Ethiopia's New Energy Strategy Opens Way for Bio-Fuel

By WUDINEH ZENEBE

Date: Nov 4, 2007

Source: Addis Fortune

With an aim to shift from high-cost fossil oil to cost-effective bio-fuel, the Council of Ministers a month ago approved the utilization of bio-fuel development strategy in Ethiopia.

The 16-page strategic document, approved in September, was prepared by the Ministry of Mines and Energy (MoME) in collaboration with experts at the Ministry of Trade and Industry (MoTI) and the Ministry of Agriculture and Rural Development (MoARD).

The growing increase of the international oil price alerted the Ethiopian government to consider shifting to the consumption of bio-fuel. Ethiopia on average spends 8.6 billion Br annually on importing petroleum, which consumes about 87pc of the hard currency the country earns from foreign trade each year.

In the words of an expert at the Ministry of Finance and Economic Development (MoFED), who asked not to be named: "Due to the fact that Ethiopia's economy has positive growth year through year, the country's energy need grows faster to match the pace of the economy. However, in order to contain the ever increasing cost of the fossil oil market that would impact on the economy, the advent of this strategy to utilize the bio-fuel and ethanol potential in Ethiopia is a good news."

Bio-fuel is comprised mostly of vegetable oil - from jatropha, castor seed, and palm, for example - which is mixed with methanol or ethanol, both highly combustible alcohols, and a dash of potassium hydroxide until the chemical reaction produces a fuel that can be burned in any diesel engine with much lower emissions. Similarly, bio-diesel can also be made from animal fats. Ethanol can be obtained through distillation process from sugarcane, corn or from sweet potatoes, so all of bio-fuel's ingredients are renewable, unlike fossil fuels. 

The use of vegetable oil to power engines is not a new idea. Quite to the contrary, Rudolph Diesel allegedly used peanut oil to power the diesel engine he first debuted at the 1900 World Fair in Paris and predicted that vegetable oils would one day replace fossil fuels as the main source of energy for combustion engines.

Speaking to Fortune, an expert from Fincha Sugar Factory said that blended fuel has been in use elsewhere in the world, and that it has been proven to be practical and effective for the purposes for which it has been approved . Moreover, the production of pure ethanol can as well be used as energy source for cooking purposes and electric power, the expert added.

Bio-diesel can also be blended with petroleum products of fossil oil. It is also possible to make pure bio-diesel for purposes of industrial input, agricultural activities and electric power.

The strategic document guides the utilization of bio-fuel by way of producing ethanol from sugar-cane and extracting bio-diesel from such oilseed plants like jatropha, castor seed and palm trees.

Ethiopia has 700,000hct of land suitable to develop sugar plantation, though currently the sector remains under the monopoly of the government, as there is not a single private investor involved in the sector.

The three sugar factories dominating the main supply line in the domestic market are Fincha, Wonji-Shoa and Metehara. The combination of their annual production capacity reached 2.8 million quintals of sugar. While Fincha produces eight million liters of ethanol, Wonji-Shoa and Metehara together yield 64,000ton of molasses per year. Ethanol produced from Fincha reaches to the international market through Silcompa Italy. Molasses has also been exported to overseas markets.

According information obtained from the Sugar Development Agency, once the effort to remobilize these potential resources for utilization of bio-fuel begins, the agreement to export ethanol and molasses would be terminated.

The project of the fourth state-owned sugar factory, Tendaho whose construction is underway at a cost of eight billion Birr that would develop over 64,000hct of land increases the capacity with which to produce the bio-fuel energy. The agency's information discloses that the expansion project of the three existing sugar factories that requires the government to expend not less than eight billion Birr enlarges the bio-fuel production activities in the country.

With the completion of the four sugar factories in 2012/2013, 128.1 million litres of ethanol per year will be produced.

If all the potential suitable land for sugar plantation is being utilized, the country would be able to produce one billion litres of ethanol; that is seven times much more than the annual consumption of the fossil oil energy consumption of Ethiopia, sources from the Agency forecasts the potential capacity for production of ethanol.

On the other hand, for the production of oils for bio-fuel, Ethiopia has 23.3 million hectare of land; 17.2 million hectare in Oromia, which is the largest of the six other regions in which the bio-diesel potential could be tapped such as Benishangul-Gumuz, Gambella, Somalia, Amhara, Southern Nations, Nationalities and Regional State and Tigray.

Currently, not less than 20 companies have been registered to produce vegetable oils for bio-fuel; however, five of them have already gone operational.

Bio-fuel is the only alternative fuel approved by the Environmental Protection Agency.

However, an environmentalist from the Non-Governmental Organization (NGO) views the whole matter of the bio-diesel development in Ethiopia with different spectacle that the fact that to develop such sector requires vast chunk of land, it would pave a trend for the domination of mono crop at the cost of the bio-diversity flora and fauna in Ethiopia.

The government does not buy this pessimistic view cast by the environmentalist. The strategic document to develop the bio-fuel project took into consideration the welfare of the pastoralists and the farming community in the country in a way they would not be affected by the activities, the government sources stress.

The strategic document includes the market beyond the domestic demand and the government feasibly sees this would be possible to achieve.

FloraEcoPower Company operating mainly in Oromiya region to develop bio-fuel energy strongly believes that 'Bio-diesel extraction is an easy process, which can be done by small-scale operation in local villages. This company particularly extracts oil from castor and jatropha.

Jatropha grows in dry climatic condition that should be below 2,000mm rainfall, the yield would be 1,000kg per hectare, however, where the rainfalls range from 900 to 1,200mm, jatropha would yield up to 5,000kg per hectare.

Jatropha and castor seeds in Ethiopia are estimated to cost from 0.45 to 0.75 dollars per litre. However, in Germany, a litre costs 1.3 dollars, information obtained from Minstry of Mines and Energy confirms.

Disclosing to Fortune, Melis Teka, MoME's acting head of the energy department confirms that study is underway to be concluded as to how the incentive package would be proposed to create encouraging environment for those developers to invest in the sector.

In order to broaden the use of bio-fuel in Ethiopia, Flexfuel vehicles (FFV) would be imported by way of encouraging importers through some forms of incentives.

Granting land suitable for development of ethanol and bio-fuel energy in various sections of the country free from fees or with lowest possible cost of leasing as well as on long term basis are some of the incentive packages to encourage more investments in the sector, close source disclose.

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