Like the I-phone of the consumer telecommunications industry, Biofuels are the most talked about and most anticipated development in the energy sector. The increased attention on the production and development of Biofuels can be attributed to an international convergence of ecological, political, economic and social factors. Biofuels are not new, they have been used since World War II, but the recent biofuel-convergence has led to a boom in investment; over the past three years alone venture capital investment in Biofuels increased 800%. Moreover, the International Energy Agency predicts that biofuel production would double by 2011.
Biofuels help reduce carbon monoxide emissions, can replace the lead addictives used to increase the octane levels of gasoline and are sulfur free. The two most widely used Biofuels today are ethanol and biodeisel. Ethanol is basically an alcohol derived from the fermentation sugarcane or maize and can be used by itself or blended with petroleum. Biodiesel on the other hand is derived from rapeseed, soybean, jatropha, palm oil and other vegetable oils and can be used directly in diesel engines or blended as well.
Africa is usually last on the list of receiving cutting edge technological investments but in the case of Biofuels, Africa is leading the charge.
Africa increased ethanol production from 100 million gallons in 2006 to already over 160 million gallons in 2007. The Mozambique Petroleum Company (Petromoc) is partnering with Brazil based INM International to raise over $400 million to invest in biofuel production. In October, fuel stations in Addis Ababa will begin to sell blended fuel, of which 5% will be ethanol. British based Sun Biofuels Plc has invested $20 million in a 9,000 hectare jatropha biofuel project in Tanzania. In Zambia BP is keen to invest in the emerging Biofuels industry and two other companies have already invested 200 million in the sector, according to the Government. The Indian Government has given $250 million to the West African Development Bank for investment in biofuel production and Nigeria plans to build over two dozen ethanol plants with assistance from Brazil by 2010. As Rachel Slater of the Overseas Development Institute has suggested "Africa's biomass production potential is five times higher then that of the UK" and "massive potential is coming out of South Africa".
South Africa's gasoline consumption accounts for 80% of the entire southern Africa region hence is will be a key entrepôt for the development of Biofuels in Africa. South Africa's Biofuels strategy hopes to achieve a market penetration of 4.5% of liquid road transport fuels by 2013.
Ethanol Africa planes to open eight maize supplied ethanol plants in South Africa; the first has already been commissioned in Bothaville and the last will be commissioned in 2012. According to Ethanol Africa, the typical Bothaville style plant "will displace 987,500 barrels of oil. At a price of $70/bb, this equates to about R500 million and of wealth that will not leave the country". South Africa has great potential for energy crop production such as maize because of the large tracks of arable land and suitable climate, but it is not all good news.
According to Mathabo Le Roux writing in Business Day; in South Africa only 10% of the land is irrigated yet it takes up 65% of total water use, so any increase in large scale maize production would affect South Africa's water supply. Moreover, the head of South Africa's Central Bank Tito Mboweni, questioned the wisdom of using maize as the main feedstock for ethanol production in South Africa "That's a doubt in our case because we suddenly have a shortage of maize ... also pushing the food prices because or production of ethanol from maize." There is an overall fear that the increased use of maize based ethanol feedstock will cause a price increase; putting maize beyond the reach of Sub-Saharan Africa's poor, but as Slater suggests "the world maize price does not correlate well with local prices especially in SSA". For example, according to the United Nations Integrated regional Information Network "South African maize prices have stayed near R600 ($85) per tonne, but in March 2007 increased to R2,000 ($285), still less then the world price of R2,500 ($352)." Although there is a difference between international and South African maize prices, this does not discount the food price inflation.
The Regional Hunger and Vulnerability Program suggested that "In the 12 months between January 2006 and January 2007, the food costs of very poor rural dwellers rose by 9.6% and the very poor urban dwellers by 8.3%. Foodstuffs linked to biofuel production rose by 10.7% (grain), 11.8% (oils) and 12.8% (sugar) in rural areas." Africa is not alone in dealing with the affects of increase biofuel production.
The US government wants to reduce gasoline demand by 20% by 2010 and biofuel use is a key strategy for achieving the goal. Since 2001 the amount of maize used to produce ethanol has increase 300%. According to the Regional Hunger and Vulnerability Program there are presently 78 biofuel refineries under construction; but biofuel production is not the panacea for an environmentally friendly energy consumption strategy for future.
Professor M.A Altieri estimates that dedicating all USA corn and soybean production to biofuel production would only meet 12% of gasoline and 6% of US diesel demand. Moreover, Cornell University professor in the College of Agriculture and Life Sciences David Pimentel, states that "The average U.S. automobile, traveling 10,000 miles a year on pure ethanol (not a gasoline-ethanol mix) would need about 852 gallons of the corn-based fuel. This would take 11 acres to grow, based on net ethanol production. This is the same amount of cropland required to feed seven Americans." The Other Factors There are other factors at play in the debate about Biofuels such as the refining process. Ethanol attracts water much easier then petroleum therefore the same infrastructure used by petrol refineries cannot be used. Hence Biofuels are usually blended near the end of the supply chain. This means that for Biofuels to become widely available a well developed and efficient downstream petroleum sector must exist which may not be the case in many Sub-Saharan African countries.
The environmental questions cannot be ignores either. Although Biofuels produce less carbon monoxide emissions, replace the lead addictives and are sulfur free, there is a loss in fuel economy. According to F. William Engdahl, ethanol contains at least 30% less energy per gallon then normal gasoline translating into a fuel economy loss of 25% per gallon. Food security is the most controversial issue in the biofuel development debate. In short it is the idea of "food versus fuel" or the competition between the world's one billion drivers and the world's two billion poor. As Slater suggests "filling a petrol tank of a Range Rover will require enough grain to feed one person for one year".
As the cost per barrel of oil increases the demand for alternative energy source will increase; and biofuel development from crops such as maize, soybeans and sugar are seen as a viable solution. Hence a situation is rapidly developing whereby the price inflation of the world's key food crops will be pegged to the price of oil, and because Biofuels will continue to be an insignificant source of energy when compare to diesel or gasoline we can expect a continue increase in food prices for the foreseeable future, as biofuel refineries absorb the world's surplus grain production.
This year increased maize demand for ethanol was partly to blame for the increase in price of Mexico's basic food: corn flour. In February 2007 thousands of Mexicans marched in Mexico City to protest the 400% increase in Tortilla prices. The key cost in ethanol production is the price of feedstock such as maize and sugar; hence there will be a move towards economies of scale to improve margins and yields which will favour large scale farmers over small growers, especially in Sub-Saharan Africa.
Moreover, large scale maize and sugar farming will lead increased use of water, fertilizer, chemical, pesticides and petroleum which may adversely impact production systems, fertility and biodiversity. Hence what really needs to happen is that we must find a cheap, non-food crop or waste product that is easier to turn into biofuel and blends well with petroleum or diesel.
There remains ample room for debate on the future of Biofuels, especially in relation to Africa. If we look at what is happening in Africa with a historical understanding it is clear that Africa is entering yet another cash crop boom, except this time it is not tea, coffee or cocoa, but maize - food! If selling tea, coffee and Cocoa for the past 50 years has not lifted Africa out of the development quagmire how will placing her food at mercy of commodity traders in Chicago, New York and London be any different?
* Mark J. Sorbara is a freelance writer and researcher on Africa issue. www.marksorbara.com