Biofuels in South Africa – Current Situation

Two recent stories are I think indicative of where South Africa is in the biofuel market.

Sasol recently discussed their succeeding in being listed in the Dow Jones sustainability world index and gave an overview of their focus.

 

from: Engineering News
(click image for full story online)

 

On the biodiesel project they have been publicising with the Central Energy Fund for some years now they stated that “there is not a very certain government framework at this point in time, which makes finalising a decision not very easy” even though the crude price is multiples of what it was in the beginning!

A recent article highlighted the discontent of commercial maize growers with the South African Governments decision to only allow the production of ethanol from excess maize.

from: Business Day
(click image for full story online)

 

These two stories reinforce what was obvious at the time the Biofuels Strategy was being actively developed – no one was going to be able to make a profitable business out of it without significant subsidisation from government.

The concern is that South Africa can now move away from first generation biofuels, but Africa seems to be getting deeper involved although the constrains are obvious.

The article below by the US Department of Agriculture at the end of 2007 has a good overview, but concludes that maybe there is still room for government to adjust its position. This has apparently not happened to date.

Republic of South Africa Biofuels Situation Update – Get more Legal Forms

Africa Biofuel – Tanzanian biofuel company

Africa Biofuel and Emission Reduction Company is focussed on bringing a triple-bottom-line biofuel business model to Africa.

 

from: Africa Biofuels
(click image for full story online)

 

Africa Biofuels set out to find a biofuel process that did not compete for a food or use agricultural land. It looked for a product that could actually enhance the environment and benefit the people of the area.

It identified Croton megalocarpus, an indigenous tree, as its focus.

There is detailed discussion of the project under the explanatory and news section of the website that promotes its arguments in detail.

In a quick scan and search I was unable to identify how the byproducts (oil cake and glycerine) are to be used and what income they will generate. This “income” and the cost of manual collection from wild trees are critical to the viability of the process. In fact I not find any costing or economics on the site but am taking that up via email.

Little Logic in This Ethanol Support

In an interview with green2tech

 

from: Earth2Tech
(click image for full story online)

 

Jeff Broin of ethanol producer Poet said the following

8). In the great debate over how much corn ethanol is affecting food prices, what do you think about some newer reports that have said biofuels have affected food prices significantly?
Every study depends on the assumptions of its author, and the opponents of renewable fuels have been able to generate a few that say what they want. Almost every independent study I’ve seen has said that ethanol production has had a very small impact on the consumer’s price for food, especially in comparison to the impact of rising energy prices.

A study from the Agricultural and Food Policy Center at Texas A&M said, “The underlying force driving changes in the agricultural industry, along with the economy as a whole, is overall higher energy costs, evidenced by $100 per barrel oil.” Just do the math. A semi can haul 4,200 boxes of corn flakes at a time, and with 10 ounces of corn in each box, that’s a total of 46.9 bushels of corn. At a $6 bushel, the corn in all 4,200 boxes has a value of $281.40. To haul those boxes 1,500 miles, however, would cost $881.25 with diesel priced at $4.70 per gallon. That means it takes 21 cents of diesel per box to get it to the store, yet the value of corn in that box is less than seven cents. What do you think is the real driver of higher food prices?

But this study surely has nothing to say about biofuels not pushing up the price of food? In fact what would the fuel cost have been if the truck was run on biodiesel?

Its also flawed in that the calculation is for $100 crude & $ 4.70 / gallon diesel – even at $50 crude and the corresponding diesel price of $ 2.86 / gallon (extrapolated from GasBuddy data) the diesel cost is still 13 cents. This is a of food retail and consumer demands not fuel costs!

 

from: GasBuddy
(click image for full story online)

 

Lets not even start calculating the packaging cost and the wholesale and retail margins!