Sasol and the state-owned Central Energy Fund (CEF) have selected Siyanda Biodiesel (Pty) Ltd as their black economic empowerment (BEE) partner in a proposed 100 000 tons per year soya bean based biodiesel production plant in South Africa.

 

Sasol will hold 37.5%, CEF 36.5% and Siyanda Biodiesel 26% of the proposed joint venture company, which must yet be named.

 

Sasol and CEF have also engaged global technology company Lurgi AG to further study the viability of the biodiesel project.

 

“Joining Sasol and CEF as partners in this venture means that we shall share in their knowledge of the petrochemical industry and the construction and operation of large scale industrial plants. We look forward to playing our part in this exciting new industry”, says Madi Ramsamy, CEO of Siyanda Biodiesel.

 

Siyanda Biodiesel is a wholly black owned company with majority female directors. It is chaired by Dr Danisa Baloyi. Formed four years ago, Siyanda wholesales petroleum products and is involved in various renewable energy projects (such as solar, gel fuel and fuel cells) and the agricultural sector, particularly in supporting emerging farmers.

 

“We are already a significant supplier of alternative energy and are pleased to enter the field of renewable energy as part of our commitment to sustainability. We support the South African government's commitment to diversify the energy mix towards renewable energy,” says Sasol Nitro MD Bernard Klingenberg.

 

It is anticipated that a final decision pending possible construction of the plant will be made before year end. If approved, the plant may be located at Newcastle, Sasolburg or Secunda.

 

Klingenberg says, however, that the technology bids were far higher than anticipated, negatively impacting the project economics. This may hold back approval. “Together with Lurgi, we are investigating opportunities to lower capital costs and improve efficiencies. Lurgi AG will only be given the go-ahead for construction of the plant once its viability has been proven,” says Klingenberg.

 

“Because the cost of producing biodiesel is greater than producing diesel conventionally from crude oil, coal or natural gas, European and US governments subsidise its production. Government is aware of the situation and is working on a policy document to stimulate the biofuel industry,” says Manny Singh, general manager of the Energy Development Corporation (EDC), a division of CEF.

 

The proposed plant will require 600 000 tons/year of soya beans to produce 460 000 ton/year of oil cake, a high-protein ingredient in animal feed. While local production of soya beans reached a new record of 424 000 tons this year, the total demand in the country will be about 900 000 tons when the plant is in operation. Significant amounts of soya beans will have to be imported until adequate local production targets are reached.

 

Singh says that Siyanda has already embarked on a campaign among emerging and commercial farmers in Kwa-Zulu Natal and Mpumalanga to develop skills and obtain resources needed for the production of soya beans. More organisations will be contracted in this regard.

 

“Besides building a biofuels plant, our initiative has the additional benefits of helping develop emerging farmers and producing protein for the local animal feed industry,” says Klingenberg.

 

 

 

Lurgi South Africa based in Johannesburg is a subsidiary of the German based Lurgi AG (www.lurgi.com). The Lurgi technology portfolio includes biofuels where Lurgi is recognised as a world leader in Biofuels technology. Its multi-purpose patented technology produces high quality biodiesel (and bio-ethanol) as fuel. Lurgi has 31 biodiesel plants under construction, with a total capacity of more than 4.2 million tons per annum on all five continents. Individual capacities of the plants range between 100 000 and 250 000 tonnes per annum of biodiesel.

 

 

Biodiesel is used both as a blend and as a stand-alone fuel. For instance, B5 biodiesel contains 5% biodiesel, with the remaining 95% made from conventional diesel blends. At the other end of the scale, B100 biodiesel is made entirely from soybean oil. When B100 is used, there is some vehicle performance loss.

 

Sasol intends to blend biodiesel with conventional diesel in very low ratios, probably below B5. This would require no engine modification whatsoever.

 

 

Government has already announced two tax incentives applicable to local biodiesel production: accelerated depreciation and a 40% reduction in the general fuel levy. Announcements on proposed legislation on voluntary blending of biodiesel, which could also be made mandatory, are expected later this year.

 

Government's White Paper on the Promotion of Renewable Energy sets a goal of 10,000 Giga watt hour renewable energy by 2013.

 

 

Sasol-Siyanda-CEF's envisaged biodiesel will be produced through a process known as trans-esterification. The addition of methanol, in the presence of a catalyst, converts the soya-oil into biodiesel and glycerine. Glycerine is used in pharmaceutical, cosmetic and industrial applications.

 

 

Biodiesel could provide an opportunity for South Africa to achieve sustainability in the face of finite crude-oil feedstock, provide markets for farmers requiring greater crop diversity, provide protein for a protein-deficient continent and country, and provide jobs in a country with much joblessness.

 

South Africa imports most of its soya protein (oil-cake) for the animal-feed industry. Soybean production is concentrated in Mpumalanga and the Free State, which account for about 45% of supply, with Kwazulu-Natal contributing another 16%.

 

In Southern Africa, other ideal growing conditions can be found in Zimbabwe, Zambia, Malawi and the wetter eastern parts of the African continent. Every effort would have to be made to create economy of scale by encouraging high-volume production as a means of lowering costs.