Posted: 2008-10-06 23:58 The biofuels question  Presenter: Semeyi Zake Guest(s): Norman Ndaba - Click here to listen to the interview Summit TV speaks to Ernst & Young sector head of power and utilities Norman Ndaba about why South Africa is being left behind in the global race to develop a biofuels industry Semeyi Zake: Welcome to Business Q&A. Ernst & Young sector head of power and utilities is Norman Ndaba. Norman, looking at the latest trends and issues in the biofuels industry one of the major concerns about biofuels is the issue of food security and alternative energy - how do we balance the two issues? Norman Ndaba: Thank you for that question. I don’t think we can balance the two for a developing country - for any country for that matter food security is paramount - so we cannot sell down food security for power or energy security in my book. From a balancing point of view it will be very difficult to balance the two… Semeyi Zake: We can’t ignore the impact the rise of the biofuels industry has had on the prices of basic foods… Norman Ndaba: Absolutely. Research has indicated that where biofuels have taken off in some countries food prices have gone up. That’s why from a South African point of view our biofuels strategy for now is suggesting that maize and those double diet food crops should not be part of the mix to produce biofuels. I think that’s the right decision… Semeyi Zake: Looking at biofuels is it an industry we can do without, or do we actually need biofuels here in South Africa? Norman Ndaba: I think we need to have biofuels - from a greening point of view and an environmental point of view the world is going that way. How fast we can do that is the big question, but there is no doubt in my mind that we will have to go the biofuels route if we believe in a sustainable energy environment into the future for our children and children’s children sake - so from that point of view we need to go into biofuels… Semeyi Zake: Another sticky point looking at the biofuels industry is whether it’s commercial farmers who should be producing these crops, or the smaller farming sector that should be producing those crops… Norman Ndaba: In my mind we need critical mass for biofuels - there is a lot of investment. I’m not sure that small scale farmers can kick start the industry. We need the big farming community to take up this challenge together with the oil industry because they cannot do it themselves. Semeyi Zake: You’ve also released a study showing that Brazil has overtaken the US as a producer of biofuels - why is that? Norman Ndaba: There’s a financial meltdown in the US as we all know and credit is tightening there - on the other hand Brazil has enacted legislation that says biofuels will be produced and blended into petroleum products in Brazil in certain ratios and that’s the law. So you have a situation where in Brazil there’s legislation together with incentives - and of course that’s together with their abundant sugar cane and other crops to make the industry viable so Brazil is taking off… Semeyi Zake: Give me some of the similarities that we have between Brazil and South Africa - are there any trends that you foresee unfolding here in our market? Norman Ndaba: I guess the similarity is that we are a developing economy like Brazil - but we don’t have mandatory legislation to force companies to use biofuels, or for the petrol companies or others to produce biofuels - but from a production of crops point of view we have arable land that we can use so we are similar to Brazil in that instance. But I guess from a sugar cane point of view Brazil is far ahead. We have the land - we just need the political will and the commercial arguments to put it all together - and the law to make it viable. Semeyi Zake: Where does South Africa sit in terms of your findings as far as biofuels attractiveness goes? Norman Ndaba: Again because the industry in South Africa is in its infancy and it’s very fragile we don’t do research in South Africa. I don’t have any doubt that if were to do the research for obvious reasons South Africa would come in low against in all the other developing countries let alone the US or the European Union. At the moment we are thinking of a complementary product rather than a substitute, and while people feel biofuels need to go with something else we won’t get anywhere fast. www.summit.co.za Transcripts: 082 962 2772 nb/met Comments Related to this transcript: Comment on this transcript... Name : Email : Comments :