Future fuels and the coming ethanol revolution: Is Sasol facing technological redundancy?

With the rise of Greta Thunberg, the Extinction Rebellion and public awareness, the voices against fossil fuels continue to grow, but while the overwhelming pressure is for countries to move away from coal to meet their demand for electricity, little attention has been given to other aspects of the fossil fuel value chain.

The transport and chemicals sectors remain highly reliant on fossil fuels. Emissions from the transport sector are still on the rise in most places. Aviation alone accounted for 20% of total global oil demand growth in 2018. According to the International Energy Agency (IEA), petrochemicals will account for over a third of the growth in crude oil demand by 2030 and almost half by 2050.

Renewable ethanol (from biogenic and non-biogenic sources) could be an important part of the solution to reduce greenhouse gas emissions from the “more difficult to decarbonise” segments of the transport and chemical sectors. Produced in sufficient quantities, while following adequate sustainability criteria, it has the potential to disrupt the use of fossil carbon in the liquid fuels, chemicals and materials sectors by providing a low carbon alternative energy carrier or versatile intermediary for many processes that currently rely on coal, mineral oil or natural gas derivatives.

The most sustainably produced ethanol can lower transport emissions by up to 80% compared with fossil fuels, either blended with petrol in cars or processed into jet fuel for aeroplanes. (Conversely, ethanol produced unsustainably can cause even greater emissions compared to fossil fuels!)

In addition to its use for transportation fuels, ethanol can also be dehydrated to produce the base chemical ethene, replacing its fossil-based equivalent in the manufacture of many other chemical products eg plastics, solvents, detergents, cosmetics, textiles, paint and coolants. Coca-Cola, Heinz and Johnson & Johnson are already using sugarcane-ethanol derived polyethylene in their packaging, made by Braskem in Brazil.

Most ethanol produced in South Africa has very high associated emissions. The largest producer is currently Sasol, with 285-million litres of non-renewable ethanol per year resulting from their coal to liquid process via Fischer-Tropsch (FT) synthesis.

By contrast, most renewable (first generation) ethanol produced around the world today is based on fermentation of sugars derived from food crops such as corn and sugar cane. South Africa currently produces 120-million litres of such ethanol per year, mostly for the liquor industry.

Production of ethanol from sugarcane could easily be expanded in South Africa. The South African Cane Growers Association (SACGA) estimates that if the sugar that is typically exported to world markets below production costs is diverted for ethanol production, 700-million litres of ethanol can be produced per annum, without having to plant a single extra hectare (thus avoiding the direct land-use change emissions associated with land conversion).

Second-generation technologies expand this potential much further. South Africa can produce about 1.5-billion litres of ethanol from fermenting waste gases in the steel and ferro-alloys industries alone. This has been made possible by carbon recycling through microbial engineering. The first such ethanol plant in South Africa could be a reality in two years’ time, with a significant potential to scale up.

Lignocellulosic waste offers another excellent feedstock for the production of renewable, low-carbon ethanol. As the Bioenergy Atlas highlights, South Africa has an abundant source of lignocellulosic feedstocks (agricultural and forestry wastes, garden waste and invasive alien plants) awaiting beneficiation. There are a number of possibilities for this. Existing sugar mills have the potential to upgrade their systems to produce second-generation ethanol from bagasse (a waste product of the sugarcane crushing processes) through biochemical conversion, raising ethanol production levels from conventional first-generation processes.

Another option for lignocellulosic waste is thermally treating it to produce a bio-synthetic gas that can be then converted to ethanol either via the traditional Fisher-Tropsch process used by Sasol, or through microbial digestion.

There are significant opportunities in South Africa for such sustainably produced ethanol.

Up to 500 million litres would be required per annum to meet the proposed biofuel blending mandate of 2%, depending on the contribution of biodiesel. Following approved production pathways, up to 50% of conventional jet fuel could be replaced with sustainable aviation fuel, much of which could be produced via the alcohol-to-jet pathway using ethanol as intermediary. At OR Tambo International Airport alone this means a billion litres of sustainable aviation fuel or up to 1.8-billion litres of ethanol. This figure could increase to 2.2-billion if we consider the jet fuel requirements at all South African airports, leading to an interesting prospect of catalysing a whole new bio-economy and job creation linked to South Africa’s traditional agricultural and biomass resource sectors.

If produced domestically, this will also save considerable amounts in imports of oil or SAA having to hedge fuel prices adding additional burden to its already stretched balance sheet.

While sustainably produced ethanol could be part of the interim solution for lowering the carbon footprint of ground transportation, in the longer term, cars and light-duty vehicles have other options. Electric vehicle use is soaring worldwide, with a million electric cars sold in 2017 bringing the total number of electric vehicles in the world to three million. In South Africa, VW, BMW, Nissan and Jaguar are working to push the electric vehicles agenda.

The aviation industry, on the other hand, is likely to remain almost entirely reliant on energy-dense liquid fuels for the foreseeable future as technology is not moving fast enough. The chemicals sector is also likely to need hydrocarbons in one form or another, so a renewable version of it seems like the obvious solution for the time being.

Despite representing an important opportunity, ethanol is still not the big commodity that it should be in South Africa. As with all new ways of doing business, this requires policy support and private sector appetite for change. Adopting the modest proposed blending mandate could be a good first step towards a thriving ethanol sector and the diverse value chains that can be created around it.