PhytoEnergy Plans Biofuel Exports as South Africa Delays Rules

  • Biofuel plant capacity to start at 200,000 tons a year
  • Capacity possibly doubled if South Africa requirements passed

PhytoEnergy International Holding AG will export biofuel produced from canola and reduce planned capacity at a plant it’s building in South Africa after the country delayed introduction blending regulations.

Rules making blending of biofuels in diesel and gasoline compulsory were expected to come into effect on Oct. 1. The Herisau, Switzerland-based company’s South African unit decided to revert to a plan to export production to Europe a day after the anticipated deadline passed.

“We originally intended to do that anyway," Chief Executive Officer Jochen Schwaiger said by phone. After discussions with the government about how some output could be used for domestic consumption, PhytoEnergy waited three years for the regulations that would require it, he said.

The company cut the cost of the plant to 3 billion rand ($208 million) from an
earlier estimate of 5 billion rand for annual capacity of 400,000 metric tons.

PhytoEnergy’s revised capacity for the plant, to be located in the industrial development zone at Coega in the Eastern Cape province, is 200,000 tons annually, Schwaiger said. Production could be doubled to meet South African demand if blending laws are realized.

The company will own 35 percent of the plant, while South Africa’s Public Investment Corp., the continent’s biggest money manager, will hold 25 percent. Black investors will control 30 percent and the African Development Bank 10 percent.