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Liquid Biofuels for Transportation in Tanzania

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Liquid Biofuels for Transportation in Tanzania Liquid Biofuels for Transportation in Tanzania Potential and Implications for Sustainable Agriculture and Energy in the 21st Century Study commissioned by the German Technical Cooperation (GTZ) August 2005 Study funded by BMELV through FNR The views and opinions of the author expressed in this study do not necessarily reflect those of the BMELV Biofuels for Transportation in Tanzania Preface The work was commissioned by the Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) in Eschborn and makes a contribution to a more comprehensive project on international level that investigates the possible opportunities of biofuels especially in developing countries. Reviewers: Elke Foerster (GTZ), Dirk Assmann (GTZ), Christine Clashausen (GTZ), Birger Kerckow (FNR), Uwe Fritsche (Oeko-Institut). Partnership WIP – Renewable Energies Dr. Rainer Janssen Sylvensteinstrasse 2, 81369 Munich, Germany email: [email protected] http://wip-munich.de Themba Technology Dr. Jeremy Woods Gareth Brown Linden Square, Coppermill Lock, Harefield, Uxbridge UB9 6TQ, United Kingdom email: [email protected] http://www.thembatech.co.uk Tanzania Traditional Energy Development and Environment Organisation (TaTEDO) Estomih N. Sawe P.O. Box 32794, Dar es Salaam, Tanzania Tel. +255 22 2700 –771 (- 438 Fax) email: [email protected] http://www.tatedo.org Integration Umwelt und Energie GmbH Ralph Pförtner Bahnhofstr. 9, 91322 Gräfenberg, Germany Tel. +49 9192 9959 -0 (-10 Fax) email: [email protected] http://www.integration.org 2 Biofuels for Transportation in Tanzania Executive Summary The successful growth of African economies hinges on their modern energy, of which liquid fuel plays an important role. Sharp fluctuations in oil prices have thwarted development plans in Africa and forced many countries to review their development and services project, their overall expenditure and their external trade relations. Tanzania relies exclusively on imports for its oil needs. The value of Tanzania’s imports increased from US $ 1,661.4 mio. in 2002 to US $ 2,145.3 mio. in 2003. This increase is largely attributed to an increase in importation of fuel. The fuel bill increased from 2002 to 2003 over 100 % (from US $ 195.6 mio. to US $402.0 mio.). The continuous high oil prices are a heavy burden for the country. Just recently, the Tanzanian Government has started to think about alternatives to oil and during discussions with several high-level representatives of Government Ministries it became very clear that Tanzanian policy-makers are well aware of the large variety of benefits offered by displacing gasoline and diesel fuels with liquid biofuels for transport. The following benefits may act as the main drivers for future biofuels programmes in Tanzania: • Agricultural/rural development – Creation of new jobs and income opportunities • Reduction of oil imports – Foreign exchange savings • Improved energy security • Creation of new industries • Reduction of GHG emissions – Opportunities for CDM and carbon trading • Reduction of air pollution (Lead, SO2, CO) • Improved vehicle performance (ethanol as octane enhancer) The GTZ has been commissioned to comprehensively survey the issue of “fluid bio-fuels for transportation” in a global environment guided by the principle of sustainable agriculture, energy and transport and to bring the results of the analysis in the international debate. The global survey will be carried out by the Worldwatch Institute, Washington. As a basis for the formulation of an international policy approach also country-specific considerations have to be analysed and to be taken into account. Therefore, regional studies will be undertaken in Brazil, China, India and Tanzania and experiences and knowledge from Germany, Europe and the US will be prepared. These regional studies act as a basis for the global survey. This regional study report on the potential of biofuels for transportation in Tanzania is divided into the following four chapters. Chapter 1 provides an overview of the current situation in the field of biofuels for transportation in Tanzania including the description of the transport sector and the (bio) fuel market in Tanzania as well as the identification of most relevant agricultural energy crops and forestry resources for biofuel production. In Chapter 2 the potential for production of biofuels in Tanzania is examined under a set of realistic scenarios. This chapter evaluates whether there is a practical potential to produce biomass for the production of biofuels at the scales necessary to have a real impact on the Tanzanian transport sector. 3 Biofuels for Transportation in Tanzania The assessment begins with estimates of the gross bioenergy potentials of the country based on analysis of soil, climate and terrain characteristics of different areas of the country and of the requirements of different crop types. This assessment of supply potential is then refined by considering the biofuel yields of current conversion technologies. Alternative levels of demand for biofuels based on the national demand for liquid fuels for petrol and diesel engines are analysed, and the supply requirements to meet these demands are assessed. Basic analyses of the economic viability of bioethanol and biodiesel production in Tanzania are carried out. Finally the future increases in potential for production of biofuels that may be expected to result from improvements in crop and conversion yields are described. In Chapter 3 the potential for biofuels production in Tanzania are investigated in relation to sustainability targets. Aspects taken into account for this analysis include food security and energy provision as well as environmental, socio-economic, and macro-economic aspects. The drive to meet the Millennium Development Goals and the emerging underlying understanding that energy services underpin each of these goals has led to a sharp focus on the ability to provide those energy services at the local level. The parallel driving forces of energy security and climate change mitigation further re-enforce the need to find affordable, safe and sustainable renewable sources of energy. Modern bioenergy, an inherently rural, land- based activity has the potential to help provide those energy services. However, because modern bioenergy is a land and labour intensive form of renewable energy it also can have complex positive and negative implications for sustainability. Moreover, a carefully planned, established and monitored bioenergy provision chain can have overwhelmingly positive impacts on a range of sustainability indicators, but a poorly planned and established chain can have damaging environmental and social impacts in the short and long term. Finally, because of the biological basis to bioenergy production many of the factors necessary to develop a profitable and sustainable bioenergy chain are sensitive to the local environment. As a result of the combination of complexity and site-specificity it is often not possible to establish generic standards and guidelines that ensure sustainable provision. Instead, a broad set of standards needs to be established underpinned by a detailed set of measurable criteria that can be monitored through an effective and transparent system, such as certification. This chapter summarises the main criteria that will affect the sustainable supply of biomass for energy and highlights the role assurance and certification could play in providing the mechanism for ensuring sustainability. The recent increase in the price of oil and gas means that many forms of bioenergy are now directly commercial, particularly biofuels. However, the regulatory systems are not yet established to ensure that biomass is not effectively mined for short term profits to the detriment of the environment and local communities. Systems that are workable, transparent and reward best environmental and social practice are urgently required. In Chapter 4 recommendations for decision-makers in Government and industry are presented. This section provides an overview on the various motivations for the establishment of biofuels programmes in Tanzania as well as key lessons learnt from other biofuels programmes. Biofuel implementation opportunities and opportunities for German-Tanzanian collaboration are identified. Finally, concrete recommendations for the introduction of biofuels in Tanzania are presented including the establishment of a Tanzanian Biofuels Task Force and a Tanzanian Biofuels Producer Association. 4 Biofuels for Transportation in Tanzania The following list of concrete recommendations for action for the Tanzanian Government were elaborated as a follow-up of the expert workshop and policy discussion organised in the framework of the present study on 28 September 2005 in Dar es Salaam. 1. Establish a high-level Biofuels Task Force The aim of this Task Force is to provide advice and recommendations to the Government for the elaboration of biofuels policies and regulations suitable for the Tanzanian framework conditions (e.g. mandate, obligation, tax breaks, enabling fuel standards). This Task Force will ensure close co-operation between the different Government Ministries involved in the development of biofuels policies, as well as provide an information channel between Government and biofuels stakeholders from industry, farmers associations, NGOs and civil society. 2. Establish a Tanzanian Biofuels Producer Association The Biofuels Producer Association will give a strong voice to all actors which are or plan
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