Ethanol production suspended as company runs out of storage space

DELAYS in enacting legislation to compel fuel companies to blend petrol with ethanol have adversely affected operations at Green Fuel's Chisumbanje plant. In an interview before the tour of the plant on Thursday, Green Fuel group general manager Mr Graeme Smith said they were sitting on 10 million litres of ethanol and had been forced to suspend production after running out of storage space.

"At the moment, we are not producing. We have 10 million litres of ethanol at our storage facilities in Harare and we have run short of storage space because ethanol sales volumes are not moving," he said.

Since October last year, Mr Smith said his organisation had sold two million litres of ethanol.

"Our sales are not moving the way we want them to be. The majority of the service stations in the country do not have separate tanks to hold blend petrol. The service stations can only hold two kinds of fuel that is petrol and diesel.

"Government is yet to enact the legislation to compel fuel companies to blend petrol with 10 percent ethanol.

"When we started the project, we hoped the Government by now would have put in place the legislation but that has not happened," he said.

He said Green Fuel could export the commodity to countries in Sadc but the Government was yet to give them the green light to do so.

Ethanol production in Chisumbanje is a national project expected to reduce the country's fuel import bill.

Before the suspension of operations, Green Fuel had the capacity to produce 160 million litres of ethanol annually against Zimbabwe's annual fuel requirements of 320 million litres.

Blend petrol is relatively cheaper and few service stations with the commodity are selling it at $1,36 per litre compared to petrol whose price ranges between $1,38 a litre and $1,50 per litre in rural and urban areas.

Mr Smith said the offtake of ethanol project was low because the hectarage under sugarcane at their agriculture divisions â€" Chisumbanje and Middle Sabi Estates was still limited.

"Currently, we have planted 3 500 hectares of sugarcane at Middle Sabi and here (Chisumbanje estate) 4 000 ha are also under sugarcane."

Chisumbanje estates covers 40 000 ha while Middle Sabi has 10 000 ha.

The intention of establishing the ethanol plant, Mr Smith said in the long-term, was to completely substitute petrol product, a development that would save foreign currency for the country.

"Ethanol is not a new technology and it has been used before. Any vehicle can run on up to 20 percent blend."

The $600 million Chisumbanje ethanol plant was built using the Brazilian model and is a joint venture between the Agricultural Rural Development Authority (Arda) and MacDom, which is the parent company for Green Fuel.

In a separate interview from Rusape, Arda chairman Mr Basil Nyabadza said they were now waiting for the Government to regularise the blending procedures making it mandatory for all fuel companies to blend petrol.

"As we speak, we are not working. We are waiting for Government to come up with the necessary support that will compel fuel companies to immediately blend," he said.

He said as a result of work stoppage at the plant and the estates, the sugarcane that had reached the prime stage was likely to lose its value.

Mr Nyabadza said the Government needed to urgently resolve the blending procedures for companies in the fuel industry in order to save jobs.

"More than 4 000 people are employed in Chisumbanje as a result of the ethanol project. Chipinge District is ravaged with drought and as a company, we are putting mitigatory measures for people in the district by employing them," he said.

Efforts to get a comment from Energy and Power Development Minister Elton Mangoma were not successful as his mobile was not reachable.