A pre-feasibility study conducted over the last few years by Sasol in close cooperation with CEF indicated potential for commercial-scale production of soy-based energy if supported by appropriate fiscal incentives.
Sasol said its interest in the project was part of its continuous improvement values and would allow it to diversify its energy mix.
“International experience has shown that many socio-economic benefits accrue from biofuel production, including job creation, foreign exchange savings and strengthening of the rural agricultural economy,” Sasol Nitro managing director Bernard Klingenberg said this week.
CEF and Sasol signed an agreement yesterday to investigate potential locations for the proposed plant, which has a planned biodiesel production capacity of 100,000 tonnes per annum.
The two companies estimate the plant will require half a million tonnes of soy annually to meet the production target.
CEF’s involvement in the project will be managed by its new Energy Development Corporation division, specifically set up to focus on renewable investment opportunities that have the potential to benefit disadvantaged communities.
“We are confident that a large-scale, commercial biodiesel facility will create an excellent opportunity for meaningful incorporation of emerging farmers into the supply chain. It will also give impetus to Government's White Paper on the Promotion of Renewable Energy,” said EDC general manager Manny Singh.
The new feasibility study is expected to be completed by the end of the year, verifying the project’s viability and assisting in site pre-selection.