Fuel switch to cost SA billions
FUEL SWITCH TO REDUCE EMISSIONS: South Africa currently uses E2 grade of fuels though switching to the current European standard of E5 will allegedly cost R41-billion.
Johannesburg - Switching to a more environment-friendly vehicle fuel would cost South Africa's oil refiners billions, MPs were told.
Thamsanga Mohlomi, in a meeting with parliament's environmental affairs portfolio committee, said: "It will cost R41-billion to change our refineries to refine to the level of E5," transport ministry special adviser on climate change.
E5 refers to the percentage, in this case 5%, of ethanol blended into petrol, and is the European standard. South Africa currently uses E2 fuel, containing 2% ethanol. Ethanol, a form of bio-fuel, is produced from crops such as sugar cane and maize.
MERCY OF INDUSTRY
According to Mohlomi, switching from E2 to E5 would create a 40% reduction in vehicle greenhouse gas emissions. "If you use the same type of fuel in industry, for power generation, that can also add another 40% reduction of the greenhouse gas emissions that are there at the moment."
Speaking to Sapa after the briefing, Mohlomi said there were about 15-million vehicles operating in South Africa, about four million of them in Gauteng alone. When asked about the cost, Mohlomi said: "That's what we got from the industry; they said the cost was about R41-billion."
Mohlomi told members of parliment there was "resistance from the oil industry to upgrade their refineries". He later defined this resistance as "purely financial" and added: "Everybody can see the benefits of moving but now they're (the industry) complaining about the huge investments they need to make."
The department of transport has dubbed the switch as "a flagship programme". Mohlomi said government was "at the mercy of the industry, because they have to make the investment".
Asked if there were plans to make such a switch mandatory by imposing a deadline, Mohlomi responded: "Not immediately; we're not looking at that at the moment."
The department preferred to offer incentives and was holding talks with the Treasury on measures such as tax relief. Its vision was to move towards the E5 standard, as used in Europe.
Mohlomi said: "It's a drawback for us to still be using the E2 standard."
He said South Africa's transport sector, one of the country's largest sources of greenhouse gases, contributed 9% to total emissions. Reducing this by 40% or more would represent "a big shift" in greenhouse gas emissions, Mohlomi said.
The Automobile Association said fuel worth about R30-billion was sold for road use in SA in 2010.