HomeIndustry SectorsGenerationSA oil refineries have until 2017 to upgrade

SA oil refineries have until 2017 to upgrade

Two huge cooling
towers at the Sasol
oil refinery
Cape Town, South Africa — ESI-AFRICA.COM — 10 March 2011 – Crude oil refineries in South Africa have until 2017 to upgrade their plants, the country’s energy minister said on releasing new draft fuel specifications in Africa’s largest economy.

“South Africa wants less cancer-causing benzene and sulphur in its fuels as it seeks to reduce the health and climate impact of dirtier fuels within two years,” said energy minister Dipuo Peters.

“We are now reducing the allowable levels of benzene, which is a known carcinogen, from 5 to
1 %,” Peters said.

Besides public health concerns, South Africa “’ a net importer of fuels and the continent’s worst polluter “’ also wanted to reduce its greenhouse emissions. “We are therefore reducing the level of sulphur in our fuel 500 parts per million to 10 parts per million,” Peters said.

The low levels of sulphur would allow for the introduction of engines that spew less carbon dioxide emissions, complementing a carbon tax introduced by finance minister Pravin Gordhan, and likely to hit company profits and consumers.

South Africa wants to clean up its liquid fuels industry further after previously prohibiting the addition of lead into all grades of petrol and reducing sulphur in diesel.
Four crude oil refineries, operated by Shell and BP among others, need to invest up to US$4 billion on a cleaner fuels upgrade, but have demurred over uncertainty regarding the cost of reconfiguring refineries.

The South African Petroleum Industry Association, which represents major oil companies, has been in talks with the government on the rollout of new Euro 4 or Euro 5 fuel specifications, but has said it wants a cost-recovery mechanism before investing in upgrades.

“There are approaches that can be considered including differentiated taxes, which create an advantage for high-quality fuel,” Peters said.