JOHANNESBURG: Phyto Energy International Holding AG said it will only proceed with a plan to build a R5-billion ($419-million) plant to convert canola into diesel in South Africa if the government passes laws needed by the industry.
The plant, which will produce 400 000 metric tons of diesel a year when complete, could start output in the third quarter of 2017 if the nation passes planned laws mandating the blending of biofuels into motor fuel. While the regulations are supposed to come into effect on October 1 this year, the government has yet to take the necessary step of publishing a position paper, Herisau, Switzerland-based PhytoEnergy said.
“The government keeps on postponing the final regulation and thereby endangers the whole biofuel industry,” Petrus Fouche, chief operating officer of a South African unit of PhytoEnergy, said by email on Tuesday.
The plant will need about 1.1 million tons of canola a year, according to Wandile Sihlobo, an economist at Pretoria-based Grain SA, the country’s biggest grain farmers’ association. That’s nine times 2014’s production of 123 500 tons, all of which was consumed by the food industry. Canola is used in margarine and as a vegetable oil.
