Africa heralds biofuel pipeline success

Africa has more winter sun than any other continent on earth, while its expansive tracts of unused and underused land hold out the promise of the continent playing host to one of the world’s biggest biofuel industries.

Biomass in Tropical Africa is already the continent’s third main energy source, after hydrocarbons in the north and coal in the south, and it is the source of half the energy currently consumed on the continent.

There have been several attempts by African governments in the past to develop a renewable sector – particularly biofuels – since the first oil shock of the early 1970s – all of which have been very small scale but most of which are still in existence.

Many of these efforts failed to gather momentum, largely due to the combination of falling oil prices, lack of investment, and poor government policy direction. In recent years, however, rising oil prices, growing concerns about climate change, and Africa’s belated recognition that it stands to benefit considerably from the growth of the biofuel sector has changed that equation fundamentally.

Brazil, along with China and the EU, have been quick to identify Africa as a region with the ideal agro-climatic conditions, and the socio-economic potential, needed to become a large-scale global biofuel feedstock provider over the next decade, and are now beginning to direct investment flows to turn potential into reality.

Brazil, which is already the world’s largest producer of sugar cane-based ethanol, exporting some two billion litres a year to more than a dozen countries has been quietly laying the groundwork for a Brazil-Africa biofuel partnership to bring the continent into the “biofuel revolution.”

Through Petrobas, the state-owned oil company, Brazil has proposed a series of long-term investments across the continent, offering African governments access to Brazilian financial, technical and agronomic assistance needed to get their fledgling industries off the ground.

Of Petrobas’s total investment budget for 2009-13, only $2.8bn has been earmarked for investment in biodiesel and bioethanol, and only nine percent of that will be invested abroad. But the small size of the overseas investment budget should not disguise the scale of Brazil’s ambitions for the African biofuel sector.

Brazil’s African biofuels drive does not stem from any altruistic impulse. It is a hard headed calculation of its own national interests. Helping Africa to become a global provider of biofuel feedstock serves Brazil’s goal of making biofuels a rival to hydrocarbons by diversifying feedstock supplies and augmenting global demand. Achieving these objectives within the context of expanding South-South trade relations is just ideological icing on the cake.

The Brazilian biofuel development model, which is based on large numbers of mostly small-scale farmers producing feedstock for both the domestic and the export sectors, supported by state subsidies, is ideally suited to the African context where most of Africa’s population relies on subsistence or small-scale family farming.

Moreover, the United Nations Conference on Trade and Development, the international trade body, has endorsed the Brazilian biofuel industry as an appropriate model for Africa in terms of its impact on the environment, commerce and economic development which – crucially – is compatible with the goal of preserving food security.

Biofuel production need not necessarily threaten food production. It has the potential to provide millions of poor rural farmers an additional source of income, which they can use to buy seeds and fertiliser, offering the prospect of boosting food output not reducing it as the anti-biofuel Luddites are fond of insisting.

While Brazil is cultivating relations with scores of African states seeking to get their biofuel industries off the ground, two stand out in particular – Angola and Mozambique – which like Brazil, are both Portuguese-speaking countries, which it sees as likely to represent the frontier of biofuel development in Africa.

Both countries are emerging from the destruction of civil wars, and have large amounts of unused or underused arable land with relatively low population densities. Mozambique’s future lies with bioethanol, while Angola’s lies with biodiesel. Brazil is helping Maputo and Luanda with their plant science programmes, as well as offering assistance with plantation management and refining, distribution and marketing of the final product.

Mozambique and Angola are both eager to become industry leaders in their respective biofuel sectors, with their governments willing to embark on the necessary land tenure and market reforms needed to grow their industries comparatively quickly.

Moreover, Mozambique’s bioethanol from sugar cane, and Angola’s biodiesel from soya beans, is considerably more carbon friendly than the US corn-based biofuel industry, and could be filling up a car near you quicker than you probably realise.