Johannesburg - South Africa is encouraging the use of biofuels such as ethanol and biodiesel in order to cut down on greenhouse gas emissions, which contribute to global warming.
But the government is dragging its feet in coming up with the legislation that would regulate the biofuels industry.
This emerged at this week's Biofuels Africa 2007, an annual gathering of role players in the entire biofuels value chain that brings together regulators, feedstock providers, project developers, financiers and investors to thrash out challenges and provide opportunities that exist in the biofuels sector.
Irene Finnegan, chief chemist at Bioservices, warned that the absence of biofuels legislation, the lack of chemical skills in the industry and the reluctance of small and medium producers of biodiesel to adhere to quality standards was tainting the image of the industry as a whole, even before it could become mainstream.
Finnegan said there was a need for a concerted effort between the public and the private sectors to develop critical skills in the local biofuels industry.
She acknowledged that the biofuels industry was still new in the country but said the lack of relevant scientific skills was hampering the technical development of the sector.
"None of the current biodiesel producers are chemists or have employed qualified chemists at their plants despite the fact that the biodiesel sector is a chemical industry. The sector as a whole suffers from a shortage of relevant chemical skills," she said.
Madi Ramsamy, the chief executive officer at Siyanda Biodiesel, disagreed that there was a crippling shortage of technical skills in the sector.
'Problematic area'
"I don't think we'll have a skills problem because the manufacturing process of biodiesel is very similar to that of fossil fuels. Obviously, we'll have to train people in the plants in order to increase the pool of technical skills in the country," he said.
Biofuels are plant-based liquid fuels that have the potential to reduce the quantities of greenhouse gases which drive global warming. They are also touted as beneficial to the environment as they are a renewable product that reduces pollution from the oil and petroleum industries.
Ramsamy said it was important for commercial producers of biodiesel to keep off-spec biodiesel from entering the marketplace in order to build consumer confidence in the product, noting that at the moment there were no commercial producers of biodiesel in South Africa.
"We're not producing biodiesel for commercial purposes at the moment. But there are people who are producing it in their backyards and that could be a problem in the long run," he said.
Finnegan said legislation is needed to instil investor confidence and quality assurance in the sector.
"We need some sort of legislation in minimum testing. It's a problematic area if it's not regulated soon. Basic tests need to be conducted to ensure the safe use of biodiesel," she said.
Biodiesel can be tested on a batch basis, and the testing cost per litre largely depends on the size of the biodiesel batch. The current cost at the South African Bureau of Standards is about R5 000 for the full panel of tests on a 10 000-litre batch of biodiesel.
Finnegan said local producers were avoiding laboratory cross-checks because of the high cost of testing. As a result, the local producers were not keeping biodiesel and biodiesel blends on specifications.
'Lack of testing'
"The lack of testing is largely due to the cost because profit margins are low. However, many small manufacturers are lacking in knowledge about the specification and how it can in fact help them improve their product," said Finnegan, whose company conducts two-thirds of biodiesel testing in the country.
South Africa was the first SADC country to develop an industrial biofuels strategy in 2005 following a feasibility study by the food, agriculture and natural resources unit on the production of biofuels in the SADC region in the light of rising oil prices.
However, the industry's role players have expressed deep concerns at the government's progress in developing legislation for the biofuels industry. The government was expected to come up with the final draft of the biofuels strategy at the end of June this year.
Industry role players argue that the introduction of legislation in the sector would accelerate growth in the local biofuels market against the backdrop of the booming international trends.
The government's biofuels strategy, which is aligned with the Accelerated and Shared Growth Initiative for SA, contends that the biofuels industry has the potential to create about 55 000 new jobs in rural areas.
The strategy also aims to attract investments worth R6bn to combat high crude oil prices, diversify fuel supplies and lower carbon dioxide emissions.
Petrochemicals giant Sasol announced that it had completed a study on a plant converting soya beans into motor fuels, but was waiting for the government to complete a biofuels industry development plan for it to decide whether to build a biofuel plant in Sasolburg. However, it said the planned biofuels plant would not be viable without industry incentives.
The Eastern Cape government already has plans for a biofuel refinery plant at the East London Industrial Development Zone that is expected to benefit more than 15 000 small-scale rural farmers. The farmers will have to plant a canola crop, which will be refined into biodiesel, in order to reap R1.2bn a year.