Neels Blom
31 July 2007
Johannesburg — THE government will not be able to develop biofuel legislation this year that would set out policy on biofuel production because consultations were still taking place, Science and Technology Minister Mosibudi Mangena said yesterday.
He was speaking at the 26th annual International Society of Sugarcane Technologists' congress in Durban.
Mangena said the contribution of carbon emissions from the combustion of fossil fuels and the fact that global demand for crude oil was consistently outstripping its supply meant that alternative supplies for the world's fuel needs would have to be found.
The government has suggested that the biofuels industry would be considered as a market for subsistence farmers who would produce feedstock to produce bioethanol. Mangena acknowledged, however, that SA was water-stressed and the use of valuable land for fuel feedstock production would have to be carefully weighed against food security .
"We don't want to do something foolish," he said.
SA has no biofuels industry of any significance, although the country exports about 45% of its sugar crop, which is a potential source of biofuel. The South African sugar industry produces 2,5-million tons of sugar a year.
The government's focus in agricultural development was largely on transformation through agrarian reform. In this the sugar industry had contributed widely by helping to establishing communities of small growers. However, Mangena was not yet able to comment yesterday on the degree of support the government was considering providing to emerging and subsistence farmers for the production of biofuel feedstock.
He said various stakeholders from the departments of minerals and energy, agriculture and land affairs, and from environment and tourism were still making inputs. The parliamentary subcommittees on biofuels were expected to report by the end of the year, he said.
Earlier in the congress, which is being held under the auspices of the South African Sugar Association, biologist and biofuel entrepreneur Paul Zorner said that recent year-on-year demand for crude oil had been growing at 2,2% against a historical demand of 1,6%. The demand for transport fuel was expected to be 50% greater by 2030 that what it was today.
Zorner quoted Jeffrey Currie of U.S. financial services consultancy Goldman Sachs as saying that a price of $95 a barrel of crude was likely this year, unless the Opec oil cartel unexpectedly lifted production. "Oil production is past its peak, though," said Zorner.
Apart from fuel prices, the economic viability of a biofuels industry would depend on the cost and availability of raw feedstock, government regulation and the efficiency of conversion technology.
Zorner said that at an oil price of $40 a barrel (a price not seen for years), biofuel market penetration of 10% could be expected. At $50 a barrel the penetration of 30% could be expected. "However, a price of more than $60 a barrel for the next three decades is likely."
Zorner said the U.S., which was by far the world's biggest fuel consumer, had passed legislation last month that would see the use of ethanol for transport fuel increase sevenfold. That would increase world consumption of ethanol three times.
He said biofuel produced from maize provided no carbon dioxide mitigation relative to that of petrol. However, cellulosic and sugar-cane based ethanol reduced carbon dioxide emissions 80% relative to petrol .
The debate about whether SA should favour maize-ethanol production over sugar-ethanol production was not settled, Mangena said. Maize ethanol was considered as an option because of its accessibility to small and subsistence farmers.
Ethanol has been presented as one of several alternative fuels that would reduce the world's carbon emissions, which are largely deemed responsible for global warming and an expected climate change.
Zorner proposed the production of sugar cane for its biomass qualities, rather than for sugar, to produce ethanol from cellulose. This would require a high level of technology, using enzymes to break down cellulose.
He said that in biomass production, sugar cane was the most productive crop on the planet which, through indirect fermentation using enzymes produced by termites, for example, could be converted into energy. Zorner said the technology to transform biomass into fuel existed and that it was about six to eight years away from commercial viability.
Although none of the economic models Zorner developed for this production process depended on subsidies, it would require "heavy global investment" to drive innovation. The biggest hurdle was financing the initial large refineries, he said.
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