in brief in the news By Jacques Claassen
GREEN ENERGY
Sugar industry sets its sights on production of bio-jet fuel
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The generation of green energy could become a game-changer for the local sugar industry. n line with its value chain master plan, the sugar industry plans to SAFs are low-carbon, non-petroleum-based drop-in aviation fuels come up with specialised services and products, including sustainable which are generally produced from bio-based feedstocks, including aviation fuels (SAFs) for visiting jets that have to refuel once they waste, residues, and end-of-life products. New technologies are also have touched down in Johannesburg, Cape Town or Durban. being developed to produce SAFs from non-biogenic resources. This is according to Richard Nicholson, who was an SA Cane Regarding biogas production, Nicholson points out that it’s an Growers panellist in an Agri SA-Farmer’s Weekly webinar recently. opportunity that provides a value proposition for the diversification of Since a sharp drop in sugar sales within the Southern African Customs the sugar industry by adding value to waste – both on-farm and on an Union in the 2017/2018 season, the industry has made slow but industrial level at sugar mills. steady progress to regain lost ground. The industry’s Once the excess fibre of sugar cane has been crushed and attempts to bolster demand came amidst washed it results in a watery waste mixture from which the introduction of a “sugar tax” in 2018, solid leftover fibre, called bagasse, is separated. From which made sugar roughly 200% more a cost and return point of view it will be better to expensive for the sweetened beverage generate biogas rather than steam energy from manufacturers, who then switched to bagasse, which is a renewable source of energy. artificial sweeteners. Says Nicholson: “Biogas could complement Moreover, the local industry had solar and wind energy. Moreover, it potentially to deal with excess production offers a more flexible source of green power, around the world as a result of while it could provide a source of local gas for subsidies, a problem with dumping South Africa’s integrated resources plan of and a drop in recent years in the 2019 and reduce the country’s dependency on so-called recoverable value (RV) imported gas with its associated price volatility.” producer’s price for sugar cane. The The sugar industry would like to pursue latter has subsequently recovered these two energy production options, which to R5 000 per tonne for 2020/2021, will require large-scale investments as well as which is just higher than the R4 931 of further research and innovation. “Although I’m a the 2016/2017 season. Meanwhile the bit concerned about the financial performance of international sugar price has also shown an the country’s sugar mills in recent times, they do have increase. industrial capacity. However, these options will have to be Says Nicholson: “We’re looking for markets for our pursued by the entire industry, including growers. Proceeds excess production of 6m to 8m tonnes of sugar cane. of additional industry products like electricity will have to be “We’re looking for The co-generation of electricity following President divided between growers and millers,” says Nicholson. markets for our excess (Cyril) Ramaphosa’s recent announcement of increasing Two of the industry’s 14 mills were mothballed or shut down production of 6m to the power generation cap to 100MW for independent during the 2020/’21 season. However, Nicholson concludes or private producers presents opportunities to the sugar that pursuing these two options might be a turning point for industry despite cash constraints.” companies who have been exporting sugar at a loss. “The In acknowledgement of the sugar industry’s important industry’s decision makers just need a good investment case.” ■ tonnes of sugar cane.” contribution to SA’s economy, the government and other editorial@finweek.co.za stakeholders devised the industry master plan to address some of its current production and marketing dilemmas. Following its adoption in November 2020, the plan has already resulted THE SUGAR CANE INDUSTRY IN NUMBERS in a positive give-and-take approach between producers, manufacturers l Sugar cane production – 18.2m tonnes (2020/2021 season) and retailers. The modest recovery in the producer’s price can be l Sugar production – 2m tonnes (2020/2021 season) ascribed to the plan’s positive spin-offs. l Local demand – 1.4m to 1.5m tonnes Having considered seven possibilities for globally competitive value l Dependent livelihoods – 1m chain diversification, a task team concluded that the production of l Direct jobs – 75 350 l Indirect employment – 350 000 bio-jet fuel or SAFs, as well as the generation of biogas are currently l Gross industry revenue – R17.5bn (2020/2021 season) viable options offering the most promise. l Land under cane – 362 000ha SAFs, unlike biofuel for local road transport, is considered a l Support to domestic value chain – R400m per year. premium product driven by international market demand which currently far outstrips supply, good margins, and incentives. Moreover,
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finweek 23 July 2021
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