The industry has been given assurances that sugarcane is included in the government’s new biofuels programme as one of the feedstocks. In another promising development earlier this year, the Department of Trade and Industry (the dti), commissioned a diversification study in KwaZulu-Natal, one of the two sugarcane growing provinces in South Africa, to be undertaken by the Council for Scientific and Industrial Research (CSIR). Diversification, which is viewed as a medium to long-term solution, has become even more urgent given the current precarious situation in which the industry finds itself.
The study is focusing on renewable energy-related diversification opportunities that will assist the industry to harness the full value of sugarcane. The diversification opportunities that are investigated include cogeneration of electricity, production of biofuels, and production of biogas for electricity production. The project aims to conduct a technical analysis of the three business cases within the energy sector into which the sugar industry could potentially diversify.
The three business cases are:
The CSIR is planning to complete the final close-out report on this comprehensive sugar diversification study by July 2019. This is the culmination of years of the industry’s concerted effort to tap into other products from sugarcane. Currently, sugar is the only product from cane and the Sugar Industry Agreement (SIA) stipulates as such. For diversification to take place, the SIA will have to be amended accordingly. But what is of critical importance is the conducive and enabling policy and legislative framework in order for diversification to get off the ground, as well as the government subsidy.
There is consensus from all stakeholders (government and Parliament) that the industry must pursue diversification so it can have other streams of income. Diversification has become even more necessary in the wake of the “sugar tax” (the Health Promotion Levy – HPL) which has left the industry reeling… losing more than a billion rand in revenue in just one year! Speaking at last year’s South African Sugar Technologists’ Association Congress, Trend Translator and Future Finance Specialist, Bronwyn Williams, stressed that companies or organisations had to adapt or die. “The sugar industry should consider how it can leverage its intrinsic strengths, systems, products and processes into entirely new industries. Growing sugar for ethanol rather than for food is an example of a previous ‘pivot’ in the sugar industry,” said Williams.
The industry is also engaging major players in the biofuels space. Recently, the industry had a meeting, at the behest of the American Embassy, with the United States Grains Council which is visiting numerous countries to better understand the challenges, position and potential opportunities for ethanol production in their respective regions. The United Sates is an abundant producer of ethanol, producing up to ~ 60 billion litres of ethanol by the year 2017. They are now ready to meet foreign market needs through developing markets and enabling trade for this renewable clean-burning fuel globally.