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Insights From South Africa

Last month, I attended the Southern African Biogas Industry Association (SABIA) conference in Pretoria, which provided some very interesting insights into that region’s prospects for our sector.

Delegates from 18 countries, including all the neighbouring nations, attended the event, with the session I chaired on investor strategies attracting around 50 people.  Attendees included representatives from several government departments and officials from bordering countries.

Standing out among very interesting presentations was the one given by Annelize Van der Merwe, Director of the Green Economy Industries initiative at the South African government’s Department of Trade and Industry, who meets with the South African President’s economic advisors every week.  Annelize made it quite clear that developing new industries – renewable energy among them – is a government priority which falls within their Critical Infrastructure Programme. The role of her department is to overcome the hurdles for investment in the country, such as bureaucratic blocks, connecting to the grid and finding suitable locations. They have a one-stop-shop for investors, which is gaining traction, and an ambitious target of $100bn inward investment over 4 years, a quarter of which is already being implemented. A new Green Zone outside of Cape Town has been established for businesses operating in the field of environmental protection/development, with tax rates 50% less than the normal notional rate (usually 28%).

So all good? Well it is a start. As SABIA made clear in their presentations, the subsidies to coal, the lack of competing subsidies to biogas, the confusion over regulations and the fragmentation of these, all make investment in biogas in the country a difficult proposition. But things change and the message from the DTI there is: now is a time to make change happen.  With 30% unemployment the country desperately needs to create new jobs. And regulations recently introduced banning the dumping of industrial food residues to landfills will gradually work their way through into companies searching for ways to treat their wastes legally.

David Newman
President, World Biogas Association

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