14 March 2007

The Cabinet has approved a plan to establish a biofuels industry that is expected to attract R-6 billion in investment. The plan, which will be funded by government and private investors, could create 55,000 jobs and meet 75% of the country's renewable energy requirements by 2013, the Cabinet said recently. A task team would submit a more detailed plan to Cabinet in May.

South Africa is following the led of the US, Brazil and some European countries, which have encouraged investment in ethanol plants to combat high crude oil prices, diversify fuel supplies and reduce carbon dioxide emissions. Brazil, the UK and the EU would help South Africa develop the industry, energy minister Buyelwa Sinjica said on October 30. The task team might propose compelling fuel retailers to blend motor fuels with a certain proportion of biofuels or ethanol and could propose subsidies if a fall in the crude oil prices made the plants unprofitable, said Nhlanhla Gumede, from the department of mineral and energy affairs.

Source: Star business report 8/12/06 - adapted from Anthony Sguazzin