Angola seeks to build agro-biofuels sector, SA sugar industry seeks to venture into energy production

SOUTHERN AFRICA – The government of Angola has signed a Memorandum of Understanding (MoU) with Angola’s National Oil, Gas and Biofuel’s Agency (ANPG); Sonangol, the parastatal that oversees petroleum and natural gas production in the country; and Eni Angola, an energy company, to jointly develop the agro-biofuel sector in the country.

Under the MoU, Eni, ANPG and Sonangol will develop a de-carbonization path for the country through a circular economy approach, assessing in particular the development of low-ILUC (indirect land‐use change) cultivations such as castor beans on degraded lands and cover crops in rotation with cereals.

As part of the agreement, the parties will also evaluate business opportunities in the areas of waste-collection, with the purpose of valorizing the organic fraction, and bio-refining.

The MoU is in line with Eni’s commitment to accelerate the energy transition in fossil-fuel producing countries, promoting the integration of the African continent into the biofuel value chain through agribusiness and industrial development initiatives aimed at the production of advanced biofuels, helping the decarbonisation of the transport sector and promoting development opportunities.

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South Africa’s sugar industry seeks to enter the biofuel arena

Meanwhile, South Africa’s sugar industry is in talks with the government over a potential subsidy that could see it convert more than a third of its annual output into biofuel, reports Bloomberg.

Currently 800,000 tons of the industry’s annual output of 2.1 million tons is being exported at a loss, according to the South African Sugar Association.

The discussions follow the signing of the Sugar Master Plan by the government, farmers, industrial users and retailers in the R16 billion ($1.06 billion) industry.

The plan seeks to ease a crisis caused by a flood of cheap imports, much of those from neighbouring eSwatini, and a tax on sugar-sweetened drinks that lowered demand from beverage makers.

Most of South Africa’s sugarcane is grown in the east of the country and the industry employs about 85,000 people. It has been in decline for the past two decades with annual sugar production dropping by almost 25%.

The tax on sugary beverages that came into force in 2018 as a health promotion levy has led to industry losses of more than R3.6 billion, the closure of two mills and almost 10,000 job losses, according to Trikam.

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While the plan includes offtake agreements with industrial users and retailers that helped boost local demand by 14% in the year that ended in March, diversifying uses for the crop could improve the industry’s sustainability, Trix Trikam, executive director of the sugar association said.

“Biofuels is one of the revenue streams that the industry can venture into, provided there is an enabling policy environment and an attractive subsidy mechanism,” he said.

The South African Biofuels Regulatory Framework that was gazetted by the Department of Mineral Resources and Energy in February last year approved sugarcane as a feedstock for biofuels.

Companies that could benefit from a biofuels program include the nation’s biggest sugar producers – Tongaat Hulett Ltd, the local unit of Associated British Foods Plc and RCL Foods Ltd.

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