National Biofuels Study
A select national committee from US academia and industry have spent more than a year analyzing the complicated issues of biofuels and as a result, have compilated The National Biofuels Study Report. This is deemed a controversial, complicated and crucial task – the development of biofuels on a commercial scale in the US poses an enormous challenge. This National Research Council study committee has released a 2011 report that helps define the questions and next steps.
Precisely due to the fact that the South African Government must also create a favourable regime, it is necessary to justify whether the costs of the regime are warranted by the benefits of biofuels. The benefits, and costs, must include full costs and externalities, as well as addressing social and environmental aspects hence the necessity for the South African National Biofuels Study Report .
The objectives of this study are to determine:
1) Is a biofuels industry in South Africa justified?
2) If so, what magnitude and nature thereof is optimum?
3) What incentives and regulatory environment is needed to support the creation and ongoing operation of such an optimum size industry, and in an optimal manner, so as to maximise the national benefits?
South Africa has adopted a policy to support development of renewable energies and to investigate economic options that factor in externality costs and benefits, namely social and environmental aspects. To that effect, fiscal incentives have been provided for biodiesel, and the intention is to extend this to bio-ethanol (and other renewable energy alternatives). This study has shown that such support is justified, at least in the short term, to establish a (sustainable) biofuels industry.Download the report here