Major sugar cane growers in South Africa are prospering. Tongaat-Hulett, one of the major sugar producers in southern Africa, reported a 47% increase in operating profit to R470m ($67m) in 2006. Like other sugar cane producers, the company operates in the eastern part of South Africa, radiating from the province of Kwazulu Natal. It is one of the few sugar cane producers that has decided to invest in the ethanol business by building an ethanol plant, though this will be located in Mozambique. Other more local plants could eventually follow.

“South Africa is exporting sugar on a regular basis, and this should be our initial choice for ethanol feedstock,” says Remi Burdairon, manager of commodity trader Louis Dreyfus, which may also take a stake in local biofuels production. Ethanol could be a major earner for South Africa’s sugar industry, which is the 13th largest in the world.

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Big opportunities

All roads are open to biofuels producers. Maize, sugar cane, soya and lesser-known crops are all possibilities. Agricultural companies are poised to act on a big opportunity, as the South African government says it wants biofuels to make up 4.5% of the nation’s fuel (75% of its renewable energy target). It wants an 8% and a 2% blend for bioethanol and biodiesel respectively and is open to different types of crop.

But as industrialists, politicians and farmers consider the future, delicate questions need to be addressed. Which land is most suitable? How should it be used? Could the cultivation of land for biofuels encroach upon food production or create pressure on arable land, thus perhaps jeopardising the livelihood of small-scale and subsistence farmers?

Good land in a hot country likely to be affected by climate change is precious. According to national statistics from the agricultural department, about 13% of South Africa’s land surface is arable. However, only 3% (equivalent to 22% of total arable land) benefits from high-potential, rich conditions. In addition, there is a good deal of degraded land that could be improved.

The future is maize

Joe Kruger, managing director of Ethanol Africa, argues that maize is the way forward. There are about 9000 commercial maize producers as well as thousands of small-scale farmers in South Africa, which produces 8.8 million tonnes of maize on average per year.

The company plans to open eight ethanol plants, primarily using maize feedstock. The first will open in Bothaville and the last is due to be commissioned in 2012. All will be located inland in the central and eastern part of the country.

“South Africa is a major consumer of maize; it is a large industry but it has shrunk locally in the past few years as consumer patterns have changed and people eat different types of food,” says Mr Kruger. This, he suggests, is creating more maize availability, which can be diverted for fuel production.

There is currently a three million-tonne surplus of white maize that he says could be switched to the yellow maize suitable for ethanol feedstock. Hence, he believes that land use does not need to be increased to accommodate maize production for ethanol.

It could be an attractive proposition. Many European countries are mandating biofuels content, but there is not enough local production. Japan and South Korea, too, could be important export markets for southern Africa. Japan alone could be importing about 75% of the world’s fuel ethanol in 2012, according to statistics provided by Ethanol Africa.

At the same time, North American demand for maize for ethanol production has been creating a tight maize market.

But Mr Burdairon, whose company trades in a range of different commodities including maize and soya bean, counsels against counting on maize. “Even until two months ago, the possibility of maize industrial production for ethanol was highly questionable. Up until now, the market has been very much in balance. Yes, it is becoming more viable, but it has been dangerous as a prime feedstock up until now,” he says.

Sugar’s example

Mr Burdairon points to the sugar industry. Whereas the maize track record is variable, sugar production in South Africa has consistently produced a surplus that has in turn been sold overseas or in neighbouring African countries.

There is further potential for sugar production but this could create its own problems, as sugar plantations often absorb heavy amounts of water. However, Brazil:UK:Africa: Partnership on Bioethanol Scoping Study, which

was published in July 2006 on behalf of the UK Office of Science and Innovation, found clear possibilities emerging for the Southern African Development Community. An increase in bioethanol production, it said, could come about by improving yields in current sugar cane crops, diverting some production from food to fuel and also increasing sugar cane cultivation.

Sugar cultivation, it said, could be more than doubled to 1.5 million hectares in the region over the next 10-15 years. Although some of this could be in South Africa, the possibilities for expansion are limited there and other countries show more promise. However, South African gasoline consumption makes up 80% of the whole region and the development would therefore act as a major response to new South African ethanol demand.

Meeting needs

If this land usage were doubled, sugar cane production would meet more than twice the current regional sugar consumption while also creating 7.3 billion litres of bioethanol each year. It is an attractive option, because the sugar cane-bioethanol fuel chain “has the potential to be among the lowest cost and lowest carbon dioxide fuel chains”, according to the report’s authors.

There are currently about 47,000 registered sugar cane growers producing an average 22 million tonnes of sugar cane per year, and more than 45,500 of these are small-scale growers, according to the South Africa Sugar Association. About 80% of production comes from larger commercial players. Since land extension possibilities are limited, however, most supply increases for ethanol would need to be found from yield improvements or from the annual surplus, or from land consolidation/plot aggregation.

Pilot success

Some pilot projects have shown that this system has worked to a limited extent: “Production has risen to 70 tonnes per hectare, far higher than non-organised small scale farming, where 30 tonnes per hectare is the average, but not as high as commercial farmers who average 120 tonnes per hectare,” say Annie Sugrue and Richard Douthwaite in a 2006 report on land use.

Ms Sugrue, the South African co-ordinator for the international NGO Citizens United for Renewable Energy and Sustainability (CURES), warns against “huge mono-cropping”, especially of maize: “We don’t believe it shows a good energy balance – we’re completely against it and any possible competition with food.”

Instead, she promotes the use of perennial crops, including jatropha, moringa (a tree which produces no waste as all its parts can be used) and two local plums. Jatropha, the tree cultivated by biodiesel company D1 Oils in southern Africa, can generate 2.5 tonnes of biofuel per hectare in comparison to soya, for instance, which averages 0.8 tonnes per hectare.

Sustainability campaigners favour the use of intercropping, which enhances productivity, and they propose the development of food forests that include different types of plants (trees and bushes) as well as species. These plantations also offer advantages to local communities by helping to stabilise and improve land over time.

Simon Wilson of the African Sustainable Fuels Centre is working on a biofuel project for the Renewable Energy and Energy Efficiency Partnership (REEEP), a global organisation promoting the development of clean and sustainable energy. REEEP is funding several biofuels projects in Africa. He says: “Agricultural energy production has the potential to conflict with a large number of other natural resources, not just land area.” Increased agricultural production of food and energy crops together will undoubtedly increase the use of many agricultural inputs, including water, fertilizers and agricultural chemicals, and these increases may result in impacts to the production system itself through loss of fertility, soil biodiversity and availability and quality of water.

Realising benefits

On the other hand, he argues that “by integrating energy crops into food production systems, several social and environmental benefits may be realised, such as the diversification of agricultural output and energy supply, rural development as well as benefits to the health of productive land”.

Local issues are on the agenda. The government has opted for a policy which considers small-scale farming needs, and forthcoming land reforms will also help. But perhaps there is no need for biofuels at all: “Europe will import, but 30% of our people don’t have energy,” says Ms Sugrue. Instead she suggests that biogas, which would be used locally, might be a more suitable option.

Glynn Morris is a facilitator at REEEP.