South Africa’s sugar industry is interested in turning a shuttered oil refinery into a plant producing fuel ethanol from sugar cane.
Ethanol production is one of the avenues the industry has been exploring to diversify production away from sugar, which is in global overproduction.
The Engen refinery in Durban has been closed since a fire and explosion in 2020. It had a production capacity of 120 000 barrels per day.
The South African Sugar Association (Sasa) is in talks with Engen Petroleum to repurpose the refinery for fuel blending, Moneyweb reported.
“We cannot share a lot of information at this stage, but we can confirm that we are having conversations about that possibility,” Portia Mpofu, Sasa’s external affairs director, told the publication.
Brian Tait, Sasa’s energy consultant, said the sugar industry could produce up to 750 million litres of ethanol annually, which could meet around 8% of South Africa’s total fuel demand of approximately 10 billion litres per year.
However, Tait explained that the manufacturing cost for bioethanol was higher than the imported cost of petrol, which the Minister of Mining and Petroleum Resources has set as the fuel-ethanol price.
“Until that is resolved it is unlikely that anyone will be able to manufacture biofuel competitively,” he he said.
The sugar industry said its diversification initiatives would succeed under a regulatory framework similar to strategies implemented in India and Brazil.
Help may be at hand. Engineering News reported that a petroleum sector master plan would be completed in the coming financial year.
The information was given to parliament during a presentation by the mineral and petroleum resources department on how refinery closures had affected the security of the country’s fuel supply.
Deputy director-general Tseliso Maqubela focused on the other closed Durban refinery, Sapref, sold to the government for R1 last year by its former owners, Shell and BP.
“We need to build a refinery, whether it’s at Sapref or elsewhere,” he said, “[and] we can’t have a Sapref that comes back at 180 000 bbl/day. Sapref must come back at 400 000 bbl/day or more,” he stated.
Agriculture minister John Steenhuisen told Business Day that South Africa urgently needed a biofuels strategy.
“Given the fact that there are now targets being set internationally by airlines and shipping companies on the percentage of biofuels, we need to get moving on biofuels. We’ve spoken about it for 10 years, and biofuels provide an absolutely excellent opportunity for our sugar-cane producers,” he said.
