Africa Journal (Washington, DC)
Katherine Constabile
28 July 2007
Washington, DC — 2007 might as well be called "the year of climate change and biofuels." As the U.S. and EU ramp up their ethanol production and Brazil sets the stage for leadership in the field, sub-Saharan Africa plays an increasingly important role. Many sub-Saharan African countries, primarily South Africa, Angola, and Mozambique might soon become leading biofuel and carbon credit suppliers to world markets.
Sub-Saharan Africa's emerging biofuel industry serves the interests of developed markets on many levels, most notably by providing an alternative to hydrocarbon dependence. Industrialized countries subject to the Kyoto Protocol Greenhouse Gas Emissions caps can also meet their emissions reduction targets through Clean Development Mechanisms (CDMs).
CDMs award credits to companies that invest in energy efficient projects in developing countries.
The current portfolio of 800 CDM projects worldwide includes very few biofuel-oriented projects. Private and public sector institutions such as Agrinergy and the United Nations Conference on Trade and Development (UNCTAD) are currently working to streamline the CDM biofuel approval process, which will enable industrialized countries to facilitate biofuel projects in Africa for their benefit. Increasingly, Africa will be a frontier for developed nations to diversify their energy supplies and attain carbon "neutrality."
Brazil, China, and THE EU As sub-Saharan Africa moves to take part in the budding global biofuels boom, Brazil, China, and the EU are taking steps to help develop the industry on the Continent. Brazil leads this effort. The country's pioneering investments in Africa's biofuel industry derive from a commitment to South-South cooperation and Brazil's own interest in diversifying its supplies and creating worldwide biofuel demand. Brazil has technical cooperation agreements in agriculture with both Angola and Mozambique, which allows for easy development of the agriculture biofuel feedstock industry in both countries. China seeks to participate in the agriculture and biofuel craze, while the EU needs to reach its target that 5.75% of vehicle fuels be renewable by 2010. If the EU tries to reach this target from supplies in Europe alone, one quarter of the Continent's land would be covered with biofuel crops. No one wants that.
Brazil's national oil company, Petrobras, recently teamed up with Italy's premier energy firm Eni to explore African biofuel sources to export to Italy. The companies are currently looking to collaborate on the construction of biodiesel plants in Brazil, Angola, and Mozambique.
Petrobras' likely accord with Eni is only one of many biofuel projects in Africa sponsored by Brazil. In late 2006, Embrapa, Brazil's leading government body for agriculture and biotechnology research and the world's leading institution for tropical research, created a satellite office in Ghana's capital, Accra. The office is one means through which Brazil will provide technical assistance and technology transfers to countries looking to develop biofuel industries. Already, Embrapa Africa has engaged Angola to help develop that country's soybean biofuel industry, and Mozambique, to bolster biofuel research capacities in the country's Institute for Agrarian Research. China is partnering up with Embrapa to provide the infrastructure such as road, railways, and waterways necessary to bring the fuel to markets.
Angola is slated to be Petrobras' most critical destination for biodiesel production, and Mozambique for ethanol. Both countries are large, with relatively small populations and thus, thousands of hectares available for biofuel crop growth. Angola has one of the largest non-forest agricultural lands in the world, even taking into account lands that can't yet be tilled due to landmines and that are already tilled for food purposes. The country's biofuel export potential is estimated at approximately six exajoules of bioenergy per year, the equivalent of 2.7 million barrels of oil per day (bpd).
Mozambique is widely hailed as the most promising hub for biomass production in Africa, with production capacity of up to 6.7 exajoules per year, the equivalent of three million bpd or one billion barrels per year. The country's suitable agroclimatic and agro-ecological conditions can facilitate the growth of a wide variety of energy crops. The Mozambican government would like to pursue biodiesel from jatropha and ethanol from sugar cane. Both feedstock have significant growth potential in Mozambique, and aren't significant sources of food for the population, which will help to avert the heated "food versus fuel" debate.
Mozambique's often praised governance and emerging agricultural infrastructure make the country an ideal destination for Brazil's expansion.
The EU is piggybacking on Brazil's leadership and has expressed commitment to diversifying its own energy resources, as outlined in its 2006 Green Paper, "A European Strategy for Sustainable, Competitive, and Secure Energy." Working together with Brazil, the EU will facilitate and fund a biofuels task force in South Africa to fast track South Africa's industry.
Ethanol: South Africa leads the way Ethanol Africa, a South African company, is slated to construct Africa's first ethanol plant in Bothaville, South Africa. The project requires a $1 billion investment, the seed financing for which will be provided by the asset management company, Sterling Waterford. The plant will be maize-based, drawing from the maize surplus in the Free State. According to Ethanol Africa, the Bothaville plant is a prototype that will be replicated in eight other plant projects in the country. The company is also pursuing ethanol opportunities in Zambia, Mozambique, and Angola.
Biodiesel will likely be the dominant biofuel coming out of sub-Saharan Africa for the near term. Only politically stable African countries will follow in suit, due to the large investments required for ethanol plant construction. An average sized ethanol plant costs approximately $85 million to build. Ethanol production requires much more investment than biodiesel, which can be produced relatively cheaply on a small scale.
Due to Mozambique's relatively stable political and investment climate, the UK is presently seeking to construct an ethanol plant in the country.
Beyond "Food vs. Fuel" The biofuel market is frequently discussed as a glossy and politically correct substitute for oil. Yet, increasingly, economists and leftist leaders express fears that biofuel cropfeed such as sugar, cassava, maize, and soybean, will compete with food needs. This "food vs. fuel" debate is particularly prescient regarding Africa, where food supply is already unpredictable in many countries. Food industry analysts fear the introduction of the profitable and value-added biofuel market will lead many farmers to sell crops to biofuel producers instead of to local food markets, and the cropfeed biofuel market will increase the price of food.
In spite of the fears expressed, the launch of the biofuel market in Africa will also help to alleviate food insecurity as a result of technical assistance provided to farmers, lead to infrastructure improvements, and spur income generated by biofuel sales. The development of Africa's biofuel industry is in fact a means through which political will can grow for agricultural development in Africa.
There is much greater political support and investment for biofuels than there is for agriculture. Countries such as China, Brazil, and EU nations will invest in irrigation and cultivation technologies to attain high crop yields. Such technologies will entail the development of irrigation systems from deep water tables, the establishment of new crop varieties, and the reconstruction of degraded soil. Small-scale communities will likely be able to take advantage of these technological improvements, particularly if the projects are registered as CDMs, which require projects to benefit the economic development of surrounding communities.
A less common but equally farsighted criticism for Africa that accompanies the biofuels discussion is the risk such fuels pose to regional water supplies. Sugarcane in Brazil for instance evaporates approximately 2200 litres for every litre of ethanol produced. For drought-ridden areas of sub-Saharan Africa, this number is staggering.
However, there are solutions to the problem, many of which may benefit the Continent. Again, water capture and irrigation technologies are often neglected areas in African development, as they require significant investment and technological capacity. Since developed nations benefit from the biofuel craze, political will and financial support to capture and recycle food water and tap into deep water tables will likely emerge. In addition, rainmaking techniques such as those utilized in Thailand and seawater-irrigation could also draw attention from researchers.
The path toward biofuels With the billions of dollars invested in the Continent's prospects in just this past year, Africa as a biofuel frontier seems inevitable. As with oil and mineral resources, international firms looking to exploit the vast climatic and agronomic potential in countries such as Angola and Mozambique cannot be stopped. However, the increased political will to produce biofuels yields immense trickle-down effects. The benefits to the countries at hand include a deployment of Africa's agricultural potential, real investment into irrigation technologies, and lasting land-based infrastructural developments. Biofuel criticisms should be addressed through pragmatic solutions. Nonetheless, the frontier has launched and will, if managed with foresight, yield increased trade, investment and food security on the Continent.
Katherine Constabile is an Africa Associate at the Eurasia Group with a primary focus on Lusophone Africa. She has worked with Citibank, the UN Food and Agriculture Organization (FAO) in Mozambique, the US Federal Trade Commission (FTC), the UN Development Program (UNDP), and the ecological science division of UNESCO.
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