An entrepreneurial endeavour to produce sulphur-free diesel commercially has elevated Pietermaritzburg as the hub of the country’s nascent bio-fuel industry.
An initial consignment of 60 000 biodiesel will go on sale to an expectant market with most of the fuel already spoken for. The popularity of the biodiesel was fuelled by the highly positive feedback of users, many of whom had participated in the development of the product, said Darryl Melrose of Biodiesel SA.
“We have been experimenting and testing the biodiesel for the past five years and through our research and development, have come up with a commercially viable formula,” he said. Biodiesel is totally compatible with ordinary diesel and can be used unadulterated or in any ratio to the fossil-derived variety without modifications to conventional diesel engines.
Melrose pointed out that the original diesel engine was in fact designed to run on vegetable oil and was developed in response to concerns that the fuel industry was being monopolised and that steam engines were inefficient. “Rudolf Diesel who, at the Exhibition Fair in Paris in 1898, demonstrated his engine that was powered by peanut oil and thought a biomass fuel represented the real future of his engine and hoped it would provide a way for the smaller industries, farmers, and common folk to compete with the industries that controlled all energy production at that time,” he said.
Biodiesel is also completely natural, renewable and biodegradable that reduces the risk of ground-water pollution and also offers impressive lubricity qualities. “Lubricity refers to the penetrating ability of biodiesel that exceeds that of any mineral fuel, which means it is actually good for a diesel engine,” he said.
Melrose started to distill biodiesel as a means to deal with the used cooking oil generated by Rigson Chips, a snack food business that he had started after leaving Simba Chips seven years ago. “The results of the first efforts to produce biodiesel were very encouraging and persuaded me to investigate the technology further,” he said.
The fuel proved hugely popular and won over users for a variety of reasons, according to Melrose. “Apart from being exceptionally environmentally-friendly, it also improved some of the unsavoury aspects of conventional diesel, including reducing the amount of the characteristically black exhaust smoke,” he said.
The quality of the fuel compared favourably with mineral diesel and exceeds the requirements for automotive diesel laid down by the South African Bureau of Standards, according to Melrose. “The specifications outline several parameters such as appearance, colour, density, and viscosity, among others, and I’m happy to say the biodiesel either meets or exceeds the criteria,” he said.
Of particular relevance is the C-tane of 57 that exceeds the minimum value stipulated by the SABS of 37. “This figure determines the performance of the fuel and the higher the value, the more efficient the fuel is,” Melrose said. The biodiesel breakthrough has been hailed by government that, for obvious reasons, has embraced the renewable energy ethic.
According to Melrose, government actively supported efforts to develop a domestic fuel industry that included the extension of tax incentives. “We’ve had incredible support from the national department of energy and mineral affairs as well as the national treasury that had gone out of their way to encourage the industry,” he said.
Five years later, and Melrose is gearing up to pump the first-ever commercially available biodiesel with official support and in full compliance with the law.
“We have established a small network of distributors who will supply the fuel to the market without incurring the kind of overheads a conventional filing station faces with the intention of passing on the savings to consumers,” said Melrose.
The fuel will be sold at a highly competitive pricing in a bid to encourage consumers and will attract Vat (value added tax). “The Vat requirement is at the behest of government and is probably an interim measure until such time that a comprehensive pricing mechanism for bio fuels can be determined,” he said.
Several transport companies have taken up quotas for the fuel with an unspecified amount destined for interested members of the public. “While we are keen for the fuel to be used by industry, we are also keen for it to be accepted by the average consumer, in this case motorists, who drive diesel-powered vehicles,” he said.
With demand certain to outstrip supply, Melrose was confident of a highly positive prognosis despite the vagaries of the fuel industry. Initial estimations suggest a modest 8% profit margin on a commodity that is driven by volume sales. “The retail price of the biodiesel to some extent will be determined by the fluctuations of conventional diesel, but we expect out turn-over to increase rapidly once we’ve established a market presence,” he said.
However, the business expects to achieve a highly favourable return on investment that, to date, amounts to about R350 000 in the distillation plant. “We’ve managed to set up Biodiesel SA without bank finance by cross-subsiding its establishment through Rigson Chips,” he said
Melrose went to great lengths to explain that biodiesel was an alternative to fossil-derived diesel that in no way should be seen as a challenge to the established fuel industry. “The fact of the matter is that biodiesel is produced in limited quantities and that it is highly unlikely to ever meet the growing demand for fuel,” he said.
