Sasol will need to spend approximately R7 billion to meet the new environmental standards set for fuel, said Sasol chief executive, Pieter Cox.

Sasol will need to spend approximately R7 billion to meet the new environmental standards set for fuel, said Sasol chief executive, Pieter Cox.

In the group’s annual report, Cox said that while the new environmental standard for fuel, effective from 2006, would be welcomed, this major investment would not generate the sort of return that is expected from other projects.

"On the upside, however, the new selective catalytic cracker would generate additional large quantities of monomer feedstock ethylene and propylene,” Cox said.

"These envisaged monomer and polymer expansions, costing about R6 billion, will yield high returns after 2006, and will counter the impact of the investments undertaken for Sasol Synfuels."

"The major Project Turbo (the fuel initiative’s ) expenditure, revolving primarily around an estimated investment of R5,5bn to install a selective catalytic cracker, will have to be incurred over the next three financial years," he said.

It will also pave the way for additional investments in the lucrative area of polymer production. He said Sasol's synthetic diesel "already meets the more stringent 2006 specifications for the sulphur content of diesel".

"The international trend towards developing and marketing cleaner liquid hydrocarbon fuels is a welcome development for the sustainability of our planet," said Cox.

"In the case of liquid fuel producers, however, this pro-environmental advance will require major capital expenditure."

Cox said that it was expected that government would introduce stricter new legislation in January 2006, in line with new international environmental trends to stop the production and sale of leaded petrol and high-sulphur diesel.