
Energy Minister Dzikamai Mavhaire refused to speak to the Mail & Guardian and referred the newspaper to the ministry of information.
In his application, Mpofu added that all the respondents had failed to tell motorists about the effects of ethanol, which could cause damage to some cars. He said that in some countries that use blended fuel, the public is told which vehicles can use it and at what percentages. Australia is cited as an example.
Advice from motoring companies
He said advice from motoring companies, including Nissan Zimbabwe, which wrote to Zera on November 8 last year advising against the use of higher fuel blends, was ignored.
A letter written by Nissan Zimbabwe's after-sales manager is attached to the application. In it he warns that "any use of an ethanol blend higher than 10% will render Nissan products' fuel systems unwarrantable".
Mpofu also argued that his fuel bill had risen sharply since the introduction of blended fuel as ethanol is 12% to 25% less efficient than unleaded fuel" hence the government could not argue that there was a cost benefit to the motorist. Zera did not respond to questions.