The Potential of Sustainable Liquid Biofuel Production in Rwanda a Study on the Agricultural, Technical and Economic Conditions and Food Security Published By

Division Agriculture, Fisheries and Food

The potential of sustainable liquid biofuel production in Rwanda A study on the agricultural, technical and economic conditions and food security Published by

Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH Division Agriculture, Fisheries and Food Promotion of Agriculture and Food Section Postfach 5180 65726 Eschborn T +49 61 96 79-0 F +49 61 96 79-11 15 E [email protected] I www.giz.de

Contact Dr Thomas Breuer, GIZ Planning Officer, [email protected]

Authors Vanessa Zeller, Anastasios Perimenis, Jens Giersdorf, Franziska Müller-Langer, Dr Daniela Thrän (German Biomass Research Centre); Dr Valens Mulindabigwi (Agricultural scientist, Institute of Ethnology, University of Cologne); Julia Sievers (GIZ, Sector Project Agricultural Policy and Food Security, Division Agriculture, Fisheries and Food)

Photos Dr Valens Mulindabigwi: Fig. 12; Fig. 21; Jatropha B and C; Moringa D and E; Castor A Vanessa Zeller: Jatropha A; Moringa A, B and C; Castor B; Sugarcane Copyright © 2005 David Monniaux: Cassava A Copyright © Iwata Kenichi: Cassava B

The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH was formed on 1 January 2011. It brings together the long-standing expertise of DED, GTZ and Invent. For further information, go to www.giz.de.

Eschborn, February 2011

Table of Contents

Abbreviations ...... 5

Executive summary...... 6

I. Background and Objectives...... 12 Approach and scope of the study ...... 12

II. Framework ...... 14 II.1 Natural resources and demography ...... 14 II.1.1 Climate and soil conditions...... 14 II.1.2 Land use...... 16 II.1.3 Land distribution and land tenure...... 18 II.1.4 Population...... 21 II.2 Agriculture ...... 22 II.3 Food security ...... 25 II.4 Energy sector ...... 28 II.4.1 Energy policies ...... 28 II.4.2 Energy supply and demand ...... 28 II.5 Transport sector ...... 30

III. Potentials Analysis ...... 32 III.1 Agricultural system analysis ...... 32 III.1.1 Definitions and approach...... 32 III.1.2 Development of the cultivated area in Rwanda ...... 35 III.1.3 Profitability of current cropping systems ...... 37 III.1.4 Profitability of intensified cropping systems ...... 38 III.1.5 Profitability of cropping systems on marginal lands...... 42 III.1.6 Farming systems for energy crops in Rwanda...... 43 III.1.7 Possible energy crops for biofuel production in Rwanda...... 45 III.2 GIS and GAPP-based potential analysis ...... 51 III.2.1 Definitions...... 51 III.2.2 Potential on agricultural areas (GAPP modelling) ...... 51 III.2.3 Potential for energy crops in integrated systems...... 56 III.2.4 Potential of marginal land...... 60 III.3 Food security analysis ...... 62 III.3.1 Definitions and concepts ...... 62 III.3.2 Methodology ...... 64 III.3.3 Food security analysis: Food availability...... 66 III.3.4 Food security analysis – Food access ...... 74 III.3.5 Food security analysis – Utilisation...... 80 III.3.6 Food security analysis – Stability of food security ...... 81 III.3.7 Implications for the biofuel potentials analysis...... 82 III.3.8 Conclusion...... 85

IV. Technical- economic Analysis...... 86 IV.1 Technical analysis ...... 86 IV.1.1 Biodiesel production ...... 87 IV.1.2 Bioethanol production...... 88 IV.1.3 Product properties ...... 88 IV.2 Economic analysis ...... 91 IV.3 Scenario building ...... 93 IV.3.1 Scenario 1 ...... 93

IV.3.2 Scenario 2 ...... 95 IV.3.3 Scenario 3 ...... 96 IV.3.4 Scenario 4 ...... 99 IV.3.5 Scenario 5 ...... 100 IV.3.6 Overview of results...... 101 IV.3.7 Sensitivity ...... 103

V. Impact Analysis ...... 105 V.1 Environmental impacts ...... 105 V.1.1 Impacts on global climate...... 106 V.1.2 Land use impacts ...... 107 V.1.3 Impacts on soils...... 107 V.1.4 Impacts on water ...... 108 V.1.5 Impacts on biodiversity...... 108 V.1.6 Impacts on local air quality...... 109 V.1.7 Conclusion...... 109 V.2 Social impacts ...... 109 V.3 Economic impacts ...... 111

VI. Conclusions ...... 115

List of figures ...... 118

List of tables ...... 119

References ...... 120

Annex ...... 125

Abbreviations p.a. per annum AGO automotive gas oil (diesel) Bf biofuel cap capita CFPP cold filter plugging point CHP combined heat and power FAME fatty acid methyl ester FAO Food and Agriculture Organization FFA free fatty acids Fos. eq. fossil equivalent FRW Rwandan franc GAPP global agricultural production potential GHG greenhouse gas GIS geographical information system GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH (German Society for International Cooperation) ha hectare IRST Institute of Scientific and Technological Research ISAR National Agricultural Research Institute JVO jatropha vegetable oil kWh kilowatt-hour MINAGRI Ministry of Agriculture and Animal Resources MININFRA Ministry of Infrastructure MJ mega joule m million MW megawatt NGO non-governmental organisation NIRS National Institute of Statistics NUR National University of Rwanda PMS premium motor spirit (gasoline) RADA Rwanda Agricultural Development Authority RON research octane number SWOT strengths, weaknesses, opportunities and threats T tonne TOE tonne of oil equivalent USD US dollar VAT value added tax

Exchange rates EUR 1 = FRW 798.28 (18/08/2009 National Bank of Rwanda), USD 1 = EUR 0.69 (average value 20/08– 20/09/2009), USD 1 = FRW 550.81

Executive summary

The demand for bioenergy and especially for liquid biofuels is increasing all over the world. This is because biofuels have the potential to diversify domestic energy supplies, to reduce dependency on highly volatile fossil fuel prices, to enhance access to energy in rural areas, to promote rural development and to reduce carbon emissions.

However, there are social, environmental and economic risks associated with the production and use of biomass for energy purposes. In many cases the production of biofuels is not economically viable and has to be subsidised by the state. While promoting the production of liquid biofuels, it is necessary to minimise the risks and maximise the benefits. A coherent political framework, appropriate sustainability standards and a clear concept are all necessary for the sustainable production and use of liquid biofuels.

This purpose of this study was to analyse the potential for liquid biofuel production in Rwanda. The main objective was to assess the current status of agriculture in the country and to gauge the biomass potential of biofuels such as vegetable oils, biodiesel and bioethanol, while also paying close attention to the food security situation in Rwanda. This was followed by an analysis of the technical and economic aspects of different methods of feedstock and biofuel production (small, medium and large-scale), in order to identify viable biofuel concepts for the transport and electricity sectors. The study concluded with an assessment of the possible environmental, social and economic impacts of biofuel production. The overall objective was to obtain information that would support future decision-making concerning the sustainable production and use of biofuel in Rwanda.

The most important results are presented below in the form of answers to a set of key questions.

What is the state of agricultural production, and what relevant agricultural production systems exist for biofuels in Rwanda?

→ Results from the agricultural system analysis (by Valens Mulindabigwi, University of Cologne)

By the end of the 1980s, options for extending the cultivated area by clearing new land were almost exhausted. The expansion of cultivation mainly involved a reduction in the fallow period or the occupation of marginal lands. Since 1998 the cultivated area has increased, probably due to the re-use of farm lands abandoned during the wars, as well as the agricultural exploitation of a part of the Akagera National Park. Despite this expansion, it is striking that the production of some staple food crops, particularly sweet potato and sorghum, has been falling. In light of the increased difficulties farmers face in gaining access to land, especially marshlands, further research is needed to find out how the agricultural land is currently used.

Referring to the economic analysis of farming systems, the current cropping systems are unprofitable (except in the production of onions, tomatoes and rice). There is potential to increase food production and (gross) profit by improving crop yields. However, in some cases the quantities of manure and mineral fertilisers recommended for crop intensification are very high. This is expensive and makes it hard to generate agricultural profit (e.g. coffee plantations). On marginal land, only eucalyptus plantations can generate positive gross profit.

Intensification of production of starchy crops, such as cassava and sweet potato, whose yields could double or triple, could generate an agricultural surplus.

Executive summary

Without irrigation and water management systems, agricultural intensification will not lead to a sustainable improvement in yields ('Fertiliser is water' – Ifumbire ni amazi – explained a farmer in Kayonza).

The best options for including jatropha in sustainable integrated farming systems in Rwanda include: 1) jatropha fences, 2) jatropha hedgerows as anti-erosion structures, 3) jatropha along roadsides, 4) jatropha belts around Akagera Park, and 5) jatropha hedgerows around marshlands and water bodies.

The castor oil plant could potentially be intercropped as part of different cropping systems. Intercropping these plants between food crops, particularly in banana plantations, is a traditional agroforestry system. This could now be reassessed for its use in biofuel production. There is also potential to produce moringa through intercropping with food crops.

Is there land available for the cultivation of energy crops for liquid biofuel production?

→ Results of the GAPP and GIS-based analysis of potential (by the German Biomass Research Centre)

The analysis looked at different approaches, assessing the potential to cultivate energy crops on agricultural land, in integrated systems (cultivated on roadsides, around Akagera Park etc.) and on marginal land.

The potential area of agricultural land for biofuel production was analysed for the period 2005 to 2020, using agro-economic modelling (GAPP model).

Extrapolating the current trends in agricultural productivity, land use and food demand (so-called business as usual scenario), the GAPP analysis shows that there are no agricultural areas available for the cultivation of energy crops. Indeed, considering the future demand for food, the analysis indicated a deficit of agricultural areas.

Assuming a moderate annual increase of 1 % in productivity, this land deficit is slightly lower, but there are still no surplus areas available for energy crop cultivation.

A sharp increase in productivity of 5 % annually would be necessary to achieve, in 2020, a surplus of agricultural products which could theoretically be used for biofuel production.

Using a GIS-based approach, the potential for jatropha vegetable oil (cultivated in integrated farming systems as described above) is estimated at approximately 25,000 tonnes p.a. However, uncertainty regarding the acceptance of jatropha and possible competing uses, as well as logistical issues, mean the realisation of this biofuel potential is highly questionable.

To measure the potential of marginal lands we must start with a definition. Marginal lands are those with very low productivity, and which are difficult to cultivate due to natural factors (climatic conditions, soil properties etc.) and/or anthropogenic factors (soil degradation through erosion or contamination etc.). Marginality does not imply that the land cannot be used or improved. Marginal lands are used as pasture, for the production of wood fuel and for some food crops.

Due to the lack of adequate data on soil quality and land use, the potential of marginal land is currently not quantifiable. Assuming that 3 % of the existing agricultural land is classified as marginal, the possible yield is low (c 6,000 t of jatropha vegetable oil annually).

Executive summary

What are the challenges for biofuel production in terms of to food security?

→ Results of the food security analysis (by Julia Sievers, GIZ)

Currently, Rwanda faces serious problems with all dimensions of food security: availability, access, use&utilisation and stability. All the dimensions of food security have to be considered when assessing biofuel production potentials.

Biofuel production (for the transport sector) would require a considerable area of land (depending on the degree of political promotion of biofuels). This would compete strongly with other uses of land that are important for food security, such as food crop production, grazing and wood fuel production.

Availability: Not only should the theoretical potential for agricultural production be taken into account; the current agricultural production patterns should also be considered, as should the policy decisions being made today that will influence future agricultural production. o The analysis shows a trend towards increasing production of export and cash crops, whereas the production of some major food crops is decreasing and their intensification is not being promoted (e.g. sweet potatoes). This confirms the analysis that no biomass would be available for biofuel production in the future, even if agricultural productivity should increase by 5 %, because increases in agricultural productivity do not automatically mean that more food crops will be available for local consumption. o Food imports increase the national availability of food. In part, these imports benefit the poor rural population (e.g. palm oil, beans), while some of the major imported products (rice, wheat) are mainly consumed by the urban population.

Access: Besides the problems of food availability, problems of access to food also indicate that there is no potential for biofuel production (with some exceptions – see below). o Under current the conditions of food insecurity, as well as insufficient and insecure access to land for the poor rural population, promoting the large-scale cultivation of energy plants would increase the risk of expropriation and removal of land use rights from farmers (as would other types of large-scale investments). o At present, and in the near future, there would seem to be only limited employment and income opportunities outside agriculture. Because of this lack of alternatives, if the small- scale farmers' land use rights were expropriated or removed, the loss of land could not be adequately compensated. o There is no potential to raise the incomes of small-scale farmers if they switch from food crop production to jatropha production. On the contrary, jatropha is much less profitable than many food crops. Even on marginal land, its production does not seem at all profitable for farmers.

Use of food: In some respects, if it helps improve poor rural households' access to energy for cooking or for food processing and storage, the potential exists for bioenergy to improve some aspects of the 'use' dimension of food security. This can only be realised if negative impacts on food availability and access are avoided, which means only small-scale biomass production can be considered, in fences and hedges, alongside roads or in intercropping systems.

Executive summary

Stability: In any analysis of biofuel potentials, precautions should be considered for any risks that could affect the stability of food security (e.g. unforeseeable impacts of climate change, unstable weather conditions, and food import problems due to high and volatile prices).

Is biofuel production economically and technically feasible in Rwanda?

→ Results of the technical-economic analysis (by German Biomass Research Centre)

Drawing on the results of the potentials analysis, as well as the focus of the study and the conditions in Rwanda, five scenarios have been identified and investigated from a technical-economic point of view. o Scenario 1: domestic cultivation of jatropha (10,000 ha plantation on marginal land) and use for biodiesel production o Scenario 2: domestic cultivation of jatropha (integrated farming systems) and use for biodiesel production o Scenario 3: domestic cultivation of jatropha (integrated small-scale farming systems) and use of vegetable oil for electricity generation o Scenario 4: domestic sugarcane-derived bioethanol (shift from sugar to bioethanol production) o Scenario 5: imports of palm oil for biodiesel production

Biofuel production based on domestic biomass resources is currently not economically viable in view of

the current fossil fuel prices (the cost of biofuel is between USD 1.86 – 2.05 per litre fos. eq.).

The production of biofuels using imported palm oil could be an option from an economic point of view, but it would bring few or no benefits in terms of employment generation or import substitution.

Production costs for electricity generation using jatropha vegetable oil exceed the current electricity price

(USD 0.55 /kWhel).

What are the possible impacts of sustainable biofuel production?

→ Results of the impact assessment

Environmental impacts (by German Biomass Research Centre)

Regarding the effects of land use change for scenarios 1-4, it is probable that no negative change effects will occur, as the energy crop cultivation would occur either on marginal land or on sites already cultivated (sugarcane plantation). In the case of palm oil-derived biodiesel, there is a high level of uncertainty about land use changes.

GHG releases from cultivation are likely to be low for jatropha under Rwandan conditions due to the low inputs of machinery, fossil fuels and fertilisers. Sugarcane and palm oil plantations are more intensive farming systems and are therefore associated with higher releases of GHG emissions.

On the premise that no land use changes occur, the overall GHG balance from biofuels derived from palm oil and sugarcane would normally be a high saving of emissions (literature data show savings of up to 80 % in relation to the fossil reference).

Impacts on soil caused by the use of machinery and (mineral) fertiliser in the production of biomass are assumed to be moderate in Rwanda, except in scenarios 4 and 5 (sugarcane and palm oil plantation).

Executive summary

Large quantities of water are needed for biofuel production, especially for sugar mills and ethanol plants. Efficient use of water and the treatment of wastewater are essential to reduce the negative effects on water quality and its availability.

The cultivation of energy crops in intensive monoculture can have strongly adverse impacts on local biodiversity. This is more likely to happen with palm oil and sugarcane plantations, whereas the cultivation of jatropha in integrated systems would probably not have such an impacts.

Since emissions of CO2, hydrocarbons, SO2, particulate matter and other toxic compounds are generally lower from biofuels than from fossil fuels, improvements in air quality could be expected through the use of biofuels. However, biofuels emit larger amounts of nitrogen oxides.

Social impacts (by Julia Sievers, GIZ)

Scenario 1: Potential negative impacts/risks exist due to the competition between jatropha production and other uses of marginal land which are important for food security (food crop production, pasture, collecting wood for cooking). No positive impacts/opportunities are assumed, due to the lack of profitability of jatropha production on marginal land.

Scenarios 2 and 3: There is potential for the rural population to earn additional income from planting jatropha as fences or alongside roads. Planting energy crops (e.g. jatropha) around the Akagera Park seems to be more questionable due to competing uses, especially the use of the land as pasture.

Scenario 4: Negative impacts are likely as the cultivation of sugarcane to produce ethanol would require the use of productive land and would therefore compete with food production.

Scenario 5: This is likely to have negative impacts on food security as there is a high dependency on imports of oil to meet food consumption needs, especially considering the already considerable deficiency of oil consumption among the Rwandan population (poor population groups).

Economic impacts (by German Biomass Research Centre)

For the economic impact analysis, three factors were taken into account: savings from discontinuing the import of fossil fuel, losses of tax revenues previously levied on the fossil fuel (e.g. import duties, VAT), and losses incurred by covering the price difference between biofuel production costs and fossil fuel price, which would necessary to make the product price-competitive with the fossil equivalent.

Scenario 1: Biodiesel production and distribution costs would be USD 2.05/lfos. eq. (for 1,110 t p.a. of biodiesel), which is 67 cents per litre higher than the end price to the consumer of diesel fuel (USD 1.38/l). Considering the three aforementioned factors, this scenario would result in an annual macroeconomic deficit of USD 0.78 million.

Scenario 2: Biodiesel production and distribution costs would be USD 2.02/lfos. eq. (for 24,279 t p.a. of biodiesel), which is 64 c/l more expensive than the fossil diesel price. The deficit in this case would be USD 16.2 million p.a.

Scenario 3: Production costs for electricity from jatropha oil would be USD 0.55 /kWh (7,100 MWh p.a. for one model district), which is 34 cents per kWh more expensive than the final residential price of electricity (21 c/kWh). In the absence of more reliable data, the import price of electricity is considered to be 70 % of the final price (15 c/kWh). Under this assumption, this scenario would result in an annual deficit of USD 1.82 million.

Executive summary

Scenario 4: Bioethanol production and distribution costs would amount to USD 1.86 /lfos. eq. (for 10,000 t p.a. of bioethanol), 48 c/l more than the current gasoline price. The deficit in this case would be USD 7.58 million p.a., and the savings on imported gasoline would not be reflected entirely in the local economy because Rwanda would still need to import sugar.

Scenario 5: The costs of producing and distributing biodiesel from imported palm oil would amount to

USD 1.19 /lfos. eq (for 48,000 t p.a. biodiesel), which is 19 c/l lower than the current fossil diesel price. This scenario would produce a final positive balance of USD 2.99 million each year. However, it is important to consider that these savings would not flow entirely into the local economy as Rwanda would still have to import the palm oil.

What are the overall conclusions?

Despite the present efforts of the Rwandan Government, current farming systems do not have the potential to profitably produce feedstock such as castor, jatropha, moringa and sunflowers for biofuel production. Only cassava and sugarcane can be grown at a profit for bioethanol production, and eucalyptus plantations are profitable for woodfuel production. Due to a rise in food consumption and population growth, and because of the limited potential to extend the agricultural area, it is probable that no surplus agricultural land will be available in the short to medium term for energy crop cultivation. Integrated farming systems could be one way to produce energy crops in Rwanda. The potential quantity of jatropha vegetable oil that could be cultivated in integrated farming systems is estimated at approximately 25,000 t p.a. The potential on marginal land cannot at present be measured on the basis of statistical data. However, assuming that 3 % of the existing agricultural land is classified as marginal the possible yield (c. 6,000 t of jatropha vegetable oil annually) is low and its accessibility doubtful.

Additionally, the cultivation of energy crops on marginal land is no option for Rwanda due to the serious problems the country faces in terms of current and future food security. While energy crop plantations would create serious risks to food security, under certain conditions small-scale energy crop production in integrated farming systems could provide benefits for food security. Regarding environmental aspects, domestic biofuel production would not lead to adverse land use change effects, because the energy crop would be cultivated either on marginal land or on sites already under cultivation (sugarcane plantations).

However, one of the main problems could be that liquid biofuel production in Rwanda is not economically feasible under current conditions, and that it would require substantial financial support from the public budget. Since consumption related costs have the greatest effect (about 90 %) on the overall production costs, a reduction of feedstock costs and prices is an important precondition for the promotion of biofuel production. Thus, from the current perspective, it would be very difficult for Rwanda to produce biofuels in a sustainable manner.

Background and Objectives

I. Background and Objectives

The demand for bioenergy and especially for liquid biofuel is increasing all over the world. This is because biofuels have the potential to diversify domestic energy supplies, to reduce dependency on highly volatile fossil fuel prices, to enhance access to energy in rural areas, to promote rural development and to reduce carbon emissions.

However, there are social, environmental and economic risks involved in the production and use of biomass for energy purposes. Biofuel production may increase pressure on natural resources, particularly land and water, and aggravate land conflicts, increase food prices, threaten food security and create new social dependencies for smallholders. Environmental risks also exist, such as soil degradation, water scarcity and the expansion of cropland into areas of high biodiversity. In many cases liquid biofuels are not economically viable and have to be subsidised by the state. When promoting their production, it is necessary to minimise the risks and maximise the benefits. To ensure the sustainable production and use of liquid biofuels, a coherent political framework is needed alongside sustainability standards and a clear concept.

This study was carried out to analyse the potential for liquid biofuel production in Rwanda. The main objective of the study was to analyse the current status of agriculture in Rwanda in order to assess the current and future potential to use biomass for biofuels, such as vegetable oils, biodiesel, and bioethanol, while considering the overall food security situation in the country. Subsequently, technical and economic aspects of different methods of feedstock and biofuel production (large scale, medium scale and small scale) were analysed to identify viable biofuel concepts for the transport and electricity sectors. The study concluded with an assessment of possible environmental, social and economic impacts of biofuel production. The overall purpose was to provide information to support future decision-making about sustainable biofuel production and use in Rwanda.

Approach and scope of the study

The analysis of liquid biofuel production was a cross-cutting venture, which addressed agricultural, social, technical-economic and environmental dimensions. According to these thematic priorities, a range of tasks was identified and allocated. A general overview of these tasks (or work packages) is given in Fig. 1. The project started with a phase of literature review, which was followed by a field visit to Rwanda from 3 to 12 August 2009, for the collection of data and to interview different stakeholders. The third phase consisted of analysing and interpreting the collected data. The different methodologies used for the analysis are described in the corresponding chapters.

Background and Objectives

Task 2 General framework Agricultural, food security and energy profile of Rwanda All authors

Task 3 Agricultural system analysis Analysis of farming systems, yields and production costs Dr. Valens Mulindabigwi

Task 4 Potential analysis Task 5 Technical- economic analysis Analysis of technical biofuel Analysis of technical concepts and potentials biofuel production costs German Biomass Research Centre German Biomass Research Centre

Task 7 Food security Task 6 Impact assessment assessment Analysis of food availability, Analysis of economic, social and

1 Project coordination and study review access, use, utilization and environmental impacts stability All authors Julia Sievers, GTZ

Task 8 Synthesis Synthesis of results (potentials and challenges), SWOT Analysis All authors

Fig. 1: Structure of the study The study focuses on the potential for liquid biofuel production and the use of 'first generation' biofuels currently available for mobile or stationary applications. The biomass feedstock considered in the study includes sugar, starch or oilseed-producing plants. Woody or herbaceous biomass and waste biomass were not included in the scope of the study; nor was the potential for biogas derived from of forestry or residues (e.g. liquid manure or biodegradable waste).

An overview of the different biofuel pathways is given in Fig. 2. The production chain runs from biomass production and supply, to the actual production of the biofuel. As a bioenergy carrier, this can then be used for mobile or stationary applications.

Current-generation biofuels are those that are currently on the market in considerable quantities. The most important biofuels are bioethanol or ETBE and biodiesel, for which the production processes are well established. These types of fuel are derived from just parts of the whole plants, such as the starch in corn kernels or grains, the sugar in canes or beet, and the oil in oilseeds. Bioethanol is produced by fermenting sugars from starch and sugar biomass (e.g. cereal crops, such as corn or wheat, sugarcane, beets). It is used either in its pure form in specially adapted vehicles, or blended with gasoline, provided that fuel specifications are met. Ethyl- tertiary-butyl-ether (ETBE) is synthesised from bioethanol and isobutylene. It is used as an additive to gasoline. Biodiesel or Fatty acid methyl ester (FAME) is made from vegetable oils reacting with methanol in a catalysed process of transesterification. In its pure form it is used in specially adapted vehicles, or it can be blended with diesel.

Framework

Land use / Herbaceous Biomass Oil biomass Starch biomass Woody biomass Waste biomass Sugar biomass biomass production (e.g. rape, soya, (e.g. maize, (e.g. residues, (e.g. manure, (e.g. cane, beat) (e.g. miscanthus, palm, jatropha) wheat, cassava) willow, poplar) biowaste, sludge) straw, grass)

Biomass provision Harvesting / (Logistics) Treatment Transport Cargo handling Storage Collection

Biofuel production Physico-chemical conversion Biochemical conversion Thermo-chemical conversion

Pressing / Trans-/ Alcoholic Anaerobic Pyrolysis Gasification extraction esterification fermentation digestion

Vegetable oil Biodiesel Hydro. veg. Biomethane Biomethane BTL Bioethanol DME (VO) (FAME) oil (HVO) / Biogas / Bio-SNG (FT-fuels)

Biofuel Transfer distribution Storage Distribution Fuel station station

Mobile use Stationary use Combustion Hybrid Combustion engine technologies engine

Fig. 2: Overview of biofuel pathways (Current or 'first generation' feedstock and biofuels are marked in red)

II. Framework

II.1 Natural resources and demography

II.1.1 Climate and soil conditions (by Dr Valens Mulindabigwi, agricultural scientist, Institute of Ethnology, University of Cologne)

Rwanda, the 'Land of eternal spring' /1/, is an African country with a tropical temperate climate due to its high altitude. This varies from 900m in Bugarama (southwest) to 4,057m at the summit of Mount Karisimbi (Fig. 3a). Temperature and rainfall vary with the increasing altitude from east to west (Fig. 3b). Temperature fluctuations are not very significant on a monthly basis, but due to the altitude range, there are considerable variations between different sites (annual mean: 19-21°C) /8/. Rwanda can be divided into the following general altitude zones: the lowlands (900-1,500m) /2/, intermediate (1,500-2,000m) and highlands (2,000 – 4,507m). The highlands include the Congo-Nile Ridge which divides the country along the two watersheds of the Nile Basin and the Congo Basin, which account for 60 % and 40 % of Rwanda's total water, respectively. The lowlands are principally situated in the Eastern Province. They are characterised by low precipitation (800 to 1,000mm p.a.), high temperatures (annual mean: 21°C), relative humidity ranging from 55 % to 75 % /3/, and high seasonal fluctuations in rainfall /4/ compared to the country as a whole/3/,/5/. In central Rwanda, the annual rainfall average varies between 1,000 and 1,500mm. In the highlands, annual rainfall exceeds 1,500mm. Over 80 % of Rwanda has more than 750mm of rainfall/6/. The actual evapotranspiration varies between 900 and 1,000mm p.a. /7/ and generally exceeds precipitation, except during the period from March to May (the long rainy season) /8/. Two rainy and two dry seasons occur in Rwanda.

Framework

The short rainy season, 'Umuhindo', from mid September to mid December, is followed by a short dry season, 'Urugaryi', lasting until February. The long rainy season stretches from the middle of March to the beginning of June. During this period, 40 % of annual precipitation is recorded /11/. The long dry season 'Mpeshyi' follows, from June to mid September. The strong and persistent rainfalls during the long rainy season cause extensive erosion. On the other hand, the rains of the shorter season cause less damage as they are less intense /9/. Climate change experts have recorded a 5 % increase in rainfall in the African Great Lakes Region, which includes Rwanda /10/. They have observed that rains are heavier and more intense, which leads to higher runoff and low infiltration. According to the results of regional climate modelling that looked at the key factors of climate change in Africa until 2050 /12/, temperatures will rise by 2°C in Rwanda (particularly in the east). The relative contribution of land degradation is around 1°C. The results also show an increase in precipitation of 60 to 100mm. Rwanda, the 'land of a thousand hills' /13/ is also characterised by numerous soil types whose development is affected by the distinct variations in altitude and climatic parameters. The agro-ecological zones of Rwanda have been defined and revised based on these soil and climatic parameters /14/, /15/.

Map (a) Altitude in Rwanda Map (b) Rainfall in Rwanda

Fig. 3: Altitude and rainfall in Rwanda.

Table 1: Agro-ecological zones of Rwanda and selected characteristics /16/

Framework

The agricultural soil value varies from very poor in the eastern savannah to excellent, for example, at the shores of Lake Kivu. The very poor lands do not necessarily correspond to marginal land.

Marginal lands are lands with very low productivity and which are difficult to cultivate due to natural conditions (climate conditions, soil properties etc.) and/or anthropogenic factors (soil degradation through erosion or contamination etc.). Marginality does not imply that the land cannot be used or improved. Marginal lands are used as pastures, for the production of wood fuel, and for some food crops.

The gradient of a slope is another factor which affects the soil value, when seen in relation to the farming systems used. Around 53 % of the soils are located on slopes steeper than 14 % /17/, where there has been a high decline in crop productivity due to over-cultivation and erosion /18/. According to the different land use systems, soil losses due to erosion vary from between 0-1 t/ha p.a. (in a pine forest or during a long fallow period), to between 300-500 t/ha p.a. on vegetation-free land /9/.

II.1.2 Land use (by German Biomass Research Centre)

The terminology used in this section is taken from the definitions of the Food and Agriculture Organization (FAO). The total area of a country consists of the area of dry land plus areas of inland water (lakes and rivers). The agricultural area consists of arable land, permanent crops, and permanent meadows and pastures. The non- agricultural area is the sum of forested and urban areas. An overview of land use in Rwanda is given in Fig. 4.

Fig. 4: Land use in Rwanda (authors' illustration based on FAO data) Arable land is land cultivated with temporary agricultural crops, temporary meadows for mowing or pasture, land used for market and kitchen gardens, and land temporarily fallow (less than five years). This definition does not include either land that has been abandoned as a result of shifting cultivation, or all the potentially cultivable land. It includes areas where, for example, cocoa, coffee, rubber, flowering shrubs, fruit trees, nut trees and vines 16

Framework are grown, but excludes those with trees grown for wood or timber. Permanent meadows and pasture describes land 'used permanently (five years or more) to grow herbaceous forage crops, either cultivated or growing wild (wild prairie or grazing land)'. Forest area is that covered with wood. The distribution of different land categories according to FAO data is shown in Fig. 5. Almost 75 % of rural land in Rwanda is used for growing crops and for pastoral farming, while another 20 % is forested. Barely one per cent is classified as 'other land', which refers to all the land that is neither agricultural nor forested, including 'built-up and related land, barren land, (and) other wooded land'.

Land Use in Rwanda 2007 (FAO)

Inland water 6.3% Other land 0.3% Forest area 20.3%

Arable land and Permanent crops 56.0% Permanent meadows and pastures 17.1%

Fig. 5: Land use in Rwanda 2007 (source: FAO) Of the total area of Rwanda (2,634,000 ha), between six and eight per cent (/22/, /23/) is occupied by surface water. A large part of this consists of lakes, the biggest of which is Lake Kivu. Shared with the DR Congo, some 102,800 ha of Lake Kivu are on the Rwandan side of the border. Wetlands such as marshes account for another six /23/ to eleven per cent/22/ of the national territory and are found predominantly, but not exclusively, along Kagera River and in Akagera National Park.

Natural forests in Rwanda include mountain rainforests and savannah woodland. The surface area of natural forests decreased by about 65 % between 1960 and 2002. In 2007 natural forests in Rwanda covered a total of 233,900 ha, half of which are protected in national parks or nature reserves /22/. A large share of these forests is protected in the three national parks of Rwanda: Akagera National Park (108,500 ha), Volcanoes National Park (16,000 ha) and Nyungwe National Park (103,000 ha). Cultivated forests were uncommon in Rwanda until the first half of the 20th century when the first plantations were laid out. Today, these plantations, with their most important species Eucalyptus spp., cover a larger area than the natural forests /23/. In 2007, plantation forests covered about 530,000 ha /22/, which therefore means the total forest area according to NISR was 761,800 ha. FAO, on the other hand, claims a total of only 534,400 ha for the same year.

According to FAO estimates, 73 % of Rwanda's rural area (1,925 million ha) was used for agricultural purposes in 2007. This marks a return to the 1990 level, following a rapid decline that reached its lowest point during the genocide of 1994, when only 56 % of the country was used for agriculture. The main reason for this is a relatively strong expansion of arable land since 1995, accompanied by a slow decline in permanent meadows and

Framework pasture (Fig. 6). The development of the cultivated area for food crops is described in greater detail in Chapter III.1.2.

Agricultural Land in Rwanda 1990-2007 (FAO)

3000

2500

2000

1500 1000 ha 1000

500

0 1990 1995 2000 2005

Agricultural Area Arable Land Arable Land and Permanent Crops Land area Permanent crops Permanent meadows and pastures

Fig. 6: Development of agricultural land in Rwanda, 1990-2007 (source: FAO)

II.1.3 Land distribution and land tenure (by Julia Sievers, GIZ)

Land tenure in Rwanda is regulated by numerous laws, policies, programmes, orders and decrees. It would go beyond the scope of this analysis to describe all the relevant laws in depth. Nevertheless it is important to provide an overview of the more significant regulations and the current situation of land tenure in Rwanda, as this is essential background information for any comprehensive analysis of the biofuels potential. As well as land availability and the question of how much land is needed for food production, it is crucial to understand patterns of land distribution and access to land by poor, food-insecure population groups. This is because land access is a critical factor for food security in Rwanda, as it is for many other countries where the majority of the population make a living from agriculture. In short, it is a precondition for the cultivation of energy plants that farmers should have secure access to enough land for their own consumption and to ensure national food availability.

For the sake of the current analysis, it is important to consider the following elements of the political and legal framework.

National Land Policy (February, 2004) The National Land Policy is an important part of the regulatory and political framework for reforms related to land use, land tenure and land legislation in Rwanda. It is intended to overcome the previously existing duality of written law and the widely-practiced customary law affecting land in Rwanda. Among its aims, the policy is intended to improve the security of land tenure (e.g. through land registration and land titling) and to encourage more efficient and sustainable use of agricultural land, especially on productive marshlands (e.g. through land consolidation and land use master plans, and by overcoming subsistence-based agriculture). The National Land Policy provides the basis for several other legal and political regulations concerning land use and land tenure.

Framework

Land Law (2005)1 The Land Law regulates different forms of rural as well as urban land tenure (individual, state-owned private land, state-owned public land). Furthermore it regulates the management, organisation and exploitation of land. Among other regulations, the law (Art. 20) provides the basis for the land consolidation process by prohibiting 'the reduction of parcels of land of one hectare or less reserved for agriculture'. Besides land ownership rights, the law also regulates the leasing of state-owned land. One provision is that the receiver of any land has to fulfil the authorities' requirements regarding its management and exploitation, and the organisational land programme (Art. 23). Several provisions in the law make it easy to rescind farmers' land lease rights. 'Even if the contract provides a determinate period of time, the landowner may terminate the contract any time after giving notice (…)' (Art. 43). All agreements concerning concessions or leasing can be suspended for the implementation of the 'efficient land structural organisational chart' (Art. 21). In addition, the law regulates land registration and the transfer of land rights; it makes registration of any land owned by a person obligatory (Art. 30).

The law obligates landlords as well as the users of other people's land to obey laws and regulations promoting the protection, conservation and better utilisation of the land (Art. 61). This is to be based on 'the area’s master plan and the general structure of land allocation, organisation and use, and on specific plants certified by relevant authorities' (Art. 63). The law provides for sanctions if any land is not adequately conserved or used productively. In such cases, it determines that degraded and unexploited land may be requisitioned by state officials for a period of three years, which can be prolonged for another three years (Art. 73, Art. 74). The land owner or land user must apply in writing for repossession of requisitioned land, 'showing new strategies for its better exploitation,' and that they have the resources 'to immediately put the land to proper use in a sustainable way' (Art. 79). If 'degraded and unexploited land' was requisitioned for six years and if the owner does not apply for its repossession, it may be forcefully confiscated (Art. 75).

Law relating to expropriation in the public interest (2007)2 This law regulates cases in which land owners can be expropriated. Art. 3 determines that expropriation 'shall be carried out only in the public interest and with prior and just compensation'. Art. 5 defines 23 cases of public interest. Art. 7 states that dispossession of degraded and unexploited land as provided for by Art. 76 of the Organic Law is possible without just compensation of the land owner. The law (Art. 8, 9 and 10) determines which institutions are involved in expropriations, depending on whether they occur in a single district, several districts or at the national level. These include executive committees, land commissions, district councils, the minister in charge of land and the prime minister (at national level). Art. 12 provides for a consultative meeting to be held with the local population where the land is located, the results of which should be taken into account in the decision of the land commission. Under the law, compensation to the land owner must be calculated according to prevailing market prices (including the land and relevant activities) (Art. 22). Compensation may be monetary or material (alternative land) (Art. 23). If the person expropriated is not satisfied with the value determined for the land (and the activities carried out on it) they have to pay a legally accredited expert or the survey office to make an alternative valuation. Should this be rejected, the law will determine further legal steps (Art. 26).

The National Land Centre of the Republic of Rwanda states: 'There is no procedural or formal institutional framework for the law's implementation. Current interpretations and applications of it are inconsistent and in some cases open to abuse.' (National Land Centre, 2009: 7). In response to this challenge, the National Land Centre drafted a Procedures Manual for Expropriation in the Public Interest, which was published for consultation in May 2009. The Land Centre argues that the use of these guidelines ('as secondary and tertiary

1 Full Name: Organic Law No. 08/2005 OF 14/07/2005 Determining the Use and Management of Land in Rwanda 2 Full Name: Law No. 18/2007 of 19/04/2007 relating to expropriation in the public interest 19

Framework rules and regulations under the main law') should be mandatory. Until now this has not been approved by the government.

Current situation of land access and land distribution Access to land is a major challenge for Rwandan farmers. The average plot size in Rwanda is 0.81 ha (EICV, 2006). In 2002 11.5 % of the Rwandan population was landless, 28.9 % of the population owned less than 0.2 ha of land, and in some regions the share of the population with access to less than 0.2 ha land was as high as 60 % (Butare, Gikongoro) /24/. In 2006 more than a quarter of agricultural households cultivated less than 0.2 ha, around 50 % of them cultivated less than 0.5 ha, and more than 60 % cultivated less than 0.7 ha. Fewer than five per cent of agricultural households cultivated more than five ha /25/. More recent data on the percentage of landless population is not available.

Gini coefficient: 0.53

100

40 Percentage of land

0 0 20 40 60 80 100 Percentage of households

Fig. 7: Gini coefficient of land distribution in Rwanda, authors' illustration according to MINAGRI statistics /26/

While the problem of insufficient access to land can be partly attributed to the high population density (2006: 321 people per km²), a major contributing factor seems to be the highly unequal distribution of land. Rwanda has a very high and increasing Gini coefficient in terms of land per capita (1990: 0.43; 2000: 0.54). One study of smallholder land distribution involving 2,000 households indicates that, on average, the highest per capita land quartile has control over about 8-20 times more land than households in the lowest quartile /27/. It should be pointed out this the study only analysed land distribution among smallholder farmers, meaning that farmers owning the largest land areas (i.e. not smallholders) are not taken into account. There is an apparent lack of data to reflect these large-scale land owners. It would be important to include such statistics, as it is common knowledge among experts on Rwandan agriculture that land holdings of hundreds or even thousands of hectares exist. Many of these are held by government and military representatives, other members of the urban elite, and foreign investors. Here it is important to distinguish between land ownership and land leasing. According to a new presidential order, land ownership must not exceed 25 ha. This order does not apply to leased land, which is not subject to any ceilings. There seems to be a growing trend for the most productive lands (marshlands) to be

Framework leased to investors or producer associations. This is in line with the Rwandan Government’s aim of land consolidation /31/ (see also Land Law and National Land Policy above).

The existing legal and political framework, and the current situation regarding land access and land tenure are examined further in the analysis of food security (Chapter 3.3.) – an area in which secure land access is very important.

II.1.4 Population (by German Biomass Research Centre)

According to the National Institute of Statistics /28/, Rwanda’s population was 8,128,553 in 2006, which marks a steady and rapid increase from more than 2,000,000 in 1950, and 5,200,000 in 1980. The number is expected to reach 13,200,000 in 2020 /29/ (Fig. 8). The increase is essentially due to rapid demographic growth. For 2002, the natural growth rate is estimated to have been 2.6 % and the fertility rate 5.9 % /30/.

14000000

12000000

10000000

8000000 population 6000000

4000000

2000000

0 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 year

Fig. 8: Development of population in Rwanda from 1950- 2030. Authors' illustration based on UN figures /29/

With an average of 321 inhabitants per km² in 2006, population density is high across the country. Fig. 9 shows the distribution of population density according to district. With more than 1,500 people per km², Kigali has a very high population density, and the northern regions of the country are also densely populated.

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Fig. 9: Population density per sector (2006). Authors' illustration according to NISR /28/

II.2 Agriculture (by Dr Valens Mulindabigwi, University of Cologne)

Subsistence agriculture remains the predominant farming system in Rwanda, characterised by small family farms (more than 30 % of family farms have only 0.5 ha at their disposal). According to Bigagaza and Mukarubuga /19/, the different land acquisition forms are as follows: inheritance (69.9 %), purchase (11.4 %), state allocation (9.1 %), donation (6.5 %) and clearing (3.2 %). In 2000, each family farm had an average of 2.4 fields. These fields were – and are – widely scattered, often interspersed by the fields of other farmers. Considering the use of different plots for different crops, the farms also display another kind of internal fragmentation. The number of differently cropped plots within each farm ranges from one to 15 /31/. This fragmentation makes the farming systems economically and technically unviable. The area used to cultivate major food crops each year was estimated at just 0.08 ha per person in 2008. To limit this fragmentation of land, the Organic Law defines and recommends land consolidation as 'a procedure of putting small plots of land in order, to manage the land and use it in an efficient, uniform manner so that the land can give more productivity' (Organic Law N° 08/2005 of July 2005, Art. 2). The implementation of this law can already be observed, particularly in some marshlands and inland valleys. Activities on hillsides are also being planned at district level under the auspices of 'performance contracts'.

With its climatic, geographic and edaphic conditions, Rwanda has 12 main agricultural regions that are differently suited for a diversity of crops. While the central and western areas receive enough rain, the east is often subject to seasonal rainfall fluctuations, resulting occasionally in low agricultural production. The soil quality varies from excellent (Imbo region) to very poor (eastern savannah region). The main cultivated crops are bananas (cooking banana, fruit banana, banana brew), cereals (maize, sorghum, rice, wheat), roots and tubers (cassava, potatoes, sweet potatoes, taro, yam), legumes (soya, beans, peas), crops purely for export (tea, coffee, pyrethrum), fruits (avocados, pineapple, passion fruit, guava, papaya, citrus), vegetables (cabbages, carrots, amaranths, squash, aubergines, tomatoes, onions). The distribution of the main crops and trees according to cultivated areas is 22

Framework shown in Fig. 10, below. In terms of areas devoted to food crop cultivation, the major food crops are bananas (21 %), beans (20 %), cassava (9 %), sweet potatoes (9 %), potatoes (8 %), maize (8 %) and sorghum (8 %) in 2008.

Over the past 15 years, new cultures have been introduced, such as macadamia, moringa and flowers. At the same time, other crops have disappeared or are disappearing in some parts of Rwanda due to the demographic pressure on land. This is the case with millet (Eleusine coroacana), which has not been seen in the agricultural statistics since 1990, yams, which have become increasingly insignificant since 1969, and sorghum, which is disappearing in some parts of the central plateau. Spatial and temporal crop distribution is determined by the altitude and topography, as well as the rainy seasons. Rwandan agriculture is not artificially irrigated; it is essentially rain that determines the following agricultural seasons: season A (mid September-January/February), season B (March-July) and season C (July-September). While seasons A and B correspond respectively to the small and the long rainy seasons, season C matches the long dry season. Then, farmers often grow crops on marshlands and in inland valleys where water is still available. Although the cultivated area during season C is not large, this growing period is important for food security. Indeed, it not only helps with food production, it also provides seed, and especially sweet potato cuttings for use during season A, when cultivation takes place primarily on hillsides.

Forest 11%

Cash Pinus crops Eucalyptus 1.2% 4% 10.0% Banana Food Pyrethrum 17.0% crops 0.4% 85% Tea 1.3% Coffee Fruits 2.7% 1.8% Vegetables 2.6%

Taro & Yam 1.5% Beans 16.4%

Cassava 8.0%

I. potato Peas 6.2% 1.9%

Groundnut 1.0% S. potato Soya 7.3% 3.0% Sorghum Rice 7.0% 0.9% Wheat Maize 2.6% 7.1%

Fig. 10: Distribution of the main crops and trees by cultivated area, 2008. Authors' illustration according to Ministry of Agriculture statistics /73/ The farming systems are also characterised by the use of crop rotation and intercropping with plants that have been adapted by farmers to cope with land scarcity. Therefore, more than four crops (e.g. taro, cassava, beans, bananas, maize) can often be found growing at the same time on the same plot. The farmers' ingenuity with crop rotation allows a succession of crops over time and in the available space, which ensures sustainable land use. However, this ingenuity is the result of the great scarcity land which has forced farmers to abandon the use of fallow periods. Generally, areas of fallow land are almost non-existent in Rwanda, or they do not remain fallow 23

Framework for more than three years. In Ruthenberg's classification of farming systems /32/, Rwanda is characterised by continuous cropping systems, in which cropping intensity is very high /20/ and fallow periods are too short for the soil fertility to regenerate.

Overexploitation associated with heavy rains, steep slopes, tillage systems (often increasing runoff) and a lack of anti-erosion structures accelerates land degradation. According to some estimates, Rwanda loses 1.4 million tonnes of soil each year, which could be used for cultivation and feed 40,000 inhabitants /33/. The soil loss per hectare from cropped hillsides is estimated at 80 to 100m3 per year. MINAGRI, cited by USAID, estimates the annual losses of soil nutrients due to erosion as 945,200 t of organic materials, 42,210 t of nitrogen, 280 t of phosphorus, and 3,055 t of potash /34/. In 2006, Rwanda imported only 9,039 t of fertilisers /35/ to compensate for this loss of soil nutrients. Long before the arrival of Europeans in Rwanda, farmers had farming systems which protected the land against erosion. Since the colonial period, erosion control has been enhanced. However, the peasants were always forced to dig anti-erosion ditches without taking local conditions into account /21/, and as a result did not perceive the structures as their own. The drying-up of some water sources (due to run off being faster than infiltration) and the large amount of soil transported by erosion are signs of the failure of the erosion control. Currently, a radical programme of terracing is being implemented at district level through the contracts performance.

Productivity of main food crops: past and present

Pea

Bean

Cassava

S. potatoe 2004 - 2008 1957 I. potatoe

Maiz e

Sorghum

Wheat

0 1.5 3 4.5 6 7.5 9 10.5 12 13.5 15 Productivity (t/ha)

Fig. 11: Past and present productivity of selected food crops. Authors' illustration according to Ministry of Agriculture/Leurquin /73/, /76/ The land degradation and resulting deterioration in soil fertility have lowered the soil productivity. Despite the efforts to intensify agriculture (intensification technology package: mineral fertilisers, manure, improved seeds, liming, erosion control), soil productivity has declined or remained stagnant. Compared with 1957 figures, the average yields of most crops, except wheat, potatoes and beans, were lower in the period 2004-2008 (Fig. 11). The efforts to intensify agriculture did not compensate for the reduction in fallow periods. A policy of crop regionalisation is now being implemented, and the current policy of agricultural intensification links the technology package with that regionalisation as well as the land use consolidation. The picture below shows an example of land use consolidation in the District Muhanga. This is an inland-valley where the crop rotation is maize-beans-potato. The farmers still maintain their own small plots but they all have to cultivate the same crop.

Framework

Fig. 12: Land use consolidation in an inland valley in Muhanga District, Southern Province Livestock has an important role in Rwandan agriculture as a provider of manure to fertilise the plots. The goal – or desire – of every family in Rwanda is to own cattle: in the context of intensive agriculture this is especially relevant for the production of manure and milk. While livestock is much more extensive in the east, in the rest of the country it is intensive and characterised by zero grazing, which allows the farmer to produce more manure. An ongoing national ‘One Cow Per Poor Family’ project is intended to help poor farmers obtain a cow. However, the mission observed that some farmers had received cows despite already owning some. According to several farmers in Kayonza, Kamonyi and Muhanga who are still without cows, they are unable to obtain one as they do not have the FRW 5,000–10,000 needed to bribe the people who are supposed to put them on the waiting list. This observation was confirmed in December 2009 in a report issued by the Rwandan Ombudsman during the national dialogue conference. Of around 70,000 cows distributed, 17,500 (25%) were identified in December 2009 for repossession by the government /36/.

II.3 Food security (by Julia Sievers, GIZ)

Food insecurity and poverty are problems which particularly affect rural areas in Rwanda. According to the World Food Programme (WFP) /37/, 28 % of the population was food insecure in 2006, with 24 % classed as highly vulnerable to food insecurity. Only 22 % of the population was considered to be food secure. Large differences between different regions exist: Bugesera, Crete of Nile, Lake Shore and Eastern Curve are the food economy zones most affected by food insecurity. A new WFP study in 2009 provided information on food consumption scores (rather than food security as defined in the 2006 study), which are seen as indicators of food security. According to the 2009 study, 4.2 % of the population had a low food consumption score, 17.3% had a borderline score, and for 78.5 % the score was acceptable /37/. It should be noted that comparisons between 2006 and 2009 are questionable, since very different categories, definitions and methodologies were used to 25

Framework measure food consumption and food security.3 Although WFP claims that food consumption scores were better in 2009 than in 2006 and concludes that this 'may reflect a general trend towards better food security', it must be stressed that if the methodology, definitions and categories of the 2006 study had been used, they would have produced a worse picture of the situation in 2009. It should also be mentioned that the 2009 study was conducted in February, directly after the harvest (season A), while the 2006 study was conducted in March-April, during a lean period. Therefore WFP's statement that it is possible the 'observed differences result from cyclical changes rather than long-term trends' should be underlined. Seasonal variations are high (seasonal hunger); lack of access is particularly severe in the months before harvests (mainly in March/April and September/October). Among different rural livelihood groups, agricultural labourers are most affected by food insecurity while employed agriculturalists are least affected /31/.

Analysis of recent trends in child malnutrition shows a mixed picture. Acute malnutrition decreased between 2000 and 2005 (underweight: decrease from 25 % to 23 %; wasting: decrease from seven to four per cent). Between 2006 and 2009, wasting increased slightly (2009: 4.6 %), while the number of underweight children fell (2009: 15.8 %). At the same time, rates of chronic malnutrition (stunting) are very high and continuously increasing. Chronic malnutrition increased from 43 % to 45 % between 2000 and 2005 /31/ and rose to 52% in 2009 (WFP, 2009).

Ensuring food security is one of the aims of the Rwandan Government's Economic Development and Poverty Reduction Strategy (EDPRS, 2008-2012). In this context, the main task and strategy is mentioned as being to increase agricultural productivity. While 'basic food production is scheduled to rise by 15 % over the EDPRS period', the strategy focuses on export-oriented agriculture /25/.

3 Comparisons of the methodologies show that the Food Security Analysis of 2006 is more comprehensive, it includes more indicators. 26

Framework

The food security situation – especially the causes of food insecurity and related challenges, which are particularly relevant for the biofuel potential analysis – will be analysed further in Chapter 3.3.

Fig. 13: Percentage of food insecure households (FCS: food consumption score) in food economy zones. Taken from WFP /37/

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II.4 Energy sector (by German Biomass Research Centre)

II.4.1 Energy policies Rwanda’s energy policy is mainly based on three documents which were elaborated after intensive stakeholder consultations: the National Energy Policy (an update of the 2004 Energy Policy Statement), the National Energy Strategy for 2008-2012 and the Biomass Energy Strategy (BEST) from 2008. The rationale behind these documents is that increased energy provision is a prerequisite for strong economic growth, which in turn is seen as a prerequisite for tackling poverty effectively.

The National Energy Policy from the Ministry of Infrastructure (MININFRA) sets the stage for energy policy development in Rwanda. It includes general statements on overall objectives, the development of indigenous energy resources, the importance of energy efficiency measures, energy pricing and subsidy policies, the regulatory framework and the sub-sectors. In the biomass sub-sector, the production of wood fuel and charcoal from plantations and woodlots is to be expanded and better managed, while the use of briquettes from under- exploited forms of biomass (peat, papyrus, waste) will be promoted for cooking and heating, alongside kerosene, LPG, and solar water heating. Small-scale biofuels projects will be supported, and careful research will be carried out to assess the potential for large-scale biofuel production in Rwanda. Oil exploration activities are underway in the petroleum sector, and pipeline and rail projects will be analysed to reduce the costs and enhance the security of supplies of petroleum products. In the electricity sub-sector, access to electricity will be enhanced, particularly in rural areas, with the costs being reduced and the sources diversified.

The National Energy Strategy for 2008-2020 outlines the current and forecasts the future energy situation (see II.4.2), and describes the main programmes with which MININFRA is promoting the overall objectives of the National Energy Policy.

The Biomass Energy Strategy (BEST) from 2008 will provide a basis for long-term planning and cross-sectoral policies to ensure a sustainable biomass (fuel wood) supply, as well as the introduction of efficient technologies (e.g. improved stoves and kilns). This, in response to the fact that 85 % of Rwanda's primary energy balance derives from biomass.

II.4.2 Energy supply and demand In 2007, total primary energy supply in Rwanda amounted to 1.61 million tonnes of oil equivalent (TOE) or 67.49 peta-joules (PJ) /38/. Biomass is by far the largest source, with firewood and wood for charcoal making up 80 % of the total, and agricultural residues and peat another six per cent. Petroleum fuels account for 11 % (of which 75 % are used in the transport sector), and electricity for three per cent (Fig. 14). With 0.17 TOE/capita p.a., Rwanda has a very low per capita energy consumption, even compared to the rest of sub- Saharan Africa (0.6 TOE/capita p.a.). The available electricity capacity amounts to 55 MW, of which 23 MW derive from thermal power plants, 20 MW from hydropower plants and 11.5 MW are net imports. The installation of up to 150 MW of additional capacity is planned for 2012. 100 MW of this are to come from a methane gas power plant being installed by international investors at Lake Kivu. Work on this project started in 2009 and the first 25 MW are expected by the end of 2010. In addition, a number of smaller and larger dams for hydropower generation are currently under construction.

Framework

Wood for charcoal 23%

Petroleum products Wood 11% 57% Agriculture, peat Electricity 6% 3%

Fig. 14: Primary energy balance. Authors' illustration, according to GTZ and MININFRA data /38/, /39/ Access to electricity is very low in Rwanda, with only 25 % of urban households and three per cent of rural households being connected. Industry and services (public and private) account for over 60 % of sales by the public enterprise ELECTROGAZ, which had about 100,000 customers by the end of 2008. Per capita consumption of electricity is therefore very low in Rwanda (20 kWh/capita p.a.) compared to 478 kWh/capita p.a. in sub-Saharan Africa as a whole, and 1,200 kWh/capita p.a. in other developing countries. This is due not only to the lack of access but also to the high price per kWh. In mid 2008, the price was FRW 112 (USD 0.21) per kWh for domestic consumers and FRW 105 (USD 0.19) per kWh for large commercial and industrial consumers (plus VAT). The goal of the Energy Sector Strategic Plan (ESSP) is to reduce tariffs to the 2005 level, i.e. FRW 80 (USD 0.15) per kWh, and to establish 350,000 new connections by the end of 2012, through the Electricity Roll Out Programme. Access to electricity will increase from 4.5 % (2008) to 35 % by 2020. Currently, the national transmission grid consists of only 285 km of 110 kV lines and 64 km of 70 kV lines, as well as the distribution system of medium voltage (6.6 – 30 kV) and low voltage (380 V three-phase and 220 V single-phase) networks, which are mainly concentrated in Kigali. It is planned to extend the national transmission grid by 1,700 km within the next four years in order to increase transmission capacity and the number of connections /23/.

Table 2 shows projected average annual growth rates for the population and the economy between 2008 and 2020. To allow for the seven per cent economic growth, electricity generation (17 % p.a.) as well as the consumption of petroleum products must increase at a disproportionately high rate in the time period /23/.

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Table 2: Average annual growth rates 2008-2020 /23/

Average Annual Item Units 2008 2020 Growth (%) Population No. 9,886,767 2.3 13,000,000 GDP m USD 3,460 7 7,800 Households with electricity No. 92,000 21 1,011,111 Biomass (net) TOE 1,108,600 2.3 1,435,700 Petroleum products m litres 225 10.5 758 Electricity – energy GWh 225 17.1 1,429 Electricity – capacity (incl. MW 55 17.4 360 regional supplies) Primary energy (gross) TOE 1,652,500 4.3 2,745,020

II.5 Transport sector (by German Biomass Research Centre)

Rwanda’s transport sector is entirely dependent on imported fuel and consumes approximately 75 % of all the country's imported petroleum products. Gasoline and diesel predominate, and 167 million litres were consumed in 2008 (Table 3). Demand is forecast to grow at around 10 % per annum until 2020. Imports of petroleum products constitute around 25 % of the total import value of the national economy /23/. Diesel consumption is about 38 % higher than gasoline. Around 52 % of diesel imports are dedicated to the transport sector, with the rest used for electricity generation /38/. The pump price for both gasoline and diesel is approximately USD (FRW 756) 1.38 per litre (March 2009) /41/. Being a land-locked country, Rwanda has to import petroleum products using long and expensive routes. The main supply routes are in the Northern corridor (through Kenya and Uganda), and through Tanzania. The limited choice of routes means that Rwanda is dependent on the political stability of the neighbouring regions and is particularly vulnerable to interruptions of supply. Together with fuel price fluctuations on the international market, this increases the uncertainty surrounding the security of supply in the country. Reserves are limited to less than two months supply. This will be improved after the rehabilitation of existing storage facilities (Bogogwe, 4,700 m3; Rwabuye 3,600 m3) and the building of new ones /23/. In terms of indigenous fossil fuel resources, some regions have been identified as potential sources of methane and oil (e.g. Lake Kivu, Rift Valley) and there are prospects for future exploitation here.

Framework

Table 3: Gasoline and diesel: imports and consumption /41/

Total (l) Gasoline (l) Diesel (l) Year (incl. kerosene, fuel oil) Imports Consumption Imports Consumption Imports Consumption 2004 51,572,086 56,094,877 51,669,767 51,650,149 125,319,542 131,753,428 2005 60,013,426 58,456,883 66,425,107 67,206,970 149,842,156 148,190,364 2006 67,334,373 64,975,943 93,251,081 90,578,745 180,065,930 174,606,331 2007 67,537,667 68,812,890 99,171,499 98,354,362 185,206,065 186,866,855 2008 66,203,425 70,370,073 95,941,102 97,157,909 182,986,416 186,720,581

Over 90 % of transport in the country takes place by road. There are no railways, and waterways are only used to a limited extent. Vision 2020 envisages the development of a railway network to join up with the Tanzanian and Ugandan railway systems /40/. Rwanda has a road network of around 14,000 km, 19 % of which are paved /42/. Table 4 shows the number of registered vehicles in the country as of May 2009. Table 4: Registered vehicle fleet /39/

Number Type 2009 Registered vehicles 2007 2008 (until May) (cumulative) Bus 46 91 11 261 Car 1,804 1,921 629 15,604 Semi-trailer 12 23 6 136 Jeep 1,031 1,331 480 9,752 Microbus 13 15 7 106 Minibus 212 657 76 4,647 Motorcycle 5,115 7,735 2,013 30,280 Pick-up 1,290 1,226 375 11,046 Special engine 83 62 23 272 Trailer 120 49 13 659 Truck 300 196 55 2,372

Potentials Analysis

III. Potentials Analysis

III.1 Agricultural system analysis (by Dr Valens Mulindabigwi, Agricultural scientist, Institute of Ethnology, University of Cologne)

Measures have been taken since the colonial period to improve erosion control and agricultural production. Many agricultural projects throughout the country introduced new technologies, such as fertiliser use and the selection of new varieties, but did not take into consideration the profitability of each cropping system. However, profitability is a key factor in changing from subsistence agriculture to intensified agriculture. To evaluate the profitability of different crops in different farming systems (current cropping systems, intensified cropping systems and cropping systems on marginal lands), the contribution margin and net operating income are calculated.

III.1.1 Definitions and approach Cultivated area of food crops: This does not include short-term fallow areas, or areas with perennial crops. The cultivated area refers only to areas cropped with tubers, cereals, leguminous plants and bananas.

Intensive agriculture involves farming systems characterised by high soil productivity resulting from the use of efficient technology. The main measures taken to increase agricultural production in Rwanda include mineral and organic fertilisation, liming, plant protection, the use of improved seeds, and erosion control. Using agroforestry and crop rotation make the systems more sustainable.

Subsistence agriculture is a form of farming generally using traditional technology and low inputs to produce mainly food crops. Crops and livestock are produced predominantly for consumption by farmers and their families rather than for sale. More than 80 % of Rwandans are involved in subsistence agriculture. The farmers also cultivate cash crops (e.g. coffee or tea) as a secondary source of income, and may also generate agricultural surplus for sale. This is the case, for example, with beans and sorghum in the Eastern Province and cassava in the Southern Province. The farmers can also rely on food purchases or might have to sell their produce without having a surplus (e.g. sweet potatoes in Southern Province).

Market-oriented agriculture is a farming system in which crop growing and animal husbandry are done to generate profits by meeting the demands of the market. It is primarily cash crops that are cultivated, not only for export but also for the local market. The main cash crops in Rwanda are coffee, tea, pyrethrum, rice, potatoes, tomatoes and pineapples.

Intercropping is a system of farming in which two or more crops are grown together on the same plot.

Integrated farming is a system of agricultural production with a high level of agro-sylvo-pastoral diversification, which uses sustainable production techniques. The linkage between agriculture, forestry, agroforestry and livestock makes this is an efficient and sustainable form of land use.

Marginal productivity describes an output that results from changing an input by one unit, all other inputs remaining constant.

Three scenarios were developed.

1. Current cropping systems – not necessarily traditional systems

Potentials Analysis

2. Intensified cropping systems – characterised by the use of efficient technologies (mineral fertilisers, organic fertilisers, erosion control, use of improved seeds, plant protection), 3. Cropping systems on marginal land

For each cropping system (e.g. sweet potatoes, wheat) the fixed and variables production costs, total income, contribution margin, net operating income and the yield at break-even point were calculated.

Economic analysis of the farming systems

Total production costs are equal to variable costs plus fixed costs.

In this study, fixed costs refer to the costs for agricultural equipment and for the leasing of land.

Variable costs include the costs for labour, fertilisers (mineral and organic), pesticides, seeds or seedlings, and the costs for technical assistance.

Labour costs were estimated according to Rutunga, Janssen, Mantel and Janssens /17/ as well as the estimates of agricultural advisers of CSC-UGAMA and DUHAMIC ADRI. The current cost of one working day is FRW 500 (information from farmers).

For fertiliser costs, the estimates were based on the recommended amount of mineral fertilisers and manure per ha (MINAGRI, 2007). The price of mineral fertilisers changes with fertiliser composition (around FRW 700/ha without subsidies), the price for manure was estimated at FRW 15/kg.

Costs of seeds or seedlings are based on the plant density per hectare (MINAGRI, 2007) and on the price of seeds or seedlings (estimates of agricultural advisors).

Total income is equal to the yield multiplied by the unit price of agricultural production. The crop yield and prices were obtained from MINAGRI, except for castor, jatropha and moringa. The estimated price of jatropha is based on the price in Tanzania /43/, and the yield is taken from the jatropha handbook.

The contribution margin is equal to the total income minus the variable costs.

Net operating income is equal to the contribution margin minus the fixed costs (or sales minus variable costs, minus fixed costs).

Break-even point is the point where the costs equal the income and there is no net gain or loss.

To determine a crop's yield at the break-even point, the following calculations are done:

Break-even point = contribution margin – fixed costs = 0

0 = revenue – variable costs – fixed costs

0 = (yield * price) – variable costs – fixed costs

Eq. 1 vc f c Y BEP P

Y = yield at break-even point; vc = variable costs; f c = fixed costs; P = price per unit An overview of the calculations of contribution margin and net operating income and the sources of information is given in Table 5.

Potentials Analysis

Table 5: Calculations of contribution margin and net operating income Contents Sources of information/calculations Expenses per ha (a) Fixed costs Land lease FRW 2,000 per ha of marginal land and FRW 100,000 per ha of normal land, based on the highest market price for the free land (FRW 1,000 / are / 6 months for tomato production)4 Agricultural equipment Interest Rate of 15 %, constant annuity (3 years) (b) Variable costs Labour Estimation of the number of working days: Rutunga (2007) and agricultural advisors' estimates; For establishment of perennial crops (banana, coffee, jatropha,…): interest rate of 15 % and constant annuity depending on period of plantation (see annexes)

Seeds/seedlings quantities: MINAGRI (2007), jatropha handbook, Mémento de l'agronome Price: from agricultural advisors Mineral fertilisers idem Manure idem Pesticides idem Transport Authors' estimation Technical assistance Information from agricultural advisors Total production costs = (a) + (b) Income per ha Yield (kg/ha) Price (FRW/kg) (c) Total income = yield * price Contribution margin = (c) – (b) Net operating income = (c) – (b) – (a) Profitability Net operating income > 0: profitable Net operating income < 0: not profitable Net operating income = 0: Break-even point USD 1 = FRW 550.81

For the amortisation of the setup costs and the equipment costs for perennial cropping systems, the following equation was used to determine a constant annual figure (see Eq. 2):

4 Land lease for production of potatoes in Musanze (Northern Province) was between FRW 500,000 – 750,000 per ha p.a. in 2009 (http://www.izuba.org.rw/index.php?issue=330&article=11164)

Potentials Analysis

Q P r 1 r n Eq. 2 CA 1 r n 1

CA = constant annual figure; Q = Quantity; P = Price per unit; r = interest rate; n = number of years

III.1.2 Development of the cultivated area in Rwanda The development of cultivated areas of food crops is illustrated in Fig. 15. Up to the end of the 1980s, it was possible to increase agricultural production and adapt it to the food needs of the population. This was due in particular to the exploitation of land in the east-central, eastern and north-eastern Rwanda. The extension of the cultivated area was achieved at the expense of pastures, natural formations and fallows. According to Corbin /44/, the options for extending the cultivated area by clearing new land were almost exhausted between 1980 – 1989. Instead, further extension has mainly been achieved by reducing the fallow period or by occupying marginal lands. However, land exploitation, for example on the Congo-Nile watershed, allowed farmers to settle.

1990 – 1998 was characterised by insecurity, loss of inhabitants, the abandonment of farms and, later on, by the return of Rwandan refugees. It was also during this period that a part of Akagera National Park was allocated for agro-pastoral activities.

Since 1998 there has been a slight increase in the cultivated area, due to the re-use of farmlands abandoned during the wars and the exploitation of a part of Akagera National Park.

Food crops: development of cultivated area

1 800 000

1 600 000

1 400 000

1 200 000

1 000 000

800 000 Hectares 600 000

400 000

200 000

1990 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Cereals Pulses, oilseeds Roots & tubers Banana Total area

Fig. 15: Development of cultivated area in Rwanda: 1990-2007, Authors' illustration according to MINAGRI /45/ The general characteristics of the development phases of the cultivated area /46/ show that, with the exception of Eastern Province, Rwanda is undergoing a phase of irreversible ecological degradation, which involves the following phenomena: stagnant expansion or decrease of cultivated area, disappearance of fallows, permanent cropping systems, irreversible degradation of soils, land cover and hydrology, disappearance of bushfires, individual (instead of collective) use of spatially limited land, land conflicts between individuals rather than between communities, a significant level of rural-urban migration and emigration, more women than men

Potentials Analysis working in agriculture, unsustainable human burden on the land and insufficient agricultural production leading to structural food insecurity.

With the fall in area of cultivable land per inhabitant, farmers tried to meet their food needs mainly by raising the cropping intensity (which led to the shortening of fallow periods), and through intercropping and crop substitution.

Recently, the minister of agriculture reported that growth in agriculture is about 11 percent /47/. However, people interviewed by Gasarasi /48/ and a report from the advocacy group Action Aid have sounded a warning about the persistence of hunger /49/. Since August 2009, there has been a considerable increase in food prices in Rwanda, particularly for vegetables, beans, potatoes and cassava. How is it possible to explain this paradoxical situation, where agricultural growth and an increase of food prices coincide with the persistence of food insecurity? The efforts of the government to improve soil productivity by intensifying agriculture have achieved positive results for some food crops, particularly cassava, maize, rice and wheat. However, these crops make up just 16 % of the total cultivated area for food crops. Other major food crops, such as sweet potato and sorghum which, especially in rural areas, are important for the security of the food supply (16 % of cultivated area in 2008) have been neglected by the intensification programme. Between 2004 and 2008, the total production of sweet potatoes and sorghum decreased, respectively, from 454,153 to 413,220 tonnes (annual decrease: 1.8 %) and from 81,886 to 72,209 tonnes (annual decrease: 2.4 %) (see Table 6). Seen in the light of the annual population growth (2.8 %), the intensification programme failed to achieve any significant change in the production of some primary food crops. From 2004 to 2008 production of bananas rose by 1.1 % and potatoes by 1.7 %. This is still very low in terms of the population's need for food (bananas and potatoes make up 21 % and 8 % of cultivated area for food crops). The intensification programme represents a considerable improvement of agricultural production on 16 % of the cultivated area. If these ongoing efforts and policies were implemented with the participation of the farmers, the results of agricultural intensification could rapidly be extended to other crops and areas.

Potentials Analysis

Table 6: Development of production and productivity for some of the main food crops in Rwanda Crops Production Productivity 2004 2008 (t) Annual increase 2004 2008 Annual increase (t) (%) (kg/ha) (kg/ha) (%)

Banana 1234,871 1301,974 1.1 6,636 7,022 1.2 Beans 99,112 154,282 11.1 605 910 10.1 Cassava 456,054 840,912 16.9 6,409 11,863 17.0 Potato 536,386 580,971 1.7 6,136 6,358 0.7 Sweet potato 454,153 413,220 -1.8 5,705 5,493 -0.7 Sorghum 81,886 72,209 -2.4 962 1,058 2.0 Maize 44,105 83,426 17.8 702 1,074 10.6 Rice 23,095 41,012 15.5 3,244 3,354 0.7 Wheat 8,386 33,934 60.9 743 925 4.9

Many agricultural projects throughout the country have introduced new technologies, such as the use of fertilisers and the selection of new varieties, but did not consider the profitability of each cropping system. However, the profitability of the cropping system used is a key factor in changing from subsistence to intensive agriculture. To evaluate the profitability of different crops in different farming systems, the contribution margin and net operating income were calculated. The results are described below and are also presented in Table 19 in the annex.

III.1.3 Profitability of current cropping systems Since the 1970s there has been a rapid succession of agricultural intensification policies. Nevertheless, the farming systems are still dominated by traditional production techniques with little or no use of mineral fertilisers and lime, organic fertilisers, improved seeds, erosion control, plant protection, or irrigation. As a result of this, and due to the shortening of fallow period, crop productivity is naturally low. However, some farmers are now beginning to intensify their systems for crops such as tomatoes, onions and rice by adopting technology packages for intensification (improved seeds, mineral and organic fertilisers, irrigation, plant protection, liming, erosion control). Since 2008, there has also been a marked increase in the production of Cassava, due not only to the extension of the cultivated area (70,363 and 78,935 ha respectively in seasons 2007-A and 2008-A) but also to a rise in productivity (5.6 and 12.4 t/ha respectively in 2007-A and 2008-A). The improved cassava production was the result of efforts by governmental and non-governmental agricultural service providers to introduce early and very productive varieties. However, two challenges must be met to ensure the crop's sustainability:

Cassava processing must ensure a sustainable and remunerative price for the farmer.

In Southern Province, many plots are used to produce cassava plants. This makes it difficult to maintain a crop rotation system. Yet to sustain and improve the current cassava production levels, it is important that different crops are rotated on the same land.

The economic analysis (Table 19, Annex) shows that current farming systems are profitable only for tomatoes, onions, ground nuts, soybeans, cassava, sugarcane and rice. Due to the high productivity (tomatoes, onions, sugarcane) and/or to the high price (rice, ground nuts), the net operating income for these crops is positive. For sorghum, maize, wheat, beans, peas, sunflowers, pineapples and coffee, the current cropping systems are not profitable. In Southern Province, sunflowers for the production of vegetable oil are being abandoned. The main reasons for this are the low harvest (0.6 t/ha) and poor oil extraction rates (four kilogram's of seeds produce one litre of oil). However, sunflowers are a common energy crop which can be produced in different regions of

Potentials Analysis

Rwanda and adapted to almost all cropping systems in the country. Newly-introduced energy crops (moringa), native energy crops (castor) and others that may yet be introduced (e.g. jatropha) are not profitable under the current cropping conditions, when cultivated in plantations (Fig. 16).

Net operating income of the current farming systems

Eucalyptus Castor Moringa Coffee Pineapple Tomato Onion Sunflower Groundnut Soya Peas Beans Cassava S. Potato I. Potato Sugarcane Rice Wheat Maize Sorghum Banana

- 500 500 1 500 2 500 3 500 4 500 5 500 US$/ha/a

Fig. 16: Net operating income of the current farming systems in Rwanda. Authors' calculations and illustration

III.1.4 Profitability of intensifiedcropping systems In terms of current and potential productivity, Rwanda could double or even triple the productivity of most of its food crops by intensifying its cropping systems. This in turn could provide the basis in the medium and/or long-term for production aimed at food processing (e.g. cultivating vegetable oil sources such as soybean, peanut, sunflower, and maize). In intensified cropping systems, all crops except for coffee and castor should generate positive operating incomes. This will occur particularly where there are high levels of productivity (Fig. 17). At the break-even point for various crops, except coffee, (see Fig 17) yields are lower than the respective crops' actual potential productivity. The specific case of coffee is explained by the high quantities of fertilisers it requires (manure: 100 t/ha p.a.; NPK 20.10.10: 500 kg/ha p.a.). This means its marginal productivity is probably equal to zero. Whenever the input costs (particularly mineral fertilisers) are high, it can be difficult to make a profit. Although castor is a traditional plant in Rwanda, there are no improved varieties which produce higher yields in intensified cropping systems.

Potentials Analysis

Net operating income of intensified farming systems

Eucalyptus Castor Moringa Coffee Pineapple Tomato Onion Sunflower Groundnut Soya Peas Beans Cassava S. Potato I. Potato Sugarcane Rice Wheat Maize Sorghum Banana

-2 500 - 500 1 500 3 500 5 500 7 500 9 500 11 500 US$/ha/a

Fig. 17: Net operating income of intensified farming systems in Rwanda. Authors' calculations and illustration

Potentials Analysis

Crop yield at Break even point in intensified cropping systems (t/ha/a)

Jatropha… Castor Moringa Coffee Pineapple Tomato Onion Sunflower Groundnut Soya Peas Beans Cassava S. Potato I. Potato Sugarcane Rice Wheat Maize Sorghum Banana

0 5 10 15 20 25 30 35 40 45 50 Yield (t/ha/a)

Fig. 18: Crop yields at break-even point in intensified cropping systems Rwanda still has a long way to go to achieve agricultural intensification. The process does not only involve the adoption and application of modern production techniques; it is also a complex system that integrates social and economic factors. The following diagram illustrates the main technical and socioeconomic factors that must be taken into consideration if agriculture is to be sustainably intensified in Rwanda (Fig. 19).

Potentials Analysis

Vision and policies

Participation of farmers

Crops Land use regionalisation consolidation

Agricultural Erosion processing Crops rotation Access control to land Agricultural intensification Improved Irrigation seeds

Plants Fertilisation protection (organic & Access to mineral) + inputs Infrastructures liming

Agricultural Commercialisation

National and local planning

Fig. 19: Important factors for the sustainable intensification of agriculture in Rwanda. Authors' illustration

To accelerate sustainable intensification of agriculture, it is very important to understand the reasons for the failure of intensification in the 1970s and 1980s:

'Agricultural intensification programs introduced a few new profitable techniques, improved varieties or agricultural inputs visible on farms. One success was the rapid adoption of climbing bean varieties. The benefits of most programs, however, such as distribution of fertilizers and lime, were confined to the few farmers directly associated with programs. The government and many projects concentrated their efforts on control of soil erosion through terracing and agroforestry, important for soil preservation but insufficient for what farmers needed – increases in production. Although the government’s immense erosion control efforts were successful in terms of the kilometres of progressive terracing built throughout the country, the enforced nature of the communal labour to dig terraces caused bitterness on the part of the farmers. This resentment of enforced communal labour was a prime factor in the widespread opposition of farmers to the regime' /51/. While agricultural intensification policies before 2000 focused on adopting the technology package described above, those currently being promoted by the government – namely the regionalisation of crops and consolidation of land use – aim to accelerate the intensification of agriculture. However, experiences so far with the implementation of these measures have shown there is only a low level of approval for them among farmers and, in part, even resistance against them. Moreover, the importance of water in intensive agriculture remains marginal except in some cases, such as rice irrigation. Irrigation of fields on hillsides (e.g. using terraces) should certainly help achieve the intensification goals. When asked about the fertilisation of his plot, a farmer from Kayonza replied intelligently that 'water is fertiliser' (Ifumbire ni amazi). He explained that water is a production factor which is more limiting than fertilisers. ('If we have a normal rainy season we produce enough without 41

Potentials Analysis fertilisers.') Moreover, for any intensification to be properly sustainable, the farmers themselves must participate in the identification of measures, in programme planning and in carrying out the activities.

III.1.5 Profitability of cropping systems on marginal lands The demographic pressure on land forces farmers to exploit marginal areas which have been specifically allocated for forestation and/or pasture. These marginal plots are often occupied by food crops or temporally abandoned after their degradation. An economic analysis of these types of land use shows that it is not profitable to grow any crops (including jatropha) in these marginal areas. Only with eucalyptus plantations, which are generally located on marginal lands, is it possible to generate a positive net operating income (Fig. 20). Eucalyptus has the lowest production costs, and the high demand for its wood results in a profitable price. Examining a range of scenarios for low, medium and high jatropha productivity on marginal lands (estimated respectively at 0.25, 0.40 and 0.75 tonnes per hectare, mainly dependant on soil quality and water supply (rainfall) in Eastern Province), jatropha is seen to generate a positive net operating income of USD 18.85 per hectare in the case of the last scenario.

Net operating income of farming systems on marginal lands

Eucalyptus

Castor

Moringa

Jatropha high

Jatropha medium

Jatropha low

Coffee

Onion

Maize

Sorghum

-1000 -750 -500 -250 250 500 US$/ha/a

Fig. 20: Net operating income of farming systems on marginal lands in Rwanda. Authors' calculations and illustration

Potentials Analysis

III.1.6 Farming systems for energy crops in Rwanda Considering that in 2008 only 0.08 ha of land per person were under cultivation for food, it will be difficult to find any available land for new cropping systems that are not profitable or which do not contribute to food security. Even land that is considered available cannot justifiably be used, as the cultivated area per person is still very low.

Moreover, for agriculture to be sustainable it is important that the entire cultivable area should not be cropped at the same time. Each plot must be turned left fallow after a fixed cropping period. Considering the land scarcity and the negative net operating income of some energy crops in plantation systems, the main need is to identify workable systems for energy crops that are both economically and environmentally acceptable and sustainable.

Energy crops in integrated farming systems With integrated farming systems Rwanda can, in some cases, produce biofuel crops without using any additional agricultural land. In this way, energy crops such as jatropha, castor and moringa can be produced without compromising food production. Indeed, they even help to protect soils against erosion and can protect crops against damage caused by animals. Introducing such energy crops into the current cropping systems must be done on the basis of proper research. It should also involve the participation of the farmers themselves to ensure sustainability. The main farming systems for these crops are described in Table 33.

In 1945 and 1950, when there were no specific castor plantations, Rwanda exported 1,846 t and 2,390 t of castor seeds, respectively /52/. This produce derived from castor plants scattered around fields, particularly in banana plantations. This traditional agroforestry system still exists today, and it would be possible to improve it to produce castor seeds for biofuels. Unlike castor and moringa, for which there is already evidence of association with various other crops, for jatropha, the cropping systems still needs further research. The African cassava mosaic virus may be transferred by jatropha curcas, and the common bean is also susceptible to jatropha mosaic virus /56/. Therefore it is advisable to avoid jatropha plantations or jatropha trees near fields of cassava and beans. Jatropha would be much more suitable in the form of hedges used for erosion control. While ensuring it does not compete with fodder and food crops, it could be planted, for instance, as fences around anti-erosion ditches or on land which has no anti-erosion structures. The dissemination of jatropha cropping systems should, however, be based on the results of several trials on different sites and in different cropping systems involving research institutions (e.g. ISAR, IRST, NUR) and agricultural development services (e.g. RADA, NGO) (see Fig. 21). These trials should not only assess the productivity and adaptability of jatropha, but should also analyse its impacts on other crops, animals, water etc. Furthermore, farmers could be involved in these tests to help evaluation of the new crop. As with castor, moringa can also be combined with several food crops (though not in the banana fields if it is meant to produce seeds).

The 'jatropha belt' around the Akagera National Park consists of a 100m wide plantation encircling the park, bordered on both sides by jatropha fences. This not only produces jatropha seeds, it also prevents animals from the park or from the nearby farms from straying outside their respective areas. To make this project sustainable, a socioeconomic and environmental study should be carried out thoroughly, and discussions held with the population. The project must find acceptance, especially among the livestock owners who fear the toxicity of jatropha.

Potentials Analysis

Fig. 21: Jatropha field in an inland valley (good fertile soils) instead of on marginal land in Southern Province

Energy crops in plantations on marginal land It is not advisable to plant jatropha on marginal land, for a number of reasons. It has just low profitability and low yields, and it would compete with other uses of the land that are important for achieving food security. There are other uses of marginal land that are more appropriate, for example reforestation. Considering poverty reduction aims, it is important to maintain local people's access to land and prevent the further concentration of large amounts of land in the hands of a few private companies. A good model might be the example of the small coffee plantations scattered across different family farms, which benefit a large part of the Rwandan population.

Reforestation on marginal land A range of tree species (14 eucalyptus, three types of cypress, and 14 species of pine) are used for forestry in Rwanda, some of which are adapted to marginal lands. They are planted for diverse purposes, such as fuel wood, timber, mulch, construction poles, stakes and fencing /50/. While most eucalyptus trees are planted at all altitudes, the cypress and pine species are mainly cultivated at intermediate heights and in the highlands. Because of its adverse properties which degrade soil by decreasing its pH value as well as its cation exchange capacity, forestation with eucalyptus is likely to cause land degradation rather than land sustainability in the long term. The forestry sector would therefore do well to use much less acidifying forest systems and species. To avoid soil acidification through forestation in general, it has been recommended – without specifically considering marginal areas – that native species should be used (e.g. Entandrophragma excelsum, Polysciana fulva and Podocarpus falcatus), which have a high potential to improve soil quality /53/.

The planting of exotic species is also recommended (e.g. Grevellea robusta, Cedrala serrata, Eucalyptus tereticornis and Cupressus lusitanica), which only cause minor soil acidification. In Eastern Province, where macadamia trees were recently introduced, these should also be combined with forestation on marginal land as they also tolerate poor soils.

Potentials Analysis

Energy crops in the current cropping systems The oilseed plants described above (jatropha, moringa, castor and sunflower) could theoretically be cultivated and used for biodiesel production, if enough agricultural land was available. Possible cropping systems for starchy crops like cassava and sweet potato are already known, and these could also be used in ethanol production. Likewise, sugarcane could theoretically be used to produce ethanol, and the production systems of sugarcane are also familiar in Rwanda. To find ways of expanding its cultivated area, and understand the impact this would have on food security for the local population who have traditionally exploited the marshlands, will need careful consideration. In fact, Rwanda faces severe land scarcity. Until now agricultural intensification has not been successful at increasing the sustainable productivity of major crops. It remains uncertain if current intensification efforts will be more successful. The GAPP analysis conducted in this study shows that – considering productivity developments and population growth – there is no surplus land available for biofuel production because the land is needed for food production.

III.1.7 Possible energy crops for biofuel production in Rwanda (by German Biomass Research Centre)

Many different starch or sugar-derived feedstocks can be used mainly for the production of bioethanol, while the feedstock derived from the various oilseed varieties can serve to produce biodiesel. In the following section, possible energy crops are described according to the identified farming systems for energy crops in Rwanda. The yields presented for the feedstock are bandwidths or average yields, taken from different sources in the literature. The suitability maps presented below refer to Rwandan conditions. They are based on the typical agronomic conditions of the plants and are provided by GTZ/ICRAF /54/. There are multiple uses for different parts the crops (medicinal and food uses), but the focus here is on their use for energy purposes.

Potentials Analysis

Jatropha (jatropha curcas L.) jatropha in Rwanda

A jatropha plant B jatropha plantation C jatropha fruits

Short description Jatropha is a small tree or large shrub that belongs to the Euphorbiaceae family. It grows up to 7m high and has a life expectancy of up to 50 years. The leaves are smooth, 4–6 lobed and 10–15 cm in length and width. The plant develops a deep taproot and initially four lateral roots. It is monoecious and the final inflorescence contains unisexual flowers. After pollination, the inflorescence forms a bunch of green fruits. 90 days after flowering, maturity is reached, but not all the fruits mature at the same time. The blackish seeds contain toxins (e.g. phorbol esters, curcin) to such an extent that the seeds, oil and seed cake are not edible without detoxification. Agronomic conditions Rainfall: 480-2,380 mm Temperature: 18-28.5 °C Altitude: 0-1,650 m above sea-level Soils: sandy and well drained; well adapted to marginal soils with low nutrient content Seed yields and characteristics Fruit: capsule composed of husk and seeds (ratio 35:65) Seed yields: 0.25-6 t/ha p.a. In the wild, individual plants exhibit great variability in productivity. Seeds: composed of a shell and kernel (ratio of 40:60) Shell: 19.4 MJ/kg (calorific value) Kernel: mainly contains crude fat and protein, 30.4 MJ/kg (calorific value) Oil content: dry seed on mass basis is 34.5 % Products and co-products: characteristics and use jatropha husks Can be used as an energy source (combustion) jatropha press cake Contains various toxins and is therefore not usable as fodder (without detoxification), but it could serve as an organic pesticide/insecticide (long term impact on soils has not been investigated); it is also an organic nutrient source, usable as fertiliser; it can be used as a biogas feedstock. Sources: /55/, /56/

Potentials Analysis

Moringa (Moringa oleifera)

Moringa in Rwanda: A moringa plantation, B moringa tree, C moringa fruit (tree), D moringa seeds, E moringa seeds Short description Moringa is an oilseed shrub or tree that belongs to the Moringaceae family. The plant grows in tropical or subtropical climates. It is a fast-growing and drought-resistant tree which can grow up to 10 m high. The leaves grow alternately and large (up to about 90 cm long), bearing leaves in opposite pairs. Leaves are dark green and variable in size and shape. It produces flowers throughout the year, in loose axillary panicles up to 15 cm long. The fruit is a large, light brown pod, up to 90 cm long and 12 mm broad. It splits along either side to expose the rows of rounded, blackish oily seeds. Dried seeds are round or triangular shaped and the kernel is surrounded by a lightly wooded shell with three papery wings. Agronomic conditions Rainfall: 250-5,000 mm/a Temperature: 12.6 to 40 °C Altitude: 0-1,650m above sea-level Soils: adapted to a wide range of soil types (it grows well in well drained clay or clay loam without prolonged waterlogging, but it can also tolerate poor soils)

Seed yields and characteristics Seeds: contain between 33 and 41 % of oil Products and co-products: characteristics and use: Oilseed Can be used as feedstock to produce biodiesel Moringa press cake Press cake can be used as a fertiliser Sources: /57/ /58/

Potentials Analysis

Castor plant (Ricinus communis) Castor in Rwanda

A castor plant B castor fruits

Short description Ricinus or castor is an annual or perennial fast-growing shrub or tree that belongs to the Euphorbiaceae family. It varies greatly in its growth habit and appearance. As a tree, it can grow up to 12 m tall. The leaves are 15-70 cm long, long stalked, alternate and palmate with deep lobes. The final flowers are monoecious. The fruit is a spiny, greenish capsule that contains large, oval, poisonous seeds. It is possible to cultivate castor in temperate regions (as an annual plant) or in tropical regions (here, tropical conditions are considered).

Agronomic conditions Rainfall: 400-2,000 mm/a Temperature: 15-39 °C Altitude: 0-2,000 m above sea level Soils: adapted to a wide range of soil types (grows also on poor soils)

Seed yields and characteristics Seed yield: 0.9-4 t/ha (under normal soil conditions) Oil content: 40-55 % Husks: contain ricin, a toxin that is also present in lower concentrations throughout the plant

Products and co-products: characteristics and use Castor seeds Can be used for the production of oils or biodiesel Castor press cake Can be used as fertiliser; without detoxification it is not possible to use the press cake as fodder Sources: /59/

Potentials Analysis

Sugarcane (Saccharum officinarum)

Short description Sugarcane is a perennial C4-grass that belongs to the Poaceae family. It is 2-6m tall and has fibrous stalks rich in sugar. Sugarcane plants have a life expectancy of up to 20 years. Once planted, sugarcane can be harvested several times. After each harvest, the cane builds up new stalks (ratoons). The first harvest can be collected after 9–24 months, after which it can be harvested again every 12 months. Sugarcane grows in tropical and subtropical regions.

Agronomic conditions Rainfall: 600 - 1,900 mm/a Temperature: 21° C to 26° (optimal) Altitude: up to 1,500 m above sea-level Soils: loam to clay soil Yields and characteristics Yields: 82.4 t/ha (nationwide average in Brazil) Sugar: 15 % of the cane stalks Bagasse: (fibre biomass in the stalks); 14 % of the cane stalks Straw: 14 % of the cane stalks

Products and co-products: characteristics and use Sugar Can be used for the production of ethanol Bagasse Can be used for cogeneration (heat and power generation) Leaves/straw Can be used as fertiliser or for energy Molasses Can be used as fodder, fertiliser or for the production of ethanol (in the case of sugar production) Sources: /60/

Potentials Analysis

Cassava (Manihot esculenta)

A B A cassava root, B cassava, young plant (source: Wikipedia) Short description The plant is also known as yucca or manioc. Cassava is a woody shrub or tree of the Euphorbiaceae family. It is cultivated for its starchy tuberous root, as an annual crop in tropical and sub-tropical regions. As a perennial, it is up to 7m high, has one or just a few stems and branches sparingly. Leaves are lobed. The tuberous root grows in clusters of 4–8 at the stem base. The interior has a high starch content. The bark contains toxic hydrocyanic acid, which must be removed by washing, scraping and heating. There are hydrocyanic glycosides (HCN) in all parts of the plant. Agronomic conditions Rainfall: 500-1,500 mm/a Temperature: 16-30 °C Altitude: 0-1,500 m above sea-level Soils: grows well on poor soils Yields and characteristics Yields: from 10 to 90 t/ha (fresh roots)

Products and co-products: characteristics and use Starch Can be used for the production of ethanol Sources: /61/

Potentials Analysis

III.2 GIS and GAPP-based potential analysis (by German Biomass Research Centre)

This section will define the term biomass potential and will also outline the methodology used. Furthermore, biofuel potentials will be presented and discussed.

III.2.1 Definitions The term biomass or biofuel potential can be categorised as follows /62/:

Theoretical potential refers to a theoretical limit to the available energy supply from biomass, meaning all phytomass and zoomass. Due to technical, economic, ecological, structural and administrative limitations, only a small part of the theoretical potential is available for energy use. Technical potential refers to the portion of the theoretical potential that can be used, given current technical possibilities. The calculation of the technical potential takes into consideration the available technologies for utilisation, as well as their efficiency. It also allows for any structural, ecological (e.g. nature conservation areas) and other non-technical restrictions. Economic potential refers to the portion of the technical potential that can be used economically, under the prevailing economic conditions. This is subject to the development of conventional energy systems and the prices of the energy sources. Accessible potential refers to the expected current use of bioenergy. Usually it is lower than the economic potential, but it can also be higher if, for example, the use of bioenergy is being subsidised as part of a market introduction programme.

Because the economic and accessible potential can change very quickly as a result of changing economic conditions, the following calculation of biomass potentials will refer to the technical potential. Different approaches to analysing the biofuel potential are chosen, depending on the type of biomass and the source.

The potential for cultivating energy crops on arable land is calculated using agro-economic modelling (GAPP analysis).

The biofuel potential of integrated systems on selected sites is determined using suitability mapping and analysis of GIS data. (It would be possible to analysis the potential on marginal land, if data on soil quality and land use was available.)

III.2.2 Potential on agricultural areas (GAPP modelling)

Methodology To determine the amount of agricultural land available for energy purposes, the agro-economic GAPP simulation model (global agro production potential) – a methodology described at length by Thrän and Seidenberger /63/, /64/. This calculation tool can be used to model the demand and supply side of agricultural production, and to deduce whether there are surpluses or deficits of food production on national, regional or even global scales. The most important parameters for the evaluation are, on the demand side, population size and food consumption, and on the supply side, the overall agricultural area and productivity (yields). If a nation produces more than is needed for domestic consumption (and if the surpluses cannot be produced economically, without the support of subsidies), it is assumed that the area of land corresponding to the agricultural surplus produced can be used for energy crop cultivation. In this approach, the biomass or bioenergy potential refers to the agricultural area which is not needed for food production (on a quantitative basis). Thus, the potential is not really comprised of cultivable land, but corresponds to the current or future agriculturally used areas.

Potentials Analysis

Fig. 22 shows the factors driving the development of available areas for energy crop cultivation and the resulting biomass potential. It shows a number of input, calculation and output quantities used for the model. Changes in land use that result from the given policies will determine the amount of agricultural land available. As well as the productivity of crops and livestock, national production quantities can be calculated. The supply can be increased through the expansion of arable land, by raising agricultural productivity to increase yields, or through the use of fallow land (if available). Changes in food consumption patterns result from demographic developments and changes in per capita consumption. Higher consumption will reduce the available potential for bioenergy, while lower consumption will increase it.

Background Agricultural and factors environmental policy Climate change Plant breeding Economic development

Input Population growth and Land use change Yields quantaties consumer behavior

Areas for Calculation nature Fallow land Crop yields Animal yields Food demand quantaties conservation

Development of available agricultural land and production Required agricultural land for food quantaties production (pastures and arable land)

Output Available agricultural land for energy crops quantaties

Fig. 22: Drivers of the energy crop potential In the analysis of potentials, the following input data are used to describe the drivers listed here. They are mainly based on FAO statistics as its database is the most consistent for agricultural data, with information covering at least the last 20 years:

Population size and growth rate /29/

Food demand (per capita consumption) /65/

Land use (agricultural, arable land, meadows and pastures etc.) /65/

Productivity: for arable areas, yield data are available for cereals, oilseed rape, sugar plants, starch- containing root crops, and some field fodder crops /65/.

To assess the future potential, a trend analysis can be used to anticipate developments in the parameters of food demand, yields, and land use change. By analysing scenarios, a broader range of future developments can be modelled, with variations in the parameters (assumptions about parameter development). When developments are predicted by anticipating trends, it is assumed that current conditions will also apply in the future.

When measuring the yield progress for crops on arable land, they are weighted at the outset proportionally to the area of land they occupy. The aggregated yields have been estimated or calculated for the last 20 years and can thus be extrapolated. The development of land uses is also estimated using a regression analysis, while past developments in population growth also provide the basis for future analysis. The estimates used are taken from the UN Population Prospects (medium variant).

Potentials Analysis

The balance between the future supply of, and demand for agricultural land will determine whether there is a surplus or deficit of production, and whether a biomass or biofuel potential exists. A positive area or biomass potential would derive from a surplus of agricultural area or production, which, in turn, could derive from:

increases in productivity – since further increases in yield will occur in future, the productivity of the area in use will increase. A smaller area will therefore be required for food production (at the same level of food consumption)

a decline in consumption, if for example the population declines

the use of fallow land

the expansion of arable land.

If there is surplus area, the biomass potential is estimated by multiplying that area by the yields of selected biomass resources (e.g. energy crops, woody biomass). To estimate biofuel potential, the conversion technologies must be selected and the biomass production potential is then multiplied by the conversion factor.

Scenario and time frame The chosen time frame for the potentials analysis is 2010, 2015 and 2020. It would be interesting to go further into the future, and this would even be possible using GAPP analysis. However, uncertainty about the future development of agricultural conditions is very high, so no attempt is made to assess potentials after 2020.

Three scenarios have been developed. As these have to be comparable, the parameters of population growth, food demand and land use change remain constant for all scenarios – only the parameter productivity is varied.

Business as usual (BAU): This scenario assumes that the trends in land use and land use change (see the chapter on land use), as well as productivity, demand for food etc., will be a continuation of developments experienced during the last 20 years. It also assumes that the general legal and economic conditions that exist at present will continue to apply in the future.

Moderate: In this scenario it is assumed that a moderate and continuous rise in productivity of one per cent p.a. can be achieved. This corresponds to the annual average increase in global agricultural productivity.

Vision 2020: In this scenario, the rise in productivity is assumed to be 5 % p.a., in line with the targets of the Rwandan Government's Vision 2020 /66/.

Results The future development of the main parameter is shown in Table 7. Food consumption will increase markedly due to strong population growth and an increase in per capita consumption. Due to the greater demand, additional agricultural areas will be needed for the cultivation of food crops (theoretically, it would also be possible to increase imports or compensate for the higher demand by raising agricultural productivity). The development of land use change in terms of the conversion rate of non-arable to arable land is between 0.54 and 0.76 % annually. This means that the areas available for crop cultivation are slowly increasing. As mentioned above, the weighted crop yields (productivity) show that there has been no increase in productivity in recent years in Rwanda. The additional demand for food therefore has to be realised (theoretically) by expanding the agricultural area. However, the moderate expansion described here is significantly lower than required, so a deficit in production will occur (Table 8).

Potentials Analysis

Table 7: Development of the main input parameters of the GAPP model, based on FAO data 2005 Parameter 2010 2015 2020 (2002-2005) Population 8,992,000 10,277,000 11,743,000 13,233,000 Per capita consumption (kg grain unit5) 181 189 195 201 Parameter change (%) Population growth 22.5 14.3 12.7 Per capita consumption 4.3 3 3 Food demand 26.8 17.3 15.7 Land use (conversion of non-arable into 3.8 2.7 2.7 arable land) Parameter (ha) Agricultural area (sum of arable and 1,916,250 1,988,649 2,040,362 2,092,075 pasture land) in ha Fallow land 0 0 0 0 Additional arable areas through land use 72,399 51,713 51,713 change Areas needed for additional food 574,000 385,000 359,000 demand Surplus areas through productivity increase BAU 0 0 0 Moderate 95,000 116,500 129,000 Vision 2020 389,000 429,000 420,000

5 Grain unit/ equivalents: To enable the aggregation of different elements of food consumption, and to relate them to the required area, the calorie content, for example, of wheat and other products can be converted into grain equivalents. The grain equivalent is based on the calorie content of grain (3.5 cal/g). The conversion of meat products into grain units does not refer to their calorific value, but to the energy content of the fodder that is needed (for comparison: 180 kg of grain units = 198 kg maize).

Potentials Analysis

Table 8: Development of potential agricultural area in the different scenarios (negative values mean that additional land is required, positive values mean that surplus land becomes available) Scenario Area balance 2010 2015 2020 BAU for one year -500,318 -332,169 -306,241 accumulated -500,318 -832,487 -1,138 728 Moderate for one year -405,621 -215,693 -177,032 accumulated -405,621 -621,314 -798,347 Vision 2020 for one year -104,184 +95,601 +112,752 accumulated -104,184 -8,584 +104,167

The results of agro-economic modelling are presented in Fig. 23. In the BAU scenario, which assumes the extrapolation of current developments – no increase of productivity; moderate land use change (2.7 % over five years); the population and the demand for food both increase – no surplus agricultural area can be identified for the cultivation of energy plants. On the contrary, there is additional demand for land to grow food crops, amounting to approx. 833,000 ha in 2015 and over a million ha in 2020. It should be noted that these numbers are accumulated figures (sum of the required area), not the area demand or surplus for one year. The demand corresponds to between 43 and 56 % of the total agricultural area available in 2005.

Assuming it is possible to achieve at least moderate increases of productivity (one per cent annually), there is slightly less demand for additional land for the cultivation of staple crops. However, it still remains high (see Fig. 23: Moderate). If Rwanda can achieve an increase in yields of about five per cent a year, 10,0000 ha of non-food area – or 5.5 % of the agricultural area in 2005 – could become available in 2020.

2010 2015 2020 400000

200000

400000 BAU Moderate 600000 Vision 2020

800000

1000000

1200000 Demand on agricultural area Area surplus (ha) 1400000

Fig. 23: Potential for agricultural area in Rwanda

Potentials Analysis

Discussion The results are not surprising as land is known to be scarce in Rwanda, and the options for extending the agricultural area are limited. In the country people are aware of the future agricultural challenges resulting from population growth, increasing food demand, low productivity and limited land resources. There are currently a number of different agricultural strategies and projects being pursued to increase agricultural productivity. Chapter III.1 analysed Rwanda's potential for intensifying different crops.

Beyond that, the results of GAPP analysis clearly demonstrate that no agricultural area is available for the cultivation of energy crops under the 'business as usual' or 'moderate' scenarios. The theoretical surplus of agricultural land in 2020 in the Vision 2020 scenario is dependent on an annual five per cent increase in the weighted productivity. Considering the fact that no increase in (weighted) productivity could be achieved in the last 20 years, this outcome seems implausible. Furthermore, developments after 2020 must also be considered. There is a limit to how long annual five per cent increases in yield can be sustained. Population growth and the demand for food have to be monitored before any surplus agricultural area can be used for the cultivation of perennial energy crops, for example. The theoretical area surplus of 100,000 ha should be seen as a buffer for the cultivation of food crops.

Recently, the Rwandan Government published data suggesting agricultural growth is running at 11 % /47/, and the Ministry of Agriculture and Animal Resources has also mentioned a sector growth rate of six per cent per year /67/. It must be noted that different definitions of agricultural growth and productivity exist. The total agricultural growth refers to the total production quantity that can be realised through an increase of yields and/or the extension of cultivable land. These numbers are not comparable with the weighted yield increase (yield productivity) that is being analysed here, which refers to the performance of crops in terms of yields/ha (t/ha).

However, recent data about agricultural performance (2007-2009) is not considered in the GAPP model. If agricultural growth in terms of productivity per ha was extraordinary during this period, the calculated potential might prove to have been underestimated, meaning that the deficit of land area for food production could be slightly reduced.

The quality of the results mainly depends on the quality of input data. FAO uses consistent definitions and methodology for agricultural statistics and is therefore a very important source of information, but inconsistencies between FAO statistics and national statistics can occur. For example, the input data for land use may deviate from the national database.

Agro-economic modelling is a quantitative estimation. The premise that priority is given to food security before an area is (theoretically) used for the cultivation of energy crops is considered in a quantitative way: food demand and supply are balanced on a national scale, but the question of whether everyone in the country has access to food is not considered in this model – and probably cannot be considered in any models at all.

III.2.3 Potential for energy crops in integrated systems Besides the option of cultivating energy plants in plantations on agricultural areas, the agricultural system analysis also identified alternative farming systems suited to the production of jatropha as an energy crop (see Chapter III.1). Integrated systems would use the plant for fences, hedges and anti-erosion structures on agricultural land, around water bodies and alongside roads; it would also be planted in a belt surrounding the Akagera National Park. The following section describes the methodology used to assess the potential offered by the chosen integrated systems; it will then present and discuss the resulting estimates for jatropha potential in those systems.

Potentials Analysis

Methodology A geographical information system (GIS) modelling approach was used, as it provided a flexible tool for capturing, selecting and combining topographical and infrastructural data with the agronomic conditions affecting energy crops. To calculate the potential offered by integrated systems, a three-step approach was used. Firstly, a map was produced showing suitable areas for jatropha growing in Rwanda, based on the growing conditions required by jatropha curcas, including water, temperature and altitude. The suitability maps were prepared by GTZ/ICRAF. The modelling approach drew on the principles and framework of land suitability mapping, as developed by FAO, in which each crop’s biophysical requirements were matched with attributes of topography and crop production management /54/. The sites suitable for jatropha were superimposed over GIS data about land use (see Chapter II.1.2). To assess the potential of integrated systems, the areas where jatropha can grow and the areas already being used for agriculture are compared. Suitable sites for jatropha cultivation outside the agricultural areas (forests, national parks or potential arable land) were not considered in this approach.

Fig. 24: Suitability map of jatropha curcas in Rwanda In addition, data on infrastructure (roadways) and water bodies (rivers excluded) was superimposed on the potential areas where jatropha can grow. To assess the potential for the 'jatropha belt' around the Akagera Park, a buffer zone around the park was created, and suitable sites for jatropha cultivation superimposed upon it.

In a second step, integrated jatropha farming systems were allocated to the selected regions. The outcome of this analysis was measured in terms of the area (ha) or length of roadside (km) where integrated jatropha systems are possible. Thirdly, the sum of the areas was multiplied by the potential jatropha yields. As it would not be possible to grow jatropha on all the potential areas, a specific recoverability factor was chosen. It is assumed conservatively that it would be possible to use 30 % of the total potential. The total area (in km or ha) and assumptions made about the farming systems and yields are shown in Table 9.

Potentials Analysis

Table 9: Selected areas and recoverability factors for integrated jatropha cultivation Recoverability Selected area Suitable area Plant densities Yields factor (%) Jatropha as 0.2 km/ ha 4,000 plants/km/row 0.8- t/km 30 fences and anti- 1 spacing 25 * 25cm, erosion structures on 1 row agricultural land 155,986 km (total suitable area

in ha) Jatropha 430 km 2 rows, 2 sides 0.8- t/km 30 around water 1 bodies Jatropha trees 2,459 km 400 trees/km/row 1.5 t/km 30 on roadsides Akagera belt 1,670 ha 1,600 plants/ha, 2 t/ha 60 spacing 2.5 * 2.5 m, width: 0.1 km

Results The potential of jatropha cultivated in integrated systems is illustrated in Fig. 25. The total biomass potential in terms of production output is approx. 87,600 t of seed annually. From this it is possible to produce 25,000 t of jatropha vegetable oil (JVO). The greater part (approx. 75 %) of this potential is found in Eastern Province and Southern Province, where conditions are most suitable for jatropha.

25000

20000

fences 15000 anti-erosion roadside and lakes

JVO (t/a) Akagera belt 10000 all

5000

0 East Kigali North South West Total city

Fig. 25: Jatropha potential in integrated systems

Potentials Analysis

The distribution of the potential according to the different types of integrated systems is shown in Fig. 26. The potential from roadsides and lakes (approx. 350 t p.a.) is relatively low. JVO potential from Akagera Park is estimated to be 600 t p.a. The remaining amount derives from fences and anti-erosion structures in agricultural areas.

Potential on selected areas (distribution)

36 t/a 606 t/a 2% fences 309 t/a 1% anti-erosion roadside Akagera belt water bodies

11 793 t/a 48% 49% 11 793 t/a

Fig. 26: Distribution of the potential from selected areas

Discussion The results demonstrate that the potential to grow jatropha on roadsides and around water bodies is very small. However, significant quantities could be grown in the form of hedges, fences or anti-erosion structures on agricultural land.

Regarding the introduction of jatropha in integrated systems, it is known that jatropha is traditionally used in a number of countries for protective hedges around arable land and dwellings. Its use as living fences can be seen, for instance, in Madagascar /68/ and Mali. Whether it is possible to adopt these farming systems in Rwanda depends, among other things, on the farmers' acceptance of growing of jatropha. The lack of knowledge of successful methods of establishing and preserving jatropha could be a barrier to its successful cultivation. Another potential challenge relates to the delivery of the biomass, for which a logistics infrastructure is needed. In contrast to plantation systems, integrated farming systems are widely dispersed. Accessing the potential would also depend on the local market conditions.

Jatropha cultivated in integrated farming systems could have beneficial effects if it is possible to produce vegetable oil for energy while also protecting soils against erosion. Jatropha is often promoted as a good plant to prevent soil erosion. However, it is unclear whether this also applies on steep slopes. A possible synergy arising from the jatropha belt around Akagera Park would be to protect the park against invasion by pastoral livestock, while also contributing to energy security.

However, the introduction of integrated jatropha systems can also have negative effects. Although the systems are integrated in conventional cultivation systems, they still take up a certain amount of the agricultural space. Therefore such farming systems could also cause competing uses. If planted on terraces, jatropha might compete with fodder plants, such as elephant grass, which grows on contour strips. 59

Potentials Analysis

III.2.4 Potential of marginal land According to the definition (see Chapter II.1.2), marginal lands are lands with very low productivity. Due to land scarcity, even marginal land is used for various purposes in Rwanda (pasture, food crops, wood fuel). The area of marginal land on which it is possible to cultivate energy plants for biofuel production should equate to the area which is not necessary for food production or the provision of wood fuel.

Methodology To estimate the area of surplus marginal land, data on soil quality and land use need to be combined. However, at present there is no data about the quantity of marginal land in Rwanda. Because of this, it was not possible to make a quantitative estimation of biofuel potential from such land. Nevertheless, to get some idea of the possible outcomes of energy crop plantations on marginal land, and of the amount of biofuel that could come from these biomass resources, calculations were made based on assumptions of the area of marginal land available. In this section we assume that three per cent of the agricultural land is classified as marginal land.

One of the main questions behind the estimate is how high yield of energy plants is on marginal land. Plants such as jatropha, castor or moringa are adapted to poor soil conditions and are able to tolerate droughts. However, just because they grow on marginal land does not mean their seed yields are high. There is a general lack of reliable data about production levels under sub-optimal growing conditions. A selection of published yields is shown in Table 10.

Table 10: Potential yields on marginal land according to different literature sources Yields Seed yield (t/ha) Conditions Source Jatropha 0.75 Low soil fertility, optimal FACT, Jatropha handbook water conditions /56/ Jatropha 0.5 Low soil fertility, normal FACT, Jatropha handbook water conditions Jatropha 0.25 Low soil fertility, FACT, Jatropha handbook suboptimal water conditions Jatropha 0.6-1.45 Marginal land Experiences in India (Ghosh et al. in /69/

As no one has cultivated jatropha in Rwanda before and there is consequently a lack of experimentation and data, this study assumes a medium yield for jatropha seeds on marginal land. This is based on the most reliable source of data available about jatropha /56/. The yield of 0.4 t/ha is also used for calculating the net operating incomes of farming systems on marginal lands (medium variant for jatropha, see III.1.5) by the agricultural expert for Rwanda.

Results Assuming that three per cent of the agricultural area is classified as marginal and that this land is free of competing uses, approximately 57,000 ha could be used to cultivate energy crops. Assuming an average yield of 0.4 t/ha for jatropha, 6,333 t of vegetable oil could be produced annually from the biomass produced. The biofuel potential calculated for the respective feedstocks grown on marginal land are shown in Table 11.

Potentials Analysis

Table 11: Biofuel potential on marginal land Feedstock Seed yield (t/ha) Conversion Oil (t/ha) Oil (total)

Jatropha 0.4 3.6 tseeds/ tbiofuel 0.11 t/ha p.a. 6,333 t p.a.

Moringa 0.4 3.8 tseeds/ tbiofuel 0.1 t/ha p.a. 6,000 t p.a.

Castor 0.2 3.2 tseeds/ tbiofuel 0.06 t/ha p.a. 3,563 t p.a.

Discussion The results indicate that the possible yield (c. 6,000 t of jatropha vegetable oil annually) is very low. So the options for producing feedstock for biofuel production on marginal land are very limited. However, this estimation involves a lot of guesswork, and it should be stressed that there is a lack of knowledge about the potential yields of energy crops under sub-optimal growing conditions. According to Jongschaap et al /69/, recent predictions of productivity seem to ignore the results of plantations established in the 1990s, most of which have been abandoned now because their productivity was lower than expected and/or their labour costs higher.

Therefore field trials have to be conducted under different growing conditions in order to make reliable predictions about the productivity. Even if field trials should indicate high potential seed yields, it is still an important question whether the marginal areas are not rather needed for other purposes. The discussion of the potential of jatropha cultivation on marginal land is really about yields and – especially in the case of Rwanda – about the availability of areas without competing uses. Considering the greater demand for food in the future, it is possible that the pressure to exploit even marginal land will increase. Thus, it is doubtful if the potential of energy crops on marginal land can be exploited.

However, other positive effects might possibly be associated with the cultivation of jatropha on marginal land. If the land is temporarily unused, growing jatropha could help to make it productive once more. jatropha seems to have the capacity to reclaim marginal soils by exploring the soils with its root system, recycling nutrients from deeper soil layers and providing shade for the soil.

Decisions about using marginal land for energy crop plantations should be based on data about crop yields and environmental impacts (for example the impact on soils) gained through experimentation. It should also consider investigations into the current and future land use, in order to avoid competing uses.

Potentials Analysis

III.3 Food security analysis (by Julia Sievers, GIZ and Valens Mulindabigwi, University of Cologne)

III.3.1 Definitions and concepts Food security has been achieved when it can be ensured that 'all people, at all times, have physical, social and economic access to sufficient, safe and nutritious food which meets their dietary needs and food preferences for an active and healthy life' (World Food Summit, FAO 1996).

Concepts of food security have evolved considerably in the last thirty years. The term originated in the mid 1970s when the World Food Conference defined food security in terms of food supply. During the 1980s it was recognised that not only food supply but also food access at national, household and individual level is a precondition for food security. Since the World Food Summit in 1996, the multidimensional nature of food security has become better understood and increasingly accepted. Today, the following dimensions are widely accepted as the integral elements of food security (Fig. 27):

Food availability: The availability of sufficient quantities of food of appropriate quality, supplied through domestic production or imports (including food aid) /70/.

Food availability is not enough, on its own, to ensure food security. Poor people often have no access to food because their access to the necessary resources to buy food is limited. People often go hungry, even if enough food is available nationally.

Food access: Access by individuals to adequate resources (entitlements) for acquiring appropriate foods for a nutritious diet. Entitlements are defined as the set of all commodity bundles over which a person can establish command given the legal, political, economic and social arrangements of the community in which they live (including traditional rights such as access to common resources) /70/.

Food utilisation: Utilisation of food, through an adequate diet, clean water, sanitation and health care to reach a state of nutritional well-being where all physiological needs are met. This highlights the importance of non-food inputs in food security /70/. One important aspect of the ability to utilise food adequately is access to energy for cooking, food processing and storage.

Stability: To be food secure, a population, household or individual must have access to adequate food at all times. They should not risk losing access to food as a consequence of sudden shocks (e.g. an economic or climatic crisis) or cyclical events (e.g. seasonal food insecurity). The concept of stability can therefore refer to both the availability and access dimensions of food security /70/.

Potentials Analysis

Transparency & Accountability

Access to Access to water inputs Access to Access to Land Markets & income Food access Education

Diet diversity Extension Good of cultivated Food availabilityFood security Food utilisation Human rights governance area Energy for cooking

Crop diversification Food stability Sanitation & Health care

Agricultural processing Sustainable Food stocks production techniques

Participation & Non-Discrimination, Empowerment

Fig. 27: Food security dimensions and related aspects. Authors' illustration

Food (security) is a human right The human rights dimension of food security is being increasingly acknowledged, although food has already been legally recognised as a human right for a long time. The right to adequate food is enshrined in the UN Declaration on Human Rights (1948), in the International Covenant on Economic, Social and Cultural Rights, ICESCR (1966), and in other documents. Efforts to support the realisation of the right to adequate food are binding obligations under international law for all states that have ratified the ICESCR. According to Art. 2 of the ICESCR, states have a duty to 'take steps, individually and through international assistance and cooperation, especially economic and technical, to the maximum of its available resources, with a view to achieving progressively the full realisation of the rights recognised in the present Covenant by all appropriate means, including particularly the adoption of legislative measures.' According to the Committee on Economic, Social and Cultural Rights (which is charged with monitoring the ICESCR), the requirement to 'take steps' imposes a continuing obligation to work towards the realisation of the right to food 'as expeditiously as possible'. It also rules out deliberate regressive measures which impede that goal. If resources are highly constrained, targeted programmes aimed at the vulnerable should be set up and international assistance requested. The Committee on Economic, Social and Cultural Rights defines three types or levels of obligations of the States Parties: 1. 'The obligation to respect existing access to adequate food requires States Parties not to take any measures that result in preventing such access.' 2. 'The obligation to protect requires measures by the state to ensure that enterprises or individuals do not deprive individuals of their access to adequate food.' 3. 'The obligation to fulfil (facilitate)

Potentials Analysis means the state must pro-actively engage in activities intended to strengthen people’s access to and utilisation of resources and means to ensure their livelihood, including food security.' Finally, whenever an individual or group is unable, for reasons beyond their control, to enjoy the right to adequate food by the means at their disposal, states are obliged to fulfil (provide) that right directly /71/.

The Voluntary Guidelines on the Right to Adequate Food, adopted in 2004 by the FAO Council, provide further guidance on measures states should take in order to ensure the right to adequate food /72/.

III.3.2 Methodology

The current debate at the policy and expert level about the relative importance of biofuels and food security reveals a widespread consensus that food has to come first.

If the 'food first' principle is to be taken seriously, any analysis of biofuel potentials must be based on a comprehensive food security analysis. It is, of course, beyond the scope of a biofuel potentials analysis to analyse all aspects of food security in depth. Therefore the following analysis will concentrate on the dimensions and aspects of food security which are more closely linked to the question of whether or not there is potential to produce liquid biofuels on a national scale. The analysis provides a basis for answers to the main concerns and arguments which are often raised in the discussion of food versus fuel:

Competition for land use (food crops v. energy crops)

Risk of eviction and displacement of farmers due to increased demand for land

Competition in the use of food crops if these are also used for biofuel production

Risk of food price rises due to the decreased supply of food crops and/or increased demand for food crops

Potential for farmers to earn a higher income due to the demand for biofuels

Potential increase in the energy supply and rural electrification

The analysis is structured according to the four basic dimensions of food security: availability, access, utilisation and stability. First a broad overview is given of the current situation for each of the relevant aspects. This provides a basis on which to gauge the implications for the biofuel potentials analysis.

The following key questions will guide the food security analysis. Availability

What is the current situation of food availability (including both national production and imports)?

What is the situation of land availability and land use, related to the sustainable production of food crops for current and future national food needs (taking into account population growth)?

What are the production and productivity trends for the main food crops?

How much land is needed for other uses which are also important for food security (pasture, wood plantations)?

What is the role of food imports for national food availability?

Potentials Analysis

Access

What is the current situation regarding access to food?

What role does access to land play in food security?

How secure is land access (land ownership and land use rights) for the population?

What are main sources and opportunities for income and employment among the population?

Utilisation

What is the current energy access situation for the (rural) population, especially related to cooking, food preparation, food processing and food storage?

What role does wood play in cooking?

What are the challenges?

The analysis of utilisation will focus on aspects closely linked to bioenergy – especially on the role of access to energy for food preparation, cooking and storage. It will not look at other aspects such as sanitation, water or health care.

Stability

How stable and sustainable is the food security situation (especially concerning availability and access)?

What are the risks and challenges?

Implications for the analysis of biofuel potential Implications drawn from the food security analysis for the analysis of liquid biofuel potential are guided by the following assumptions: A potential for liquid biofuel production can be deemed to exists if the positive impacts and opportunities outbalance the assumed risks, negative impacts and barriers to improved food security. This is on the condition that only low negative impacts/risks/barriers are assumed. Accordingly, no biofuel potential can be identified if there are only risks and negative impacts with no positive impacts, or if the negative impacts outweigh the positive impacts. This would be a minimum requirement from a food security perspective. If the 'food first' principle is to be taken seriously, no sustainable potential for biofuel should be seen to exist unless biofuel production will clearly not have any negative impacts on food security, and if it does not constitute a barrier to important measures to improve food security.

Therefore the two overarching questions are: 1. Does the current food security situation allow biofuel production (and to what extent), considering the potential positive and negative impacts on food security? 2. Would biofuel production constitute a barrier to measures and developments which are important to improve the food security situation? These questions make it clear that – from a food security perspective – a biofuel potentials analysis cannot easily be distinguished from a food security impact analysis. (For such an analysis, see Chapter 5.2)

Conclusions for the biofuel potentials analysis from a food security perspective will be drawn with the aid of a few key questions. These questions, which take up common arguments from the food versus fuel discussion, can be attributed to the different dimensions of food security (Table 12).

Potentials Analysis

Table 12: Key questions for a biofuel analysis, from a food security perspective

Key questions for the biofuel potentials analysis, from a food security Related Food Security perspective Dimension

Is land available for the production of energy plants for liquid biofuels, Availability which is not and will not be needed in order to maintain and improve the national food security situation?

Are farmers' land use and land ownership rights secure enough to prevent Access their eviction or displacement as a result of the increasing demand for and competition over land that arise from large scale investments (in energy plant production)?

Could energy plant production provide farmers with increasing or Access additional income?

Is it a viable option to use part of the land that is currently used for food or Availability cash crops (e.g. coffee or tea) to grow energy plants, while also increasing Access imports of food, and/or decreasing exports of cash crops?

Is it a viable option to use surplus food production for the production of Availability liquid biofuels? Access

Utilisation Is it a viable option to use liquid biofuels for rural electrification?

Could it be an option to import biomass from other countries for the Access production of liquid biofuels in Rwanda? What obligations regarding the human right to adequate food must be Human rights taken into consideration at the policy level for decisions related to liquid dimension biofuel production?

III.3.3 Food security analysis: Food availability

Production Food availability is a big challenge for Rwanda, with the availability from national production being subject to seasonal fluctuations. Between 2000 and 2008, food production was below the recommended minimum level of 2,100 kcal/capita per day in all years except 2008 (UNHCR, Handbook for Emergencies; MINAGRI).

Potentials Analysis

Calorie availability in Rwanda

2300

2100

1900 Kcal/capita/day 1700

1500 2000 2002 2004 2005 2006 2007 2008 Year Available kcal required kcal (UNHCR)

Fig. 28: Calorie availability per capita, per day in Rwanda, 2000-2008 /73/

Kcal availability varies significantly between regions. Low food production seems especially problematic in Nyarugenge, Kicukiro, Gasabo, Cyangugu and Gikongoro. As well as the shortage of calories, national production is also highly deficient in proteins and fats. While adults need about 59 g of protein per day and 40 g of lipids, Rwanda's production falls considerably short of meeting these requirements. Protein production ranged between 40 and 50 g per day per person from 2002 to 2007 (only rising above 50 % in 2008). The production of lipids was around 10 g per day per person (rising to almost 20 g in 2008), covering just 39.5 % and 13.9 % of people's needs for protein and lipids respectively (Fig. 29).

Potentials Analysis

Cover rates of proteins and lipids needs (%)

15 Cover rates of needs (in %) 10

0 2000 2002 2004 2005 2006 2007 2008 Year

Cover rate of protein needs Cover rate of lipid needs

Fig. 29: Protein and lipid supply per capita /73/ Food production is generally higher in season B (planting from February to March, harvesting from May to July) than in season A (planting from September to October, harvesting from November to January) /73/.

A major problem for the availability of food is the lack of food storage and food processing facilities. This leads to a situation where farmers often have to sell their products during harvesting times at low prices, although a few months later they have too little food and then have to buy more at higher prices, which is difficult because of their low purchasing power.

A 2006 study showed that the produce harvested in season A lasts less than two months for 61 % of households. Produce harvested in season B lasts a little longer: 52 % of households reported that it lasted for two months or less, while 43 % said theirs lasted for between three and six months. For season C, 83 % of households said their harvests lasted for two months or less. In terms of geographical distribution, the harvested produce lasted for the shortest time in Bugesera, Southern Plateau, and Eastern Curve. This shows that the 'hunger seasons' in Rwanda are mainly in March and April and, to a lesser extent, September and October /31/ (Fig. 30).

Potentials Analysis

Fig. 30: Production: Seasonal availability (HH: household) /74/ Total food production increased considerably between 1998 and 2009. This was mainly due to the expansion of the cultivated area (from 613,437 ha in 1998 A, to 853,697 ha in 2009 A), as well as the increased productivity of some soils and the per capita production of some crops (Fig 31 and Fig 32). Nevertheless, agricultural production is still insufficient to meet the country's per capita food needs (Fig. 32 and Fig. 43). When evaluating the food security situation, to assess the informative value of this data more effectively, it is important to consider the big differences that exist between the different regions and between different crops.

Production per capita (kg/capita)

Vegetables Cassava Yam & Taro Sweet Potato Irish Potato Banana Soya 2009 A Groundnuts 1998 A Peas Beans Rice Wheat Maize Sorghum

0 20 40 60 80 100 120 140 160 180 kg/capita

Fig 31: Agricultural production per capita of the main food crops in 1998 A and 2009 A. Authors' illustration based on statistics from MINAGRI

Potentials Analysis

Soil productivity (t/ha)

Vegetables Cassava Yam & Taro Sweet Potato Irish Potato Banana Soya 2009 A Groundnuts 1998 A Peas Beans Rice Wheat Maize Sorghum

0 3 5 8 10 13 15 t/ha

Fig 32: Soil productivity of the main food crops in 1998 A and 2009 A. Authors' illustration based on statistics from MINAGRI In Rwanda, five food crops traditionally constitute more than 70 % of the consumption basket in rural areas: sweet potatoes, beans, banana, cassava and sorghum (the production of sorghum is higher in season B than in season A) (Fig. 33). These five crops provide 79 % of the calories consumed in rural areas /75/. According to Ansoms /31/, beans and peas are the most widely consumed food items. In recent years, increasing amounts of maize have been consumed (both imported and from the country's own production).

Potentials Analysis

Sorghum 1.3% Banana & Maize plantain 14.7% 12.8% Wheat 2.6%

Rice 1.9%

Bean Cassava 13.8% 29.6% Pea 1.0% Groundnut 0.4% Soybean Yam & Taro 2.9% 1.9% Sweet Irish potatoe potatoe 6.5% 10.6%

Fig. 33: Share of calorie supply of main food crops in Rwanda, agricultural statistics from MINAGRI 2009 A. Authors' illustration Against this background there have been striking developments in productivity, per capita production, and the area of land used to cultivate different crops. These factors have increased strongly for crops which do not count as major food crops in Rwanda, such as rice and wheat (e.g. the per capita production of rice grew by 334 % between 2000 and 2007). At the same time, production levels and cultivated area for some of the major food crops either decreased or increased only slightly. For sweet potatoes, production dropped by 34.7 %, which was mainly due to the increased rice cultivation in marshlands. Production of cassava fell by 17.9 % (FAO), although this has risen again since 2007. Production rose for sorghum (1.6 %), beans (29.6%) and bananas (2%) /73/.

The role of food imports and exports in food availability Rwanda is a net importer of food, and food imports are increasing. In terms of agricultural products, Rwanda is only a net exporter of tea, coffee and (to a lesser extent) bananas. The main import products are palm oil, maize, wheat, sugar and rice. Besides these, Rwanda is also a net importer of some of its main food crops (sorghum, cassava, beans). Fig. 35 below show that food imports play a crucial role in the national availability of food. Consumption of beans, sorghum, rice, wheat, maize and groundnuts increasingly depend on food imports. In 2008, for example, they accounted for about 32 % of the maize consumed, 23 % of rice, 20 % of wheat, and 16 % of the ground-nuts.

Potentials Analysis

Net export of some commodities in 2000 and 2007 (tons)

wheat Tea Sugar Raw Centrifugal Soybean oil Sorghum Rice Milled Peas, green Palm oil 2000 Malt 2007 Maize Groundnuts Shelled Flour of Wheat Coffee Cassava Beer of barley Beans, dry Bananas

-45 000 -25 000 -5 000 15 000 35 000 tons

Fig. 34: Net export of some commodities. Authors' illustration according to FAOSTAT

Share of import on total consumption

Soybean oil

Sugar (raw equivalent)

Palm oil

wheat

Sorghum 2007

Rice Milled 2000

Maize

Groundnuts Shelled

Cassava

Beans, dry

0% 20% 40% 60% 80% 100%

Fig. 35: Share of imports in total consumption (FAOSTAT) Although imports form a big share of the total consumption of these products, it is striking that a considerable part of the imported goods are products mainly consumed by the urban population (wheat, sugar, rice) rather than the foodstuffs consumed by food-insecure, rural population groups. Furthermore, the access to imported

Potentials Analysis food for food-insecure rural households is often limited by their low purchasing power (see Chapter III.3.4). According to FAOSTAT statistics, imports of the main food types consumed in rural areas do not form a large share of total consumption. However, it is worth noting that informal cross-border trade in food crops seems to play an important role over and above the officially registered trade flows.

Food imports can be expected to rise in the future, in part because of the trade liberalisation brought about by the East African Community and the Economic Partnership Agreements. This is because producers in other countries, such as Kenya and Uganda, have competitive advantages over the Rwandan producers. Today, local producers already face severe problems because of cheap imports (e.g. sugar). This suggests that, although trade might raise overall food availability in the country, it can also provide disincentives for local food production (and could have negative impacts on the livelihoods and food security of local farmers). Moreover, faced by increasing trade deficits at times of high and volatile food prices, strong and increasing reliance on food imports can significantly threaten the stability of national food availability.

The role of land in food availability Land scarcity combined with strong population growth poses a serious challenge to future food security. Already today the population density is very high. Of course, food availability does not only depend on land availability, but also on the development of agricultural productivity. Although there is some potential to achieve strong increases in food crop production, earlier developments show that productivity is not (or only slightly) increasing for most of the main food crops, and that yields are not stable over time. Actually crop yields were generally higher in 1957 than the average yields between 2004–2008 /76/.

If food crop productivity continues to develop in the same way as it has for the past 50 or 60 years, the currently cultivated land area will not be sufficient to meet the food requirements of the growing population. In a business-as-usual scenario, there will be a deficit of more than a million ha of cultivated land for food production. If a moderate increase in agricultural productivity is achieved (one per cent annually), there will still be a deficit of about 800,000 ha. Only if productivity increases by five per cent annually will there be a small surplus in agricultural area (about 100,000 ha). However, a five per cent annual increase in productivity does not automatically mean that more food will be available for local consumption in areas where food insecurity is prevalent. Agricultural production varies considerably in different Rwandan districts. Furthermore, the impact that higher productivity would have on food availability depends on production patterns and policy choices affecting crop production. It is important to consider the extent to which food crops or cash crops are intensified. Current government policies show a trend towards greater promotion and intensification of cash crops. The intensification of some major food crops, on the other hand, is not promoted (e.g. sweet potatoes), or only promoted in some districts (e.g. bananas) /77/, /25/, /79/.

The National Land Policy views the traditional use of marshlands – the most productive lands – for the production of beans, sorghum and sweet potatoes for domestic consumption as problematic because it assumes these 'archaic' agricultural practices are not sufficient to meet the food demand of the growing population /78/. It therefore promotes land consolidation together with increasingly market-oriented production and the use of marshlands for cash crop cultivation. Marshlands are increasingly being used for growing rice. As a result of these policy decisions, the production of major food crops (beans, sweet potatoes and sorghum) will increasingly have to shift away from marshlands to other types of land.

Potentials Analysis

Cultivated area of main food crops per capita (ha/capita) 1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0.0

> 3.01 ha > 3.01 ha

2.01 - 2.00 ha 2.01 - 2.00 ha

1.01 - 2.00 ha 1.01 - 2.00 ha

0.76 - 1.00 ha 0.76 - 1.00 ha

0.51 - 0.75 ha 0.51 - 0.75 ha

0.26 - 0.50 ha 0.26 - 0.50 ha

< 0.25 ha < 0.25 ha

0 5 10 15 20 25 30 35 Land distribution within farm size classes (%)

Fig. 36: Land scarcity in Rwanda. Authors' illustration, according to MINAGRI statistics and M. Koster /26//80/

As there is a scarcity of productive land in Rwanda (Fig. 36), food production also takes place on marginal land (e.g. beans, ground nuts, sweet potatoes). Although data on the use of marginal land is missing it can be assumed that even marginal land plays an important role in food availability. Apart from its role in the production of some food crops, it is mainly used for pasture, which is very significant for protein availability, an important part of human nutrition. It should be stressed that it is possible to improve the quality of marginal land through various measures. Thus, the fact that there seems to be a lot of marginal land in Rwanda does not preclude measures being taken to improve the quality of that land in order that it can be used in future for food production.

III.3.4 Food security analysis – Food access Food access is a major problem in Rwanda. According to a WFP study in 2006, 38 % of households have 'very weak access'6 to food, 34% of the households have 'weak access'7, 23 % have 'medium access'8, and only five per cent have 'good access'9 to food /31/ (Fig. 37). The new WFP study from 2009 does not provide comparable information on food access, only giving information on food consumption scores (see Chapter 3.3). According

6 Definition of 'very weak access': Households which perform poorly in at least two of the following quantities: (1) total per capita expenditure; (2) per capita food expenditure as a percentage of total expenditure; and (3) months of harvest availability. On average, monthly per capita food expenditure (RWF 1,600) is 78 % of overall expenditure (RWF 2,000). Harvests last for an average of three months per year. (WFP, 2006) 7 Definition of 'weak access': On average, total monthly per capita expenditure remains low (RWF 3,100), with food accounting for 56 % (RWF 1,700) of it. Harvests throughout the year last longer (six months). 8 Definition of 'medium access': Total monthly per capita expenditure is above RWF 5,000, with a smaller proportion being spent on food (33 %) and with about seven months of harvest availability throughout the year. 9 Definition of 'good access': Households with high per capita expenditure (RWF 18,000, availability of cash) and long availability of harvest (up to ten months). In case harvests do not last, households possess adequate financial resources. Per capita food expenditure represents 19 % of the total per capita expenditure. 74

Potentials Analysis to UNDP, 78 % of Rwandan households exhibit some vulnerability in terms of their access to or consumption of food /24/.

Fig. 37: Geographic distribution of access profiles /31/

Two important factors in the access to food will be analysed in this section: the ability to produce food for one's own consumption and the ability to use one's income to buy food. Special consideration will be given to the land access situation because, on the one hand, this is strongly linked to both factors and, on the other hand, it plays a significant role in the biofuel potentials analysis.

Income poverty and inequality Income poverty is mainly a rural problem in Rwanda. In 2006, 56.9 % (/81/,/24/) of the rural population lived below the national poverty line of 250 RWF (USD 0.44 at 2006 prices); in the city of Kigali only 10.4 % of people lived below that line, and in other towns the figure was 17.8 % (/24/, /31/).

Although overall poverty has decreased since 2001 (60.2 %) there is considerable variation between the different regions (Fig. 38). Poverty increased in one province and deepened in two provinces between 2001 and 2006 (/24/). Furthermore, income inequality has also increased strongly in recent years: Rwanda's Gini coefficient (2006: 0.51) has almost doubled in the past 20 years (Rwanda is in the top 15 % of countries in the world in terms of inequality) (/24/). While the poorest of the poor became even poorer, the incomes of the highest quintile almost tripled between 1995 and 2006. 'Inequality in Rwanda is not only rising, it is changing in nature: it is becoming increasingly rural and increasingly detrimental to the poorest and most vulnerable groups in society' /24/.

Potentials Analysis

Fig. 38: Geographic distribution of wealth quintiles (% of households), according to WFP /74/ The EICV Poverty Analysis provides important information on the role that agriculture plays in income and employment in Rwanda:

Some 65 % of households now derive the majority of their livelihoods from farming their own land, compared with 72 % in EICV1. It is these agriculturally dependent households where poverty has reduced the most. Poverty levels have risen for households who derive their incomes from mainly non-agricultural sources, as has the proportion of households concerned. This suggests that there is increased competition for non-agricultural work and there is some evidence that wage rates have declined in real terms. However, the levels of poverty are much lower for non-agricultural households than for farmers. The poorest households of all are those who derive the majority of their incomes from agricultural wages, with over 90 % of them poor, there was a very small improvement in their poverty levels over the period.

In other words, it is important for poverty reduction that people have enough access to land to be able to derive the majority of their livelihoods (food) from it. Non-agricultural households are not as poor as farming households, but the growing number of people depending on employment outside of agriculture puts pressure on wages as employment opportunities in other sectors are limited. As a result, poverty levels are increasing among non-agricultural households. Poverty is much higher among those who do not farm their own land, but who live off agricultural labour.

Potentials Analysis

The role access to land plays in the accessibility of food In 2006, 79.6 % of the population lived off agriculture (EICV, /24/). Subsistence agriculture is the dominant form of agricultural production: 71 % of working adults were classified as subsistence farmers (EICV). But these subsistence farmers, particularly the households with less than 0.50 ha – 59.5 % of all agricultural households – do not produce enough for their own subsistence (Fig 43).

Percentage of households (%) 100 80 60 40 20 0

> 3.01 ha > 3.01 ha

2.01 - 2.00 ha 2.01 - 2.00 ha

1.01 - 2.00 ha 1.01 - 2.00 ha

0.76 - 1.00 ha 0.76 - 1.00 ha

0.51 - 0.75 ha 0.51 - 0.75 ha

0.26 - 0.50 ha 0.26 - 0.50 ha

< 0.25 ha < 0.25 ha

0 5 000 10 000 15 000 20 000 25 000 30 000

Available calories (Cal/capita/day)

Fig. 39: Calorie production per farm size class in 2009 A. Authors' illustration, according to MINAGRI statistics and M. Koster /80/( Red: lack of household food availability/ lack of household access to food, Yellow: moderate lack, Green: sufficient, see Annex, Table 34 and Table 35)

According to WFP /74/ and Nangayi /36/, in 2009, some 45 % of people's average monthly expenditure was on food. This compares to 53 % in 2006. The average household spent RWF 27,500 a month on food in 2009, compared to RWF 20,000 in 2006 (approximately RWF 3,800 per capita). Rural households also have to purchase considerable amounts of food to supplement their own production. Consumption of oils and fats is based almost entirely on purchased goods. For several staple food crops, there is also quite a high proportion of purchased consumption (e.g. for cassava, beans and peas, roots and tubers, cassava).

One of the main reasons for the limited capacity of poor households to produce enough food, and therefore one of the main causes of food insecurity in Rwanda, is their limited access to land. A WFP study showed, that there is a strong link between plot size and food insecurity. Farmers with less than 0.1 ha were twice as likely to be food insecure as those with 0.5 ha /31/. According to FAO, the minimum farm size required in Rwanda /74/ to meet food needs is 0.75 ha /82/, while for economic sustainability, 0.90 ha is needed /83/. Although the average plot size in Rwanda is 0.81 ha (EICV), according to WFP 37 % of farmers cultivate less than 0.2 ha of land /74/. Around 59 % of the farming households cultivated less than 0.5 ha, and just around four per cent households cultivated more than one hectare /74/. According to Koster /26/, 41.2 % of households cultivate less than 0.25 ha, 59.5 % less than 0.50 ha, 69.4 % less than 0.75 ha, 83.9 % less than one hectare, and 16.1% of households more than one hectare. Less than five per cent of the farming households cultivated more than five hectares /25/. As these huge disparities exist between farm sizes, the general state of food availability does not say much about the availability of, or access to food at the household level. Therefore, this study calculates the calorie 77

Potentials Analysis availability/production according to farm size classification, based on MINAGRI statistics for the 2009A harvest, as well as the ministry's data on land distribution and farm size /84/. To guarantee stable food availability and access, it is assumed that farmers must produce enough food, not only to cover their daily food needs, but also to build up a stock of food and to sell some too. The results are compiled in Table 34 and

Table 35 They show that: 1) households cultivating less than 0.5 ha do not produce enough food for their food/calorie needs (red), which is the case for 59.5 % of households; 2) households cultivating 0.51 – 0.75 ha have an acceptable level of household food availability/household food access (yellow), which is true for 9.9 % of households; 3) farmers with more than 0.75 ha produce enough for their household food availability/access (green) – true for 30.6 % of households. These results confirm the assumption that intensification is a necessary, but not in itself sufficient precondition for achieving household food security, as an element of improved food availability in a country where the majority of the population lives off agriculture but lacks access to land. While the problem of insufficient access to land can be partly attributed to the high population density (2006: 321 cap/km²), a major contributing factor seems to be the highly unequal distribution of land (see Chapter II.1.3 /27/).

Land ownership and usage rights While traditional systems play a crucial role in land use and land ownership rights in Rwanda (or they did until recently), with the new Land Policy and Land Law the Government of Rwanda claims that customary land tenure has been effectively abolished, although rights previously obtained are protected. The processes of land registration and land titling are currently under way, as are the other components of the land policy and various land laws. It would go beyond the scope of this study to describe all these processes in detail. Nevertheless it is important to discuss the implications the new land policy and land laws could have for the security of farmers' land access, as this is an important consideration for the biofuel potentials analysis. Furthermore the legal situation should be compared with reports of the actual situation on the ground.

Some provisions of the Land Law might bring benefits in terms of land ownership rights for farmers; in particular, the provision on inheritance rights for women should help improve their ownership rights. However, some concerns remain regarding the current situation and the possible impacts of existing laws and policies on land ownership and the land use rights of rural, food-insecure groups. These concerns are highlighted below.

Land registration and consolidation The aim of land registration/land titling is to improve security of land tenure and to reduce conflicts over land. However, some of the concerns farmers have about land registration should be taken seriously. In particular, if financial fees are required for land registration, this would constitute a huge constraint on poor farmers trying to claim an official land title. Farmers also fear land taxation based on registered land titles, as this would be a burden especially for land-poor farmers /31/.

Farmers also have several concerns in relation to land consolidation. Poor farmers especially fear 'that a consolidation move could lead to an erosion of their land rights'. Experiences with land consolidation and the valorisation of marshlands show that poor farmers face considerable access barriers to land. While in some locations marshland is given to private investors (concessions), in others it is given to farmers' groups for collective cultivation. In these settings 'marshland associations have progressively claimed user rights that were previously in the hands of individual peasants'. Membership in such marshland associations requires 'both physical power and financial means'. This means that those who have financial means are at a clear advantage in gaining access to marshlands compared to poorer farmers /31/.

Potentials Analysis

It remains unclear what effect the provisions included in the Land Law that prohibit the division of land parcels of one hectare or less (Art. 20) will have on poor people's access to land, bearing in mind that the majority of Rwandan farmers do only have access to less than a hectare.

Expropriation and requisitioning of land As summarised above (see Chapter II.1.3), both the Land Law and the Expropriation Law allow the government to expropriate land owners in the 'public interest', and to requisition land for several reasons, for instance, if the land is 'not efficiently conserved and productively exploited'.

The National Land Centre says of the Expropriation Law that current interpretations and applications of it are inconsistent and in some cases open to abuse. In the absence of a procedural or formal institutional framework for implementation, the current legal basis leaves broad scope for interpretation. This opens up the following problems:

- 'Acts of public interest' are defined in the Expropriation Law, but no legal safeguards (including provisions for compensation) seem to be in place to ensure that such public interests do not harm food security (and it can be argued that food security is one important public interest). This is particularly worrying, considering the great importance of land in the food security situation of Rwanda.

- Experience shows that problems exist concerning 'prior and just compensation'. On the one hand, problems have occurred with the valorisation of land: cases have been reported in which people claim not to have received enough money for their land. In other cases, people have been given alternative land which already belonged to other people /77/. In general, in the context of land scarcity, it has to be asked whether financial compensation alone is fair, if people are not provided with alternative, unoccupied land. It can be argued that financial compensation is not sufficient if adequate alternative land is not also provided for the expropriated land owners, whose livelihoods depend on land.

It remains unclear if a set of guidelines on expropriation in the public interest, which could help remedy these problems, will become mandatory.

Several other concerns related to the Land Law's provisions on land requisition should be mentioned. As described above (see the chapter on land tenure), the law obliges landlords and all those using the land to obey laws and regulations related to the protection, conservation and better exploitation of the land (Art. 61). These will be based on 'the area’s master plan and the general structure of land allocation, organisation and use and specific plants certified by relevant authorities' (Art. 63). The law provides for sanctions if land is not efficiently conserved and productively exploited.

As will be shown later, farmers have several concerns and objections to the government's plans for regional specialisation in specific crops, and also to the shift toward monocultures. Experience shows they are reluctant to adopt the government’s decisions because – based on their own experiences – they fear the negative impacts of these on their food security. There is a risk, therefore, that farmers' land could be requisitioned by the authorities if they are unwilling to cultivate the plants the authorities instruct them to (even if the farmers have good reasons based on food security).

The provisions on the rights of farmers to request repossession of requisitioned land constitute a serious barrier for poor, often illiterate farmers. The Land Law states that the land owner or land user can apply for repossession of requisitioned land only 'in writing, showing new strategies for better exploitation and the resources the applicant has to immediately put the land to proper use in a sustainable way'. The law provides no way for farmers to apply for repossession if they are illiterate and therefore unable to apply in writing 79

Potentials Analysis

There is a risk that the provisions on land requisitioning will have adverse effect on access to land for poor farmers because, depending on the specific demands the authorities make, the farmers' financial resources are too meagre for them to conserve land efficiently or exploit it productively (e.g. buy pesticides, fertilisers, improved seeds etc.).

These risks and concerns are not listed here in order to criticise Rwandan policies, but to highlight the necessity (from a food security perspective) of taking the existing risks into consideration. This is especially important in the light of pending political decisions that will have a strong influence on the scale of future demand for land, as is the case with policies on biofuel production based on domestic energy plants. While some of the problems mentioned above have already arisen,10 only the further development and implementation of laws and policies will show if the other potential risks will become reality, or if measures can be taken to prevent the possible negative impacts. It may be too early to make a final assessment of these risks and concerns. However, it seems necessary to discuss them, and to verify them with further studies as well as a comprehensive and open consultation process with all relevant stakeholders, including farmers.

This chapter has analysed the challenges to and constraints on access to food, and limited and insecure access to land has been shown to be one important factor. It should have become clear that increasing agricultural production and productivity alone will not be sufficient to improve the food security situation if problems of land access and problems of increasing inequality of income and land access are not addressed. Currently, agriculture provides the main basis for income and employment in Rwanda; at the same time, problems of food access are most common among those who depend on agriculture. The limited employment and income- generation potentials outside agriculture as well as the extremely high poverty levels among agricultural labourers further demonstrate the big challenges to food access which Rwanda faces.

The implications of this analysis of food access as an important dimension of food security in the biofuel potentials analysis will be examined below.

III.3.5 Food security analysis – Utilisation As explained above, the analysis of food utilisation will focus on aspects that have an obvious direct link to the biofuel potential analysis: the role of access to energy for food preparation, food storage and food processing. Although other aspects are also very important for the utilisation dimension of food security (e.g. access to clean water, sanitation, health care), these will not be analysed here as they are less relevant for the analysis of bioenergy potentials.

Energy access plays an important role in food security: energy is needed to cook food, which is important because most staple foods cannot be digested if they are not cooked. Energy is also important for storing food (e.g. through refrigeration) and processing it to make food products more durable. Access to electricity is still low in Rwanda; 25 % of urban households and three per cent of rural households have access to electricity (4.3 % of the total population). Of the total primary energy supply, biomass (firewood, wood for charcoal, residues) makes up 86 %, petroleum fuels account for 11 % and electricity just 3 % /23/, /39/. Plans are in place to increase access to electricity to 16 % by the end of 2012.

While 98 % of households need wood for cooking (92 % fuel wood and 5 % charcoal), access to fuel wood is a problem for the poor. The most common reasons for this – as given in a survey conducted in rural areas in 2008 /38/ – include a lack of money to buy fuel wood, a lack of plantations and the rules governing the cutting of firewood. The potential sustainable supply of wood is considerably lower than the demand for the commodity

10 Survey respondents /77/ and according to several press reports in 2009 80

Potentials Analysis

(as timber, construction and energy). The government aims to reduce wood fuel demand by 50 % by 2020 through various measures (e.g. improved stoves, alternative sources of energy access, intensification of wood plantations). However, this seems a difficult policy to implement, and illegal wood cutting is currently increasing /38/. Further research would be needed in order to assess better the extent to which the problems of access to fuel wood hinder poor rural households in cooking their food.

The lack of energy for food storage and food processing is obviously a big challenge for food security as it contributes to large post-harvest losses and seasonal hunger. This is because the farmers are often forced to sell all their produce at harvest time and then have to buy food at higher prices a few months later /77/. However, it should be pointed out that lack of access to energy is not the only cause of problems for food processing and storage.

III.3.6 Food security analysis – Stability of food security Rwanda, like many countries in sub-Saharan Africa, is confronted by serious problems concerning the stability of food security. The variability of rainfall, characterised by a lack of rain or heavy rain and long droughts, are among the main threats to food security. According to Ansoms /31/, more than 50 % of people who are food- insecure or highly vulnerable to food security have experienced droughts recently. Those who are food-secure are much less affected by droughts.

It is not likely that this situation will improve in the future. On the contrary, there is even a high risk that these problems could get worse as a result of climate change. Although a reliable country-specific prognosis has been lacking until now, the IPCC scenarios suggest that sub-Saharan Africa will be especially affected by rising global average temperatures.

Until now it remains unclear how global emissions of greenhouse gases will develop and by how much temperatures will rise. Therefore, there is considerable uncertainty about the future developments of climatic conditions and their impacts on food production in Rwanda.

The role of intercropping in the stability of food security The majority of Rwandan farmers practice intercropping. Instead of planting only one crop on a plot, they prefer to plant different crops together. One of the main reasons for this widespread practice is to mitigate the risk of crop failure. This is especially important for poor farmers who often have no food buffers, even for one season, to support themselves when crops fail. The farmers have learned from experience as such failures hit them hard if they only plant a single crop. The risk is much lower if several crops are planted, because disease or unfavourable climatic conditions may destroy one specific crop while others are not affected /31/. These experiences are backed up by agricultural research findings on the role of agro-biodiversity in risk mitigation against crop failure due to changing climatic conditions and crop diseases /85/.

Another reason for intercropping is that it enables subsistence farmers who do not have enough purchasing power to buy food, to provide diverse foods for themselves, which is important for their health. Furthermore, intercropping is important for stabile food security as farmers can mix different crops with short-term and long- term cultivation cycles. This enables them to harvest crops with short-term cycles (e.g. beans) and crops which can be harvested continuously (sweet potatoes) while waiting to harvest the crops with long-term cultivation cycles (e.g. cassava) /31/.

Against this background it is understandable that poor farmers in particular are worried about current government plans for crop regionalisation, which will force them to give up planting specific crops (depending on the location/province) and surrender their varied production systems in favour of a shift to monocultures determined by the authorities. They argue that monocultures may be suitable and may promise higher yields 81

Potentials Analysis under certain conditions – 'if climatic conditions are right, if one has the chance to have chosen the right crop, if one has access to the right seed, if one has enough manure, if the field is sufficiently large, if one has the necessary physical force, if one receives adequate training' – but they also make it clear why such a technique seems unsuitable in their case /31/.

Furthermore, farmers fear the increasing dependency on markets if they are forced to focus on only one or a few crops. They see there is a risk that they will be unable to get good prices for their products at the market or get access to the other food crops they need. The underlying problems include the isolation and limited market integration of their villages, the lack of transport facilities, their weak bargaining power in the markets (intermediaries setting the price), and the different market prices for different products (e.g. the risk of 'bringing a lot of sorghum to the market to buy only a small amount of cassava') /31/.

Considering the farmers' well-founded fears, it is easy to conclude that, without measures to provide comprehensive solutions, forcefully restricting farmers to planting just a few crops in a mono-cropping system would expose them to a higher risk of food insecurity – especially the poor farmers who are already food- insecure. There are no easy or quick solutions for this situation.

III.3.7 Implications for the biofuel potentials analysis

The questions already mentioned above will now be used to assess the implications of the food security analysis for the overall of biofuel potentials analysis.

Is land available on which to produce energy plants for liquid biofuels – land that is not and will not be needed to maintain and improve the national food security situation? The analysis has shown that land scarcity is a serious problem in Rwanda that presents a challenge to current and future food security. It is not recommendable to promote energy crop plantations in Rwanda because all arable land is needed for food production. Besides this, marginal land also has a considerable part to play in current and future food security. It is currently used as pasture, for tree plantations (for wood fuel, which is important for food security) and even for the production of food crops by poor farmers due to the scarcity of more productive land. Considering the rate of population growth, the need to use marginal land for food production may even increase. It may be possible to improve the productivity of marginal land through various measures.

Considering developments over the past 50 to 60 years, it seems unlikely that productivity will rise enough in the coming years to provide enough surplus to justify using plantations for energy plants for liquid biofuels (according to the GAPP analysis a five per cent annual increase would be needed). Even if a five per cent increase in agricultural productivity is achieved, this does not automatically imply greater availability of food for local/national consumption. This would only be the case if productivity of the main food crops increased accordingly. Since the productivity of some major food crops is currently decreasing, and as intensification is not being promoted for all major food crops, it cannot be assumed that enough spare land will be available for energy plant plantations in the (near) future. Against this background, the only way to produce energy plants for liquid biofuels would be to use areas that cannot be used for food production or other uses important for food security. The analysis suggests that there seems to be potential to grow energy plants alongside roads as this would not compete with food production. Furthermore, energy plants could be planted as fences or in intercropping systems in ways that would not prevent food or fodder production.

Potentials Analysis

Are the farmers' land use and land ownership rights secure enough to prevent evictions or displacements resulting from the increasing demand for and competition over land in the case of large scale investments (in energy plant production)? As explained above, land use and land ownership rights of farmers are currently exposed to several risks. The legal framework allows the authorities broad scope to expropriate or requisition land from farmers for various reasons. While it is widely acknowledged that current interpretations and implementation of the expropriation laws are problematic, no decisions have yet been made on how to remedy the problems effectively.

Besides the risk of losing land ownership rights, studies and press reports reveal that poor farmers also face problems of deteriorating land use rights, especially on marshlands (which have traditionally played an important role in their food security) /31/. It can therefore be assumed that poor farmers rely increasingly on cultivating marginal lands.

Since land policies and the legal framework in Rwanda are currently undergoing comprehensive changes, it may be too early to make a final judgement about their overall positive or negative impacts on land ownership and land use rights. But at a time when policy decisions are being made about the production of liquid biofuel, it seems important to point out the current risks and then await further developments before decisions are made which could have a strong impact on the demand for arable land.

Therefore, besides the arguments made above about the lack of spare land for energy crop plantations, the land access situation faced by poor farmers (especially considering the importance of land access for food security) further confirms that energy plant plantations cannot be recommended for Rwanda.

Could energy crop production provide farmers with increasing or additional income? The analysis of agricultural production systems has shown that producing energy plants like jatropha, moringa, castor on marginal lands is economically not profitable under current conditions. Eucalyptus production on marginal land is much more profitable for farmers (although it is important to note that eucalyptus may cause problems of land degradation).

Although the profitability of energy plants like jatropha and moringa would be higher in intensified farming systems, the profitability of many food crops would also be much higher. Therefore the production of these energy plants would not provide farmers with increased income, compared to the alternative production of food crops like tomatoes, onions, cassava etc. Therefore, even in intercropping systems the benefits for farmers are questionable since intercropping of food crops can provide more income and greater stability of food supply.

Additional income could only be generated if energy plants like jatropha are planted in places where food crops cannot be planted – alongside roads or as fences.

Could it be an option to use part of the land (which is currently used for food or cash crops, such as coffee/tea production) to grow energy crops, while increasing imports of food and decreasing exports of cash crops? Energy crops could arguably be an alternative to food crops, if it is more profitable for farmers to cultivate them. However, the agricultural system analysis shows that the production of many food crops is much more profitable for farmers than the production of energy plants (jatropha, moringa, castor).

Furthermore, it should be considered that shifting from food crop production to cultivation of energy plants would require greater productivity of the food crops or increased food imports, in order to meet national food demands. However, current developments show that the required rise in productivity of food crops has so far not been forthcoming. At the same time, the increased demand for food due to population growth has to be

Potentials Analysis considered. Therefore, taking account of productivity developments (see elaborations above), energy plantations could only be promoted at the cost of raising the dependency on food imports.

As food imports are already increasing, and as the country already faces terms of trade challenges and national debt, it seems ill advised to make Rwandan food security even more dependent on food imports. Of course, it can be argued that the lower dependency on oil imports resulting from liquid biofuel production would make savings of foreign exchange possible. However, as global food prices are expected to be high and volatile in the coming years, it seems evident that raising dependency on food imports will put countries – especially the less developed ones – in a very vulnerable position in terms of food security.

It might be worth investigating whether a shift from cash and export crops to the cultivation of energy plants for liquid biofuels would be a viable alternative, as this would not compete with food crops. The main question is how profitable energy crops would be in comparison to the production of other cash crops. The agricultural system analysis showed that, for example, cultivation of jatropha in an intensified farming system can be more profitable than coffee production. At the same time, research is needed to ascertain if the loss of export earnings would be compensated by the savings from the reduced need to import oil. Further analysis is therefore needed to assess the viability of this option.

Could it be an option to use surplus food production to make liquid biofuels? As described above, Rwanda's current food crop production does not provide enough surplus to use for the production of liquid biofuels. Although the country experiences seasonal surpluses of food during harvesting times, it also faces the problem of post-harvest losses due to the lack of storage and food processing. Therefore, one should be cautious before concluding that the seasonal surplus could be used to produce liquid biofuels. One of the main objections is that it would be better, from the perspective of food security, to support farmers in improving their facilities for food storage and processing. This would help reduce post-harvest losses and improve access to food during the lean periods in the months before harvests.

Is it a viable option to use liquid biofuels for rural electrification? If liquid biofuels were used to enhance rural electrification, this could also benefit food security as it would improve the possible means of food preparation, storage and processing. Nevertheless, from an economic point of view, rural electrification using liquid biofuels cannot be recommended for Rwanda because of the high production costs involved. Comparisons should be made with other means of rural electrification and enhanced energy supply for food preparation, storage and processing. However, this was not the task of the present study.

What obligations concerning the human right to adequate food are relevant in the context of the political decision-making related to liquid biofuel production? As mentioned above (see Chapter III.3.1), states that have ratified the International Covenant on Economic, Social and Cultural Rights (ICESCR) have binding obligations under international law to progressively realise the right to adequate food (as well as other rights enshrined in the ICESCR). This also applies to Rwanda, where the ICESCR entered into force in January 1976 after it was ratified in April 1975.

The Rwandan Government is therefore obliged to respect, protect and fulfil the right to adequate food in all its policy decisions, legislative measures, government programmes and suchlike, in areas which are directly or indirectly linked to national food security. These obligations are especially relevant to the decisions the Rwandan Government is planning to take regarding the production of liquid biofuels. In the current context, it means the government must refrain from measures aimed at producing liquid biofuels if these should reduce the current level of access to adequate food. How this obligation is to be fulfilled in the context of the Rwandan food security situation can easily be deduced from the explanations given above. In the current context the obligation 84

Potentials Analysis means the Rwandan Government must take measures to ensure that enterprises or individuals who want to invest in liquid biofuel production – or the cultivation of energy crops for liquid biofuels – do not deprive individuals of their access to adequate food.

It would go beyond the scope of this study to describe all the obligations related to the right to adequate food. Nevertheless two human rights principles should be mentioned, which are especially important for policies related to liquid biofuel production.

(1) Participation of all relevant stakeholders, including farmers, in relevant policy decisions and measures is crucial in order to respect and protect (and fulfil) the right to food. This means more than just sensitising them about government programmes; it means taking their concerns into consideration and drawing on their experiences. (2) Transparency and public information about planned policy decisions and measures are important prerequisites for the participation of relevant stakeholders in political decisions.

III.3.8 Conclusion It has been shown that some significant challenges to food security must be taken into consideration when analysing liquid biofuel potentials, and in decision making about policies on biofuels, as its promotion would have a strong influence on the future food security situation (depending on the scale of promotion). From a food security perspective, it seems clear that, in the current situation and with the risks and challenges that face future development, there is no potential for energy crop plantations as they would compete for scarce land that is urgently needed to feed a continuously growing population. (A possible exception to this might be to use areas which until now have been cultivated for non-food crops and cash crops like coffee and tea. This would call for further analysis). The risks and the likely adverse impacts of energy crop plantations on food security obviously outweigh the opportunities deriving from energy crop plantations. However, the small-scale production of energy crops in ways that do not compete with food cultivation is a different matter. Energy crops could be planted alongside roads and as fences without endangering food security. Besides the additional income received by the rural population, another potential benefit could arise if the energy crops are used for rural electrification which would support facilities for food storage and processing. Nevertheless, from an economic point of view, all alternatives must be considered for rural electrification and for improving energy access for the rural population.

Finally, it should be noted that this food security analysis has not covered all the important aspects for a comprehensive picture of the food security situation in Rwanda. This would have gone beyond the scope of the study. Instead the analysis focused on some risks and challenges which are considered relevant in the context of the liquid biofuel potentials analysis. The focus on the risks and challenges should not be interpreted as ignorance of the positive developments and opportunities related to food security, or of the high commitment shown by the Rwandan Government to measures intended to improve the food security situation. It is rather the response to a justifiable need for caution in such a sensitive decision making process: the promotion of liquid biofuel production must be viewed in the context of the international debate surrounding the competition between food production and biofuel production.

It is assumed that it is wiser to analyse the risks rigorously before a decision is made (and thus be able to take precautions) than to be confronted with painful surprises after decisions have been made too optimistically. At the same time, it must be acknowledged that food availability is especially vulnerable to factors that can barely be influenced or even foreseen by individual governments. Such factors include the high variability of rainfall and climatic conditions, the volatility of global food prices, and the opportunities and threats posed by international food markets on national food availability. This also reaffirms the need for caution (“precautionary principle”) during an analysis of biofuel potentials and any related actions

Technical- economic Analysis

IV. Technical- economic Analysis

(by German Biomass Research Centre)

Against the context of the conditions described in the second chapter and the results of the potentials analysis in the third chapter, this chapter now attempts to identify a number of biofuel production scenarios under Rwandan conditions, and to assess them in technical and economic terms. The scenarios, which are investigated in greater detail in Chapter 4.3 [I.1], are listed below:

Scenario 1: Domestic cultivation of jatropha on marginal land and biodiesel production

Scenario 2: Domestic cultivation of jatropha through integrated farming systems and biodiesel production

Scenario 3: Domestic cultivation of jatropha through integrated farming systems and production of vegetable oil for rural electrification

Scenario 4: Domestic production of bioethanol from sugarcane by shifting sugar production to bioethanol production

Scenario 5: Importing of palm oil and biodiesel production.

IV.1 Technical analysis The technical analysis of each scenario involves assessing the process-specific stages in the production of the final product, in relation to the feedstock input and the scale and function of the facility (small, large scale - centralised, decentralised production). In the context of the entire value chain and in consideration of the preceding agricultural analysis, the system boundaries for the technical analysis are shown in Fig. 40. The approach used is summarised in Fig. 41. The analysis defines the settings/scenarios, beginning with the feedstock type, the conversion technology and scale of the facility. This is based on prior analysis of the biomass potential and the availability and potential of the land, and it take into consideration general circumstances, such as the goals of the energy policy (in terms of product use) and the infrastructure situation. Each setting is further analysed in terms of the feedstock and product properties, as well as the mass and energy flows of the conversion processes. The analysis is complemented with available data from literature sources.

Auxiliaries

Biomass supply Biofuel Main product Use Distribution production (mobile /stationary) Land

By-products

Fig. 40: System boundaries

Technical- economic Analysis

TECHNICAL ANALYSIS

Frame conditions Definition of settings Analysis

Feedstock & product Biomass potential Feedstock type properties

End-use Technology pathway Operating conditions (e.g. mobile, stationary) (e.g. FAME, veget. oil) (e.g. mass, energy flows)

Infrastructure Plant capacity Literature data (e.g. logistics) (e.g. small, large scale)

Fig. 41: Technical analysis approach

IV.1.1 Biodiesel production In Rwanda biodiesel could be primarily produced from oil seeds such as jatropha, oil palm, castor, moringa and others, but also from waste oils and fats. In the case of oil seeds, the process involves recovering the oil from the seed using mechanical (pressing) or chemical (solvent) extraction, and then refining it. The press cake can be used either as fertiliser or fodder (after detoxification in the case of non-edible seeds). In large scale facilities, the oil content of the press cake is recovered using solvent extraction (usually hexane). The oil primarily contains triglycerides (esters of glycerol with fatty acids) as well as a certain percentage of free fatty acids (FFA). Refining the oil involves firstly a process of sedimentation and filtration to remove particles from it. Then a series of chemical cleaning steps include de-gumming to remove phospholipids (emulsifiers that decrease the biodiesel yield), neutralisation of FFA with an alkali solution (the reaction produces soap that can be easily separated) and, in rare cases, also bleaching to remove the remaining FFA, gumming material and mineral traces (using clay material, the so-called bleaching earth). The refined oil is converted to biodiesel in a trans-esterification process. The triglycerides (esters of glycerol with the fatty acids of the oil) in the oil react with an alcohol (usually methanol) under basic catalytic conditions (usually NaOH, KOH or their methylates) to form fatty acid methyl esters (FAME, biodiesel) and glycerol. For oils with a high FFA content, an acidic pre-esterification step is carried out first, before the basic trans- esterification. This is because FFA react with the alkali catalyst and produce soap, which decreases the biodiesel yield. During the esterification, the FFA react with methanol under acidic catalytic conditions (usually H2SO4,

H3PO4) to produce FAME and water. After the trans-/esterification process, the biodiesel is washed to remove any remaining soap that formed during the reaction as well as any remaining amounts of glycerol and excess methanol. It is then dried to remove its water content. In rare cases, vacuum distillation may follow to achieve greater purity in the final product. Glycerol can be further purified (acid neutralisation, evaporation, vacuum distillation) depending on the purity grade for the desired product (crude: 60-80 %wt, pharmaceutical-grade: 99.5 %wt) /86/, /87/.

Technical- economic Analysis

IV.1.2 Bioethanol production Bioethanol can be produced from sugar, starch or even lignocellulosic feedstock. For obtaining sugar from biomass, sugarcane, sugar beet and molasses are the most common feedstocks. In the case of sugarcane, the process first involves extracting the sugar juice from the cane. The stalks are heated and washed to weaken their structure and then crushed to extract the juice. The waste product of the crushing stage (the so called bagasse) can be burnt to produce heat and electricity for the process, or it can be used as fertiliser. The juice is transported to the fermentation area where microorganisms (yeast) convert sugars (glucose molecules) to ethanol. The sugar content of the resulting mixture is around 10 %wt in ethanol content. It is then carried to the ethanol distillation zone where, through a series of distillation columns, the ethanol concentration increases to 35 %wt. The distillate (vinasse) from the bottom of the columns can be used as fodder or fertiliser, or it can be digested to create biogas that can be burnt to produce heat and electricity for the process. The ethanol is concentrated further to a 96 %wt using a rectification column, where water and other unwanted hydrocarbons from the fermentation process are removed. At this point ethanol and water form an azeotrope mixture (one in which the composition in the liquid phase remains constant also in the vapour phase). Thus it cannot be separated further through simple distillation. To recover ethanol of 99.7 %wt purity generally involves the use of molecular sieves. These consist of crystalline aluminium silicate material with very small pores that allow the further separation of water and ethanol molecules /88/.

IV.1.3 Product properties Table 13 shows the properties of jatropha and moringa biodiesel, as reported in various literature sources.

Technical- economic Analysis

Table 14 shows the properties of ethanol in the form of two ethanol-gasoline blends. Both tables show that the properties of the biofuel match the specifications for fossil diesel (AGO) and gasoline (PMS) set by the Rwandan Ministry of Infrastructure. Table 13: Diesel standards and biodiesel properties

Rwanda diesel standards Jatropha biodiesel Moringa Property Unit * ** biodiesel*** min/max Value Density (20 oC) kg/m3 range 815-865 873-884 (15 oC) n.i. Flash point oC min 66 148-191 n.i. Cloud point oC max 12 10.2 18 Pour point oC - - 4.2 17 CFPP oC max 6 0-2 n.i. Cetane number min 48 52-62 67.07 Viscosity (40 oC) mm2/s range 1.6-5.5 4.23-5.13 4.83 Acid number mgKOH/g max 0.5 0.18-0.5 0.39 Water % vol max 0.05 0.14 n.i. Sulphur % mass max 1.0 <0.1 0.0024 Glycerol % mass - - 0.02 0.015

Sources: * /39/ ; ** /89/, /90/, /91/, /92/, /93/, /94/ ; *** /95/ ; n.i. : no information

Technical- economic Analysis

Table 14: Gasoline standards and ethanol blend properties

Rwanda gasoline Property Unit standards* E10 blend** E20 blend** min/max Value Density (15 oC) kg/m3 max 780 761 765 Octane RON min 93 98.1 100.7 Lead g/l max 0.013 <0.0025 <0.0025 Distillation 10 % evap. oC max 71 50.8 52.8 50 % evap. oC max 115 71.1 70.3 90 % evap. oC max 180 166.4 163.0 Final boiling point oC max 210 197.5 198.6 Residue % vol max 2 1.5 1.5 Existent gum mg/100ml max 4 0.2 0.6 Sulphur % mass max 0.15 0.0055 0.0049

Sources: * /39/ ; ** /96/

Technical- economic Analysis

IV.2 Economic analysis The economic analysis is applied within the same system boundaries as the technical analysis. The primary focus is on the costs of biofuel production, taking into consideration the cost of the biomass feedstock. The model applied to determine the biofuel production costs is based on the annuity method as described in VDI 2067 and VDI 6025 (/97/, /98/). Its basic components are presented in Fig. 42. The annuity method introduces an annuity factor that enables a project's non-recurring payments (e.g. investment costs) and regular payments (e.g. material costs) to be consolidated into an annual average payment over the assessment period of the project. In the annuity method the costs are separated into the following categories:

Capital related costs: all the costs connected to the components of the facility, as well as their repair.

Consumption related costs: the costs of supplying the biomass, as well as the consumption of energy, chemicals and other auxiliaries.

Operation related and other costs: costs such as labour, operation, maintenance, administration, insurance, waste-handling, contingency costs and miscellaneous costs associated with the operation of the facility.

Revenues: earnings received from selling the main product and any by-products, and earnings from other sources, such as government subsidies - + Capital investment Biomass costs Labour By-products (e.g. glycerine) Financing Loading hours Service and operation Market prices Lifetime Auxiliaries Maintenance (subisidies?) etc.

Consumption-related Operation-related and Capital-related costs costs other costs Revenues

Annual total costs [USD/a] of period 0 Annual total revenue [USD/a] of period 0

Annuity method Inflation rate Calculation model acc. VDI 2067 and VDI 6025

Annual production Annuity [USD/a] Production costs [USD/l Product , USD/kWh Product] [l Product/a, kWh Product/a] Average profit/loss of all periods average costs of all periods

Fig. 42: Annuity method approach

Table 15 shows the values used for a number of general parameters necessary for the economic analysis (e.g. inflation, interest rates, labour costs, etc.), based on prevailing conditions in Rwanda.

Table 16 shows prices for the feedstock sources, by-products and chemicals used in the different processes. Particularly for chemicals and auxiliaries, most prices used in the calculations were derived from world prices as Rwandan prices could not be obtained. Prices for feedstock were determined by inland agricultural experts. For the realisation of a project, 70 % of the financing is assumed to be the enterprise's own capital (investors) and 30 % to be borrowed capital (banks). The project’s assessment period is taken as 15 years. Any other specific data required for the economic analysis are listed under the respective scenario in the following chapter.

Technical- economic Analysis

Table 15: Economic parameters

Parameter Unit Value Remark Equity ratio % 70 Debt capital % 30 Inflation % 15.6 August 2009 Interest on debt capital % 16.9 June 2009 Interest on equity % 10.5 June 2009 Project assessment period a 15 Labour cost USD/a ; FRW/a 1,680 ; 900,000 Engineer salary Electricity price USD/kWh ; FRW/kWh 0.19 ; 109 Industrial price EUR to FRW 798.28 18/08/2009 Exchange rates USD to EUR 0.686 20/08/2009 – 20/09/2009

Sources: /99/, /100/, /41/, /23/

Table 16: List of prices for feedstock, auxiliary materials and by-products

Price Price Material Unit Material Unit considered considered Auxiliaries Feedstock Electricity (industrial) USD/kWh 0.19 Jatropha seeds USD/t 456 Heat USD/kWh 0.09 Moringa seeds USD/t 545 Water USD/t 1.09 Castor seeds USD/t 456 Methanol USD/t 232 Sugarcane USD/t 26 Potassium hydroxide (KOH) USD/t 4000 Palm oil imported USD/t 1000

Calcium hydroxide (Ca(OH)2) USD/t 130 By-products

Phosphoric acid (H3PO4) USD/t 725 Jatropha cake USD/t 29 Hydrochloric acid (HCl) USD/t 145 Glycerine USD/t 1500

Sulphuric acid (H2SO4) USD/t 130

Sodium methylate (CH3ONa) USD/t 652

Sodium carbonate (Na2CO3) USD/t 290

Technical- economic Analysis

IV.3 Scenario building The goal of the scenario building is to identify scenarios that cover a wide range of biomass production sizes and functions, biofuel production and the final use of the product. With that in mind, the scenarios include the availability of feedstock and land, examine both mobile (transport sector) and stationary (electricity) uses, and involve centralised and decentralised feedstock cultivation, as well as the use of small and large scale facilities with a centralised function. It is important to note here that the scenario building is not intended to propose and support one option over any others; it is rather to provide an overview of the technical-economic characteristics of the scenarios.

IV.3.1 Scenario 1 The first scenario concerns the domestic cultivation of jatropha seeds on marginal land and the subsequent production of biodiesel for the transport sector. Some 10,000 ha of land of sub-optimal soil fertility and water supply are dedicated to this purpose. Jatropha seeds consist of about 35 % oil; the dry seed yield for marginal lands is considered to be 0.4 t/ha. The biodiesel production facility is assumed to be located close to the cultivation area. Considering the low feedstock yield and the limited amount of land available for this scenario, the facility is considered small scale, but it has a centralised function as it will be the main biodiesel distributor in the region. The farm-gate price for the dry jatropha seeds is taken to be USD 456 /t. In the absence of any reliable figures, USD 10 /t is added to that feedstock price as the assumed cost of transporting the biomass. The same applies to all feedstock considered in the scenarios analysed. Here it should be noted that in all the scenarios, the estimates for the labour force are not based on Rwandan conditions, as it is rather unclear what the situation in a Rwandan facility would be. However, this does not really affect the final production costs as given in Chapter IV.3.7. Fig. 43 presents the flow sheet for the process, according to the description in Chapter IV.1.1.

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%LRGLHVHO WD Fig. 43: Scenario 1 - Process flow sheet Using the annuity method described in Chapter 4.2 [I.1], the biodiesel production costs are determined as depicted in Fig. 44. The biofuel distribution costs for all scenarios are regarded separately from the production costs and are assumed to be equal to the distribution costs of fossil fuels (USD 0.06 /l). They are considered the same in all the scenarios in which the final product consists of liquid biofuels. 93

Technical- economic Analysis

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Fig. 44: Scenario 1 – Biodiesel production costs The high production costs specific to biodiesel are attributed to the relatively high feedstock costs as well the low yield of jatropha on marginal land, which results in low biodiesel output. Consumption-related costs are the biggest part of the total production costs. Furthermore, the fact that jatropha cake is not edible decreases its value, since detoxification is hardly used and the cake can only be sold as fertiliser. Revenues come mainly from glycerine, the price of which is very high in Kigali. Besides jatropha, castor oil seeds (Rizinus communis) and moringa seeds (Moringa oleifera) also grow in Rwanda. They are an alternative crop that could be cultivated and used for the production of biodiesel. Castor seeds contain about 40 % oil, and moringa seeds about 33 %. Production yields for the two species are considered to be 0.2 t/ha and 0.4 t/ha respectively, on marginal land. Farm-gate prices are considered to be USD 456 /t and USD 545 /t, respectively. To compare them with jatropha, the Scenario 1 calculations were repeated, using castor and moringa as feedstock (Fig. 45). Despite the fact that moringa has a comparatively high per hectare oil yield (0.13t/ha for moringa; 0.14 t/ha for jatropha; 0,08 t/ha for castor), it involves the highest production costs due to the higher price of the feedstock. This highlights the influence of the feedstock costs on the final result. Biodiesel made from castor has the lowest specific production costs due to the high percentage of oil in the seed and the lower investment costs resulting from the low seed yield.

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Biofuel Production Costs (USD/l (USD/l Costs Production Biofuel Moringa Castor Jatropha -1.00

Fig. 45: Biodiesel production costs for different oil seeds 94

Technical- economic Analysis

IV.3.2 Scenario 2 The second scenario examines the cultivation of jatropha in a decentralised system, through integrated farming systems, alongside roads, in fences around arable land, as hedgerows along anti-erosion strips, in the Akagera Park belt and around marshlands. The yield of jatropha seeds varies, according to the manner of their cultivation, from 0.8 – 2.0 t/km. The jatropha suitability map is used to identify the regions where the plant can be cultivated, as defined by the climatic conditions and the availability of land. The respective lengths of the available roads, fences, marshlands, anti-erosion strips and the Akagera belt have been identified separately for each district using GIS mapping systems. A rate of 30 % realisation was assumed for this type of cultivation (and 60 % for the Akagera belt). This means that for each kilometre of road or fence, 0.3 km are assumed to be cultivated in this manner. The scenario poses logistical questions, such as how easy it would actually be to cultivate, harvest and collect jatropha in this manner. It is not possible economically to evaluate the costs of the short-distance transport and collection involved in such a decentralised form of cultivation. For that reason, each district is represented theoretically by a dot on the map at its centre, where all of that district’s jatropha is collected, and from where it is transported to the central conversion facility for the biodiesel production. Despite the fact that it covers the entire country, this type of decentralised feedstock production yields a relatively low quantity of jatropha seeds. Therefore, the facility under consideration (assumed to be located in the vicinity of the capital) will be relatively small in scale, but it will have a centralised function as it will be the main location for biodiesel production and distribution in the country. Biodiesel distribution costs are considered to be USD 0.06 /l. Fig. 46 present the flow sheet and Fig. 47 the biodiesel production costs for the scenario.

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Technical- economic Analysis

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Fig. 47: Scenario 2 – Biodiesel production costs Similar to the first scenario, the costs of producing biodiesel in this scenario are high because of the high cost of the feedstock. Also, the seed yield from the unconventional form of cultivation is low.

IV.3.3 Scenario 3 As with the second scenario, the third scenario also assumes an integrated farming system for jatropha cultivation. The end product in this case is electricity, with special attention being paid to rural areas. The jatropha suitability map and the GIS information on roads, marshlands etc. are now combined with the electricity network map in order to identify districts with limited or no access to electricity. Each district's collected quantity of jatropha is treated on site in its own small-scale oil mill to produce jatropha oil. This is burnt in a small combined heat and power (CHP) unit to generate electricity and heat. Electricity and heat efficiency of 38 % and 46 % respectively have been assumed for the CHP unit. Roughly 35 % of the heat produced is assumed to be sold at a rate of USD 0,03 /kWh, the rest being released without being utilised. The oil mill and the CHP units are decentralised from a national perspective, yet they perform a centralised function for each of the districts. Sample calculations are shown here, using the district of Kirehe (in south-eastern Rwanda), where an electricity grid is not yet available. The process flow sheet and electricity production costs are shown in Fig. 48 and Fig. 49, respectively.

Technical- economic Analysis

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Fig. 49: Scenario 3 – Electricity production costs Based on the population of Kirehe district11, the analysis shows that around 30 kWh/capita can be generated in the district, which is significantly higher than the mean value for the country (20 kWh/capita). The economic analysis does not include costs of constructing the necessary distribution network, or the grid connections etc. The same calculations have been carried out for the district of Nyaruguru (southern Rwanda), where access to electricity is also limited, and for the Akagera belt (eastern Rwanda), which is not confined to a single district but includes parts of several (Fig. 50). Electricity production costs using jatropha oil (USD 0.55 /kWh) would be considerably higher than current consumer prices (USD 0.21 /kWh). Therefore, as the purchasing power of the population in the selected regions is low, subsidies would be needed to promote their access to electricity. For purposes of comparison, the same calculations were conducted with diesel as the fuel, instead of jatropha oil (using the example of Kirehe district). The three variations presented in Fig. 51 correspond to the taxation of diesel for electricity production. In the first option (A), diesel is taxed at the same rate as when used for transport

11 240,145 people (2008); projection from 2006 statistics with 2.3% population growth /101/ 97

Technical- economic Analysis purposes (i.e. diesel price USD 1.38 /l). In the second option (B) diesel is taxed at an assumed 30 % of the aforementioned tax (i.e. diesel price USD 0.92 /l), and in the third option (C), the diesel is not taxed at all (i.e. USD 0.72 /l). In all three cases, electricity generation using diesel as fuel is less costly than using jatropha oil. If we focus on the second option and a) consider that around 50 % of electricity produced in the country comes from diesel12 (the rest being hydro), and b) assume that hydropower production costs approx. USD 0.08 /kWh, then the final mix would result in electricity production costs of around USD 0.21 /kWh (taxation of electricity itself not included), which about the same as the electricity price in Rwanda.

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Fig. 50: Electricity production costs in other regions

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Fig. 51: Electricity production from diesel and jatropha oil

12 Heavy fuel oil is also used, but for comparison purposes only diesel is considered 98

Technical- economic Analysis

IV.3.4 Scenario 4 The fourth scenario involves the production of ethanol from sugarcane. Until now, sugarcane has been cultivated in plantations yielding 80 t/ha, which are used for the production of sugar. The assumptions underlying this scenario are that the sugarcane is used for ethanol production instead of sugar, and that sugar is imported. Production will take place in the existing sugar facility where the necessary equipment will be integrated. The farm-gate price for sugarcane is assumed to be USD 26 /t. The actual use of bagasse in the existing sugar factory is not entirely clear. Here bagasse is treated separately, and is assumed to be burnt for energy purposes. It produces electricity that could cover internal demand or be sold to the grid (in which case it assumed that it is sold for one third of the grid price: USD 0.06 /kWh), and it produces heat (35 % of the heat is assumed to be sold for USD 0.03 /kWh). Distribution costs are taken to be USD 0.06 /l. Fig. 52 and Fig. 53 show the flow sheet of the process and the bioethanol production costs.

Sugar cane 150 000 t/a

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Bioethanol production costs (USD/l costs production Bioethanol -0.40

Fig. 53: Scenario 4 – Bioethanol production costs

Technical- economic Analysis

This scenario shows considerably lower production costs than the biodiesel scenarios. This is due, on the one hand, to the price of the sugarcane feedstock and, on the other, to the revenues from the use of bagasse. However, this fact should be set against the expenditure of importing the country’s total sugar demand.

IV.3.5 Scenario 5 The fifth scenario involves the production of biodiesel from imported palm oil (mainly from Kenya) in a centralised, large-scale facility. Palm oil is already imported to Rwanda for nutritional purposes. In fact, Rwanda imports almost all the vegetable oils it consumes. The imports for biodiesel production would be additional to those already occurring and would not affect the amount used for food. The assumption behind the scenario is that the imported palm oil will produce enough biodiesel to replace the entire amount of imported fossil diesel used by the transport sector. Distribution costs are assumed to be USD 0.06 /l. Fig. 54 and Fig. 55 show the flow sheet of the process and the biodiesel production costs.

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Fig. 55: Scenario 5 – Biodiesel production costs The biodiesel production costs amount to USD 1.02 /l. This is by far the least cost-intensive biofuel option, but there would be little value addition inside the country. Only the trans-esterification is carried out here, but the most significant employment and income generating opportunities occur at the biomass production stage of the value chain. 100

Technical- economic Analysis

IV.3.6 Overview of results Table 17 provides an overview of the basic characteristics of each scenario, as well as a summary of the results from the preceding analysis. Table 17: Overview of scenarios

Parameter Scenario 1 Scenario 2 Scenario 3 Scenario 4 Scenario 5 Jatropha, Jatropha, Jatropha, Sugarcane, Feedstock domestic domestic small- domestic small- domestic Palm oil, production and plantation, scale farming scale farming plantation, imported supply marginal land systems systems arable land Biodiesel, small CHP/electricity, Bioethanol, Biodiesel, small Biodiesel, large Conversion scale, small scale, small scale, scale, centralised scale centralised into product centralised centralised centralised function function function function function ~ 7 GWh/a ~ 1 kt/a ~ 25 kt/a ~ 10 kt/a ~ 48 kt/a Capacity electricity (Kirehe biodiesel biodiesel bioethanol biodiesel example) Capital investment, million USD 0.41 8.71 1.17 10.09 8.7 (conversion technology) Production & distribution 1.87 1.84 USD 0.55 /kWh 1.21 1.08 costs, USD/l Production costs *, 2.05 2.02 - 1.86 1.19 USD/lfos. eq. Fossil USD 0.21 /kWh reference, 1.38 1.38 1.38 1.38 (residential) USD/l * 1l biodiesel is energetically equivalent to 0.91l fossil diesel ; 1l bioethanol is energetically equivalent to 0.65l gasoline /102/ Fig. 56 shows a graphical representation of the production costs for each scenario and compares them to the respective fossil equivalents. The shaded areas represent the amount of financial support needed for the products to be cost competitive.

101

Technical- economic Analysis

) 2.20 2.20 2.05 2.02 2.00 1.86 2.00 1.80 1.80 fuel equivalent 1.60 1.60 1.38 1.40 1.40 1.20 1.20 1.19 1.00 1.00

0.80 Taxes 0.80 0.55 0.60 0.49 0.60 0.40 0.28 0.40 0.20 0.20 0.21 0.00 0.00 Electricity production costs (USD/kWhel) costs production Electricity Biofuel production costs (USD/l costs production Biofuel Scenario 1 Scenario 2 Scenario 4 Scenario 5 Diesel/gasoline Scenario 3 Diesel rural Diesel rural Electricity price price electrification electrification (full diesel tax) (no diesel tax)

Fig. 56: Overview of production costs

102

Technical- economic Analysis

IV.3.7 Sensitivity A sensitivity analysis was conducted to determine possible parameters affecting the biofuel/electricity production costs. It is apparent from Fig. 44,Fig. 45,Fig. 47, Fig. 49, Fig. 50 and Fig. 53 that consumption-related costs have the greatest effect on the overall production costs. More specifically, Fig. 57 shows the effect of the variation of a number of parameters on the biofuel production costs. The basic conclusion is that as it forms the largest part (i.e. around 90 %) of the consumption-related costs, the cost of feedstock is the main influencing factor for biodiesel production costs (here illustrated for Scenario 1). Feedstock costs account for around 85 % of overall production costs, if revenues are not taken into account (around 95 % with revenues considered). By-product prices and capital investment seem to have little influence on the production costs, while operating costs and electricity prices seem to have virtually no influence on the final result. The sensitivity analyses for the other scenarios draw the same conclusions. Another sensitivity analysis was also conducted for the fifth scenario, to show that the influence of the palm oil price and its fluctuation is great enough to make such an import-based scenario highly volatile.

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2.50 Inflation 2.00 Feedstock cost Electricity price 1.50 Capital investment Operation costs 1.00 Presscake price Glycerine price

Biofuel production costs (USD/l) costs production Biofuel 0.50

0.00 -80% -60% -40% -20% 0% 20% 40% 60% 80% Variation (%)

Fig. 57: Scenario 1 – Sensitivity analysis

103

Technical- economic Analysis

1,80

1,60

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0,00 -80% -60% -40% -20% 0% 20% 40% 60% 80% Variation (%)

Fig. 58: Scenario 5 – Sensitivity analysis

104

Impact Analysis

V. Impact Analysis

V.1 Environmental impacts (by German Biomass Research Centre)

This chapter summarises and discusses the possible environmental impacts of biofuel production and consumption in the context of Rwanda's framework conditions. The analysis is based on data taken from available literature. Different tools are used to investigate the environmental sustainability and environmental impacts of biofuel production. The environmental impacts of a product or service are often analysed using a life cycle assessment (LCA). In a LCA, all the inputs and outputs at each production step (cultivation of the biomass, biofuel processing and use) are inventoried and compared with a reference system (Fig. 59). In the case of liquid biofuel production, the environmental impacts are compared with the impacts of producing and consuming fossil fuels.

- possible land - Fertiliser, - Electricity, use change effects - Diesel, - Natural gas, - Pesticides, - auxiliary materials, -etc. -etc.

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Environmental Impacts (e.g. GHG emissions, acidification, eutrophication, etc.)

Fig. 59: Environmental impacts of the biofuel production chain

The impact categories which will be examined here are:

impacts on global climate

land use impacts: o impacts on soils o impacts on water o impacts on biodiversity 105

Impact Analysis

impacts on local air quality.

V.1.1 Impacts on global climate The potential to save GHG emissions by using biofuels in the transport sector is one of the main drivers for the promotion of biofuels. It is also one of Rwanda's environmental targets to reduce GHG emissions and establish a 'green' transport sector. The fact that biomass is basically CO2-neutral does not mean, however, that the production and consumption of biofuels will necessarily result in GHG savings. The GHG balance is determined by the cultivation and conversion of biomass to biofuels, as well as the uses of biofuels and the amount of fossil fuel that is substituted. Life cycle assessments have shown that the effects of land use change have the biggest influence on the GHG balance. Land use change means converting one type of land to another. When natural habitats (rainforests, savannahs, grasslands etc.) are converted into energy crop plantations, it can result in the release of stored carbon and nitrogen from soils, and the loss of former biomass. It is also possible that additional carbon is sequestered when deforested or marginal sites are re-cultivated to produce biofuel feedstock.

For the different biofuel production systems considered in this study, it is probable that no negative effects will occur due to land use change: in Scenarios 1–4, either marginal land is used, or sites already being cultivated (sugarcane plantation). In the case of the jatropha plantation on marginal land, it is possible that more carbon will be sequestered in the biomass and soils than in the current situation. Regarding palm oil-derived biodiesel, no assumptions were made about the origin and the GHG balance of the imported palm oil. Thus, there is great uncertainty about the GHG balance and the land use changes that could be induced by the palm oil imports.

Beside the effects of land use change, the farming system used can significantly influence the GHG balance. Through tillage, fertiliser application and fossil fuel inputs (e.g. for machinery or fertiliser production), large quantities of GHG emissions can be released and negatively influence the GHG balance. Under Rwandan conditions it can be expected that only low inputs of machinery, fossil fuels and fertilisers are used. jatropha plantations or jatropha as living fences are assumed to be low input systems. For sugarcane and palm oil plantations, more intensive farming systems should be expected, which are associated with higher releases of GHG emissions.

Furthermore, the method of production, especially the kind of energy used in the production process, has a significant impact on the GHG balance. GHG emissions from the transport and distribution of biofuels normally have a very low impact on the overall balance. The use of the fuels (combustion) can be considered as carbon-neutral.

The amount of GHG savings also depends on the reference system selected. GHG emissions from fossil diesel and gasoline are between 80 g and 85 g_CO2-eq/MJ. If no land use change occurs and the production method fits 'good practice', it can be expected that the GHG savings for the selected feedstocks, jatropha, palm oil and sugarcane, will be as high as 80 % (Fig. 60). Biofuels derived from palm oil and sugarcane normally bring the highest emissions savings due to their high yields per ha. Regarding the conditions in Rwanda (expecting no land use change, use of marginal land and low inputs) it can be assumed that the potential for GHG savings in the transport sector is high. However, it depends on the method of production used.

106

Impact Analysis

Fig. 60: GHG emissions for selected biofuels /86/

V.1.2 Land use impacts Among the greatest risks posed by biofuel production are the impact it has on the land used for feedstock production, and the possible (negative) impacts on biodiversity, soils and water quality. The reference system used to evaluate these impacts on the land is the contrasting environmental cost of fossil oil exploration and extraction, which can cause great damage to the landscape. However, the impacts are difficult to estimate and to compare quantitatively, and they are often not considered in life cycle assessments.

The extent of land occupation – how great an area is used for the production of energy crops – is important when assessing environmental trade-offs, especially when land is as scarce as it is in Rwanda. Domestic feedstock is assumed to be produced on a relatively small scale, which means the impacts on land also occur on a small scale. Scenario 5 corresponds to the use of approx. 12,000 ha outside the country (probably in Malaysia or Indonesia). The scale of land occupation in Scenarios 2 and 3 cannot be compared, because the involve integrated systems (farming systems in rows). In Scenario 1, it is assumed that 10,000 ha of marginal land are required for feedstock production. Scenario 4 assumes the use of 2,000 ha of fertile soils.

Another important aspect of the impact assessment is the way in which land use change not only influences the GHG balance, but also the soil functions, water balance and biodiversity. This depends on a variety of factors, for example the type of feedstock and the farming system used (extensive or intensive). However, the impacts are strongly dependent on the specific conditions of each site; they are therefore difficult to estimate unless these are known.

V.1.3 Impacts on soils One of the main environmental problems in Rwanda is the 'degradation of soil due to the loss of vegetation cover, overexploitation and inappropriate agricultural systems, lack of anti-erosion measures, etc.' /22/.

107

Impact Analysis

Biofuel production creates the risk of reducing soil productivity through intensive crop production systems. However, it can also improve the soil quality if sustainable farming systems are applied. Erosion, nutrient depletion and contamination are the main soil-related risks associated with the cultivation of energy crops.

Erosion of soils is one of the big environmental challenges for Rwanda, due to natural conditions (hilly topography) and anthropogenic factors (intensive agriculture). Wind and water erosion causes the loss of organic matter and nutrients and the long-term decline of soil fertility. Jatropha planted to form anti-erosion structures could help to preserve soils. No assessments of the impacts of jatropha on soils have been executed so far, but it has been observed to improve soil structure and is strongly believed to control and prevent soil erosion. A consequence of erosion is the degradation of soils. Jatropha planted on marginal soils could support land reclamation and help to improve the soil quality. Regarding the choice of feedstock, perennial plants (e.g. moringa or castor) have a general propensity to improve soil quality (if they substitute annual plants or are grown on marginal land).

The high intensity of cultivation is expected to become the main cause of negative impacts on soils: the risk of erosion (loss of organic matter and nutrients) through intensive tillage, and the risks of acidification and eutrophication of soils (and surface water) through the use of nitrogen fertilisers. The use of machinery and the use of (mineral) fertiliser are assumed to be limited in Rwanda, except in Scenarios 4 and 5 (sugarcane and palm oil plantations). It is important to note that no one has yet investigated the long-term impacts of the toxicity of the jatropha plant on the biological life of soils /55/.

Through sustainable soil conservation practices that allow for specific site conditions, the environmental impacts of biofuel production on soils can be reduced significantly.

V.1.4 Impacts on water Biofuel production can have significant impacts on water quality and availability. Biomass production and its conversion to biofuels may contaminate water and lead to high water consumption. Agriculture in general is responsible for the consumption of 90 % of water resources in developing countries /103/. Energy crop cultivation might also create strong demand for water and threaten to deplete freshwater resources. Therefore, the environmental conditions must be investigated properly, and feedstock and irrigation systems carefully selected.

The risks of water contamination (run-off of agro-chemical inputs into the groundwater, and eutrophication and acidification due to fertiliser use) exist in the same way for any other crops if they are cultivated intensively.

In addition to the farming system, the technology used is a very important factor in the environmental costs of biofuel production. Processing and refining can reduce the quality and availability of local water sources. During the refinement of biofuels, large quantities of water are needed for different operations, for example to wash plants and seeds and for the conversion process. Sugar mills and ethanol plants require substantial amounts of water for processing and evaporative cooling. Besides the efficiency of water use, it is essential that wastewater is treated: ethanol processing can result in large volumes of nutrient-rich wastewater that can negatively affect local rivers through eutrophication. By choosing suitable feedstock and water-efficient technologies, and by recycling the wastewater adequately, it is possible to reduce the impacts of biofuel production on water.

V.1.5 Impacts onbiodiversity Again, biofuels production can affect biodiversity in two ways:

the decline in biodiversity due to biomass cultivation on sites that were formerly biodiversity hotspots

108

Impact Analysis

enhancement of biodiversity through cultivation on non-biodiversity hotspots.

The impacts on local biodiversity depend on what land use system is being replaced as well as the subsequent use of the land. If the amount of land under cultivation is expanded and natural ecosystems are converted, it can result in the loss of species and habitats and the loss of ecosystem functions. However, biofuel production also has the potential to increase biodiversity.

The scenarios do not reflect land use change in formerly natural habitats as they look instead at land that was previously marginal (Scenario 1) or land that is already under cultivation (sugarcane plantations). Using jatropha (or other feedstock) on marginal land can potentially help restore the local biodiversity. In the palm oil scenario it remains unclear what kind of land use change has taken place, but the impacts on biodiversity can be especially negative if rainforests are cleared for energy crop cultivation.

Cultivation of energy crops in intensive monocultures can have strong negative impacts on local biodiversity. This is probably the case with palm oil and sugarcane plantations, whereas the cultivation of jatropha or other energy crops as living fences or in intercropping agroforestry systems will probably not have significant impacts on local biodiversity.

V.1.6 Impacts on local air quality The main source of local and regional air pollution will be the combustion of biofuels. The amount of exhaust emissions resulting from the use of biodiesel or bioethanol depends on the specific fuel (feedstock and blend), the vehicle technology, the way engines are tuned, and the driving cycle. The majority of studies conclude that, compared to petroleum fuels, using biofuels can significantly reduce most pollutants. Emissions of CO, hydrocarbons, SO2, particulate matter and other toxic compounds from biofuels are generally lower than those from fossil fuels. Thus, the use of biofuels can significantly reduce local and regional air pollution, acid deposition and associated health problems. However, studies also agree that biofuels emit larger amounts of nitrogen oxides than do fossil fuels, due to their higher oxygen content. The benefits of biofuels for air quality compared to conventional fuels will depend on the development of fuel quality standards.

In addition to vehicle exhaust emissions, emissions can also occur locally in biofuel plants. Possible emissions into the air by biofuel refineries include nitrogen oxides (NOx), sulphur oxides (SOx), volatile organic compounds (VOCs), carbon monoxide (CO), particulate matter and other pollutants which affect air quality and threaten human health. However, with appropriate pollution-control technologies it is possible to reduce such emissions significantly.

V.1.7 Conclusion From an environmental point of view, the use of biofuels should have a less negative impact than the use of the fossil alternatives; they can be used to pursue more sustainable development. In the different impact categories, biofuel has the potential to bring positive environmental impacts (GHG savings, emissions reduction). However, with some other areas, adverse effects could occur (impacts on soils or water). The selection of suitable feedstock, avoiding adverse land use changes, using sustainable farming practices to maintain long-term soil productivity and the availability of water: these are the keys to minimising negative environmental impacts.

V.2 Social impacts (by Julia Sievers, GZ, Sector Project 'Agricultural Policy and Food Security', Division 45 - Agriculture, fisheries and food)

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Impact Analysis

This analysis of the potential social impacts of liquid biofuel production in Rwanda focuses on the impacts assessed in the food security analysis. Although social impacts imply more than the impacts on food security, other factors have not been analysed as a comprehensive analysis would require more time and resources.

When looking at the potential impacts, it is important to differentiate between the different scenarios and the extent of biofuel production – especially the amount of land which is needed for the cultivation of energy plants. The following table provides an overview of the potential positive and negative impacts on the different dimensions of food security. Positive impacts are signalled as a 'plus', negative impacts as a 'minus'. It should be stressed that only approximations can be provided in this context. The real impact and the scope of the impact depend on various factors which cannot generally be assessed reliably.

Food Security Scenario 1 Scenario 2 Scenario 3 Scenario 4 Scenario 5 Dimension Availability - - - - - Access - -/+ -/+ - - Utilisation - - + - - Stability - - - - - '-' = Potential negative impacts/risks; '+' = Potential positive impacts/opportunities

Scenario 1: Jatropha production on marginal land for the transport sector: 10,000 ha Potential negative impacts and risks exist as jatropha production would compete with other uses of marginal land which are important for food security (food crop production, pasture, collecting wood for cooking). The extent of these potential negative impacts depends on the particular areas chosen and their relative importance for food security.

No positive impacts or opportunities are assumed to exist due to the lack of profitability of jatropha production on marginal land (see agricultural system analysis). It should be considered that the impacts on food security would increase if more land was used for jatropha production.

Scenario 2: Jatropha production for the transport sector, as fences, alongside roads, as hedges and in the Akagera Belt Possible positive impacts are seen if the crop is cultivated as fences or alongside roads. There is a potential for the rural population to earn additional income. Planting energy plants (e.g. jatropha) in the Akagera belt seems to be more critical as there are competing uses which are important for food security, especially the use of the land as pasture.13

Scenario 3: Jatropha production in fences, alongside roads, as hedges, around the Akagera Belt for rural electrification Potential positive impacts can occur if energy plants are planted in fences or alongside roads. There is a potential of additional income for the rural population and improved rural energy supply. Planting energy plants (e.g. jatropha) around the Akagera Belt seems to be more critical due to competing uses which are important for food security, especially use of the land as pasture.

13 Statements by Rwandan interviewees. Authors' research (August, 2007) 110

Impact Analysis

Scenario 4: Sugarcane production for ethanol production for the transport Sector No positive impacts on food security can be assumed here. Negative impacts are likely as sugarcane cultivation to produce ethanol would require the use of productive land; it therefore represents competition to food production. The extent of the negative impacts would depend on the amount of land used for sugarcane cultivation, and also the amount of sugarcane which is used for ethanol production.

Scenario 5: Use of imported palm oil for biodiesel production, for the transport sector No positive impacts on food security can be assumed. Negative impacts are likely to occur, considering the already high dependency on imported oil to meet people's food needs as well as the considerable deficiencies of oil in Rwandans' food consumption (poor population groups). It can be assumed that using imported palm oil for the production of biodiesel for the transport sector would create a barrier to measures needed to increase the availability of palm oil for food, or the access to palm oil for poor population groups.

V.3 Economic impacts (by German Biomass Research Centre, Leipzig)

The primary direct impact of any biofuel scenario is its potential to be a substitute for the equivalent fossil fuel, which would lead subsequently to a reduction of imports. However, whether or not a scenario is actually beneficial from a macroeconomic point of view depends on various factors, for example, what measures the state needs to take in order to support it, what savings will accrue from the fossil fuel substitution, and what microeconomic effects will there be at the local level, such as improved access to energy, job creation, income support and subsequent regional economic growth. Some of these factors are difficult to identify or quantify. This section attempts to assess the potential to save fossil fuel imports by producing biofuels, taking three factors into account:

Savings from discontinued imports of fossil fuel

Losses from not collecting taxes on the substituted fossil fuel (e.g. import duties, VAT)

Losses from covering the price difference between biofuel production costs and the fossil fuel price, in order to render the product price-competitive with the fossil equivalent

The underlying assumptions are that fuel imports are state-controlled and that biofuels are produced domestically by various investors. It is assumed that, in an effort to support their production, these will not be taxed, unlike fossil fuels; therefore, their total costs (production and distribution) are comparable to fossil fuel end prices (the investor’s profit margin when selling the biofuel is not taken into account). It should be considered that such an assessment can only be a snapshot of the situation at a specific moment, since the volatility of fossil fuel prices, as well as vegetable oil and sugar prices, can change the economic viability of biofuel production. Therefore, any long-term conclusions should be interpreted with caution. The purpose here is merely to give an overview of the potential economic impacts from the substitution of fossil fuel imports. The overview in Table 18 shows that state intervention is necessary to support the economic viability of the different biofuel production options. This only refers to the aspects mentioned above and does not attempt to conduct a detailed macroeconomic analysis.

In Scenario 1 biodiesel production costs would be USD 2.05 /lfos. eq. – USD 0.67 /l above the end consumer price of diesel fuel. Assuming constant fuel prices, the state would have to pay USD 0.85 million p.a. in subsidies and waive USD 0.76 million p.a. in tax revenues, which represents a burden of USD 1.61 million p.a. for the fiscal budget. Savings for the Rwandan economy from discontinued fossil fuel imports would be USD 0.83 million p.a., which would stay within the local economy instead of flowing to the oil exporting country. Thus, the macroeconomic deficit for this scenario is around USD 0.78 million p.a., not counting the potential 111

Impact Analysis local benefits, such as job opportunities, local product demand and income generation. As there is no data for the input-output structure of the Rwandan economy, no input-output analysis can be undertaken. Therefore, the indirect macroeconomic effects of biodiesel production could not be quantified for this scenario, or for the others. The fiscal deficit could also be reduced by not covering the price difference between biodiesel and fossil diesel. As biodiesel would be used in a blend with diesel, prices for diesel fuel (or more precisely B2) would increase slightly from USD 1.38 /l to USD 1.39 /l for the end consumer, if the biodiesel share is untaxed.

In Scenario 2, biodiesel production costs would be USD 2.02 /lfos. eq, which is USD 0.64 /l more expensive than the fossil diesel price. Subsidies would amount to USD 17.7 million p.a. and tax waivers would be USD 16.6 million p.a. Savings would add up to 18.1 million p.a., leaving a deficit of USD 16.2 million p.a. If the price difference were not compensated by the state, the B50 blend would cost USD 1.61 /l instead of the current diesel price of USD 1.38 /l. In Scenario 3, the high costs of electricity production (USD 0.55 /kWh) means state intervention is necessary to the tune of USD 1.82 million p.a. Subsidies to cover the difference in price amount to approx. USD 2.41 million p.a. In the absence of more reliable data, the import price of electricity is assumed to be 70 % of the final residential price (USD 0.15 /kWh). According to this assumption, tax waivers amount to USD 0.45 million p.a. and import savings to USD 1.04 million p.a. From the fuel input point of view, the use of jatropha oil can substitute the use of diesel for rural electrification. Depending on the taxation options for diesel use (see Scenario 3 in Chapter IV.3.3), the financial intervention required ranges from USD 1.80 million p.a. for untaxed diesel, to USD 0.31 million p.a. for diesel taxed at the same rate as transport fuel.

In Scenario 4, bioethanol production costs would amount to USD 1.86 /lfos. eq, or USD 0.48 /l more than the current gasoline price. Tax waivers amount to USD 6.42 million p.a. and subsidies required to cover the difference in price amount to USD 6.1 million p.a. Savings from discontinued gasoline imports would amount to USD 4.94 million p.a. However, these savings would not flow entirely to the local economy since Rwanda would still need to import sugar to compensate for the shift from sugar to ethanol production. The E12 blend would in this case cost USD 1.36 /l, slightly lower than the gasoline price. In Scenario 5, biodiesel production costs from imported palm oil would amount to USD 1.19 /l – USD 0.19 /l cheaper that the current fossil diesel price. Thus, without the need for subsidies, the state would waive fiscal revenues of about USD 32.94 million p.a. Fossil diesel imports (USD 35.92 million p.a.) could be substituted, leaving a final positive balance of USD 2.99 million p.a., but it should be remembered that these savings would not flow entirely to the local economy as Rwanda would still have to import the palm oil. Furthermore, imports of a product depend highly on its availability as well as the economic and political stability in the country of origin. Therefore, it may be subject to substantial fluctuations, and scenarios involving a lot of imports are relatively volatile. It goes without saying that for countries like Rwanda, where economic resources are limited, state intervention should be examined carefully before it starts. That being said, state support can take place in a number of ways. Examples include the exemption of taxes for biofuel products (already mentioned), support for farmers through loans for machinery to decentralise the cultivation of jatropha, direct subsidies per litre of biofuel or kWh energy, the exemption of import duties for palm oil, blending mandates for the biofuel product (already mentioned) and others. It is not possible to determine the most effective forms of intervention before the actual production begins. It remains true, nevertheless, that the final decision depends primarily on whether the state can afford such an expenditure and on the parts of the value chain that need most support (local farmers, fuel distributors, etc.). The fact that intervention is probably necessary does not necessarily rule out a specific scenario. Whether such an intervention could bring long-term profits to the country would depend on its effects along the entire value chain. For example, decentralised cultivation, harvesting, collection and transport of jatropha, as in Scenarios 2 and 3, could create new job opportunities for the local population and result in additional income flowing into 112

Impact Analysis the local community. On the other hand, according to the agricultural system analysis the cultivation of marginal lands, as in Scenario 1, shows no profitability, except for eucalyptus (Chapter III.1). Increasing the access to energy, as in Scenario 3, results in a better quality of life and more opportunities for households and industries, which in turn results in regional growth. All these factors should be taken into consideration when trying to determine whether state support would bring long term benefits to the national economy and to the local population.

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Impact Analysis

Table 18: Potential import savings from the different scenarios analysed

Unit Remark Scenario 1 Scenario 2 Scenario 4 Scenario 5 Scenario 3** A B

Biofuel amount, A million lBF p.a. 1.26 27.61 12.66 54.84 7,100 MWhel 1.94 (oil)

Fossil equivalence, B lfos/lBF 0.91 0.91 0.65 0.91 - 0.96

Fossil equivalent, C million lfos. eq.p.a. = A*B 1.15 25.12 82.28 49.90 - 1.87 Biofuel production & distribution costs, D USD/l 1.87 1.84 1.21 1.08 USD 0.55 /kWh USD 0.55/kWh

Biofuel production costs, E USD/lfos. eq. = D/B 2.05 2.02 1.86 1.19 - -

Fossil imports (total), F million l p.a. 95.94 95.94 66.20 95.94 69,340 MWhel 95.94 Fossil imports (transport sector), G million l p.a. 49.89 49.89 66.20 49.89 - - Substitution (total imports), H % = C/F 1.20 26.18 12.43 52.02 10.24 1.95 Substitution (transport sector), I % = C/G 2.30 50.35 12.43 100 - - Fossil import price (excl. duties, tax), J USD/l 0.72 0.72 0.60 0.72 0.15 0.72 Fossil final price (incl. tax), K USD/l 1.38 1.38 1.38 1.38 USD 0.21 /kWh 0.28//0.34//0.49 *** Fossil import expenses, L USD million p.a. 69.08 69.08 39.72 69.08 10.19 69.08 Difference fossil/bio, M USD/l = E-K +0.67 +0.64 0.48 -0.19 +0.34 +0.27//+0.19//+0.06 Savings Discontinued fossil fuel imports, N USD million p.a. = H*L 0.83 18.09 4.94 35.92 1.04 1.34 Tax losses from discontinued fossil fuel imports, O USD million p.a. = (K-J)*C -0.76 -16.58 -6.42 -32.94 -0.45 -1.23 Covering the difference fossil/bio, P * USD million p.a. -M*A -0.85 -17.72 -6.10 0 -2.41 -1.92//-1.49//-0.43 Total -0.78 -16.21 -7.58 2.99 -1.82 -1.80//-1.38//-0.31 * Only if higher than the fossil price. Otherwise the expenses to cover the difference are considered equal to zero. ** A: comparison with imported electricity, B: comparison with electricity from diesel *** Production costs depending on the taxation of diesel (see Scenario 3)

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Conclusions

VI. Conclusions

The agricultural system analysis showed that despite current efforts by the Rwandan Government to improve agricultural production, current farming systems would not be profitable for the cultivation of plants such as castor, jatropha, moringa or sunflowers as the potential feedstock for biofuel production. Only bioethanol production from cassava and sugarcane, or the use of eucalyptus plantations for woodfuel would be profitable at present. Eucalyptus is actually the only profitable crop for use on marginal land. Moringa and jatropha would be profitable in intensified cropping systems, while castor would remain unprofitable. However, Rwanda still has to go a long way to achieve agricultural intensification. The adoption and application of modern production techniques needs to be accompanied by social and economic measures. The effective participation of farmers, especially in the current processes of crop regionalisation and land use consolidation, remains an indispensable condition for the social and economic sustainability of agricultural development. Considering that the area under cultivation for food crops was only 0.08 ha per capita in 2008, it is difficult to find available land for new cropping systems. Integrated farming systems could be an option for Rwanda to produce biofuel crops without using any additional agricultural land. Energy crops such as jatropha, castor and moringa can be produced without compromising food production. Indeed, they could even help to protect soil against erosion and crops against damage caused by animals.

The GAPP and GIS based potentials analysis revealed that no surplus land is available for energy crop cultivation at the moment, and that this is likely to remain the case in the future. This is due to the increasing food consumption and population growth, and the limited potential to extend the agricultural area. Increased productivity could help to meet the future food demand. Assuming that at least moderate increases in productivity (one per cent annually) are realised, the demand for additional areas to cultivate staple crops would fall slightly, but still remain high.

There could be potential to produce 25,000 t p.a. of vegetable oil from integrated systems for biofuel production. However, accessing this potential is uncertain. The potential on marginal land is currently not quantifiable, but assuming that three per cent of the existing agricultural land is classified as marginal, the potential is low. The possible yield (c. 6,000 t p.a.) is low and the accessibility doubtful.

This study therefore concludes that the cultivation of energy crops in plantations on marginal land is not an option for Rwanda. For jatropha cultivated in integrated systems or grown on marginal land, the potential can only be tapped if the following key questions are answered:

Is jatropha accepted as a crop?

What is the yield of jatropha if cultivated on marginal land? (recommendation for field trials)

(If specific sites are selected) Are there definitely no uses that compete with jatropha cultivation?

The food security analysis showed that the cultivation of energy crops in plantations on marginal land is no option for Rwanda, as there are serious challenges facing current and future food security. Problems exist not only with the availability of food, but with other dimensions of food security too. Special consideration has to be given to problems of access to food, which in Rwanda is strongly linked to the lack of access to land. Land scarcity, the unequal distribution of land, and the insecurity of farmers' land usage and ownership rights place major constraints on energy crop cultivation, as this would compete with land uses that are important for food security (food cropping, grazing and wood fuel production). If farmers lose their rights to use land to make way for energy crop plantations, the loss could hardly be compensated as there is a lack of alternative income and employment opportunities within and outside agriculture. There is no potential to increase the incomes of small- 115

Conclusions scale farmers if they switch from food crop growing to energy plant production because these plants (e.g. jatropha) are less profitable than most food crops. While energy crop plantations would severely threaten food security, under certain conditions small-scale energy crop production in integrated farming systems could provide benefits for food security. From a food security perspective, importing palm oil for biofuel production is not recommended as Rwanda already suffers from a lack of access to oils and a related deficiency of lipids in the national nutrition. In general, a cautious approach (according to the precautionary principle) to biofuel policies is necessary, especially considering the risks that affect the stability of food security (e.g. unforeseeable impacts of climate change, unstable weather conditions, food import problems due to high and volatile prices). In brief, food security issues must be considered when making policy decisions related to biofuels – and this also has a human rights dimension. Since Rwanda has ratified the International Covenant on Economic, Social and Cultural Rights, the state is obliged to respect, protect and fulfil the right to adequate food.

The technical-economic analysis revealed that liquid biofuel production in Rwanda is not economically feasible under the current conditions. Biodiesel based on jatropha would incur production costs (including distribution) of USD 2.05 /lfos. .eq and USD 2.02 /lfos. .eq. respectively, for a small facility (1,000 t p.a. – Scenario 1) and a medium sized one (25,000 t p.a. – Scenario 2). This would be considerably above the current fossil diesel price of USD 1.38 /l (incl. taxes). The use of jatropha oil for rural electrification (Scenario 3) would involve electricity production costs of USD 0.55 /kWh, considerably higher than the current electricity reference price of USD 0.21 /kWh, and also more than the production costs if diesel were used as fuel instead of jatropha oil (USD 0.49 /kWh with taxed diesel; USD 0.28 /kWh with untaxed diesel).

Bioethanol produced from sugarcane in a 10,000 t p.a. facility (Scenario 4) would cost USD 1.86 /l lfos. eq. and would also require subsidies to make it competitive with the price of fossil gasoline (USD 1.38 /l, incl. taxes). The production of biodiesel based on imported palm oil in a large scale plant (48,000 t p.a., Scenario 5) would result in production costs of USD 1.19 /lfos. eq., which makes it the most competitive option. However, as palm oil is a commodity, world market prices are very volatile and the economical viability may fall drastically when prices increase. The sensitivity analysis showed that consumption-related costs play the biggest part in overall production costs (about 90 %), so developments in feedstock costs and prices should be carefully assessed before any decisions are made about promoting their cultivation or importation, or about biofuel production in general.

The assessment of environmental impacts showed that for Scenarios 1–4 no adverse effects will occur due to land use changes, as these use either marginal land or sites already under cultivation (sugarcane plantation) for the cultivation of energy crops. For palm oil-derived biodiesel (Scenario 5), there is great uncertainty about possible land use changes, as the palm oil has to be imported. Under Rwandan conditions, GHG releases can be expected to be low for jatropha as there will be low inputs of machinery, fossil fuels and fertilisers. For sugarcane and palm oil plantations the farming systems can be expected to be more intensive and therefore associated with greater releases of GHG emissions. With regard to the overall GHG balance, palm oil and sugarcane derived biofuels normally bring high emission savings due to their high yields per ha, whereas there is no valid data for jatropha biodiesel. Impacts on soil caused by the use of machinery and (mineral) fertiliser are assumed to be limited in Rwanda, except in Scenarios 4 and 5 (sugarcane and palm oil plantations). Impacts on biodiversity from growing jatropha or other energy crops as living fences or as part of intercropping, agroforestry systems would be low, while monocultures (palm oil, sugarcane) could have strongly negative impacts on local biodiversity.

The social impact assessment only looked at the impacts on food security; other social impacts were not analysed. In terms of food security, the assumed negative impacts of biofuel production clearly outweigh the positive impacts, in all the scenarios used. Impacts differ between different scenarios: for Scenarios 1, 4 and 5, only negative effects on food security can be detected. In Scenarios 2 and 3, under certain conditions, positive impacts might be felt in the access dimension of food security, although this would be accompanied by negative 116

Conclusions impacts in other areas (except for the potentially positive impacts on the utilisation dimension of food security observed in Scenario 3). How strong these impacts are would depend on the extent of the land used for energy plant cultivation, and on the degree of competition for its use in a specific place. The larger the area of land used for growing energy plants, and the more intensively this land was previously used for food security relevant purposes, the greater will be the negative impact on food security. Therefore the real impact on food security cannot be assessed using the information provided in the scenarios.

The economic assessment looked at potential savings from the substitution, and reduction in imports of fossil fuels. Three factors were taken into account: savings made by ceasing to import the substituted fossil fuel; losses of tax revenue incurred by substituting the fossil fuel (e.g. import duties, VAT); and losses incurred by subsidising the price difference between biofuel production costs and the fossil fuel price, which is necessary to make the new product price-competitive with the fossil equivalent. With that in mind, it seems that all the scenarios would require some economic intervention. Scenario 5 is an exception. However, any savings made here will not flow into the local economy as the scenario is based on imports, and the dependency on fossil fuel imports will be shifted to a dependency on palm oil imports. Given also that palm oil prices fluctuate considerably, this scenario is considered rather volatile and it is unsafe to draw conclusions about its potential savings. Thus, it can be concluded that liquid biofuel production would require substantial financial support from the public budget. A detailed assessment of the value adding effects in the Rwandan economy would require further evaluation of factors such as job creation and income generation. Although such a macroeconomic assessment could not be undertaken for this study, it seems unlikely that any such benefits would outweigh the necessary spending on subsidies and the lost tax revenues. This is because they would be concentrated in the area of feedstock production, and the profitability of the energy crops being considered for liquid biofuel production was shown by the agricultural analysis to be very low or even negative.

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List of figures

Fig. 1: Structure of the study...... 13 Fig. 2: Overview of biofuels pathways (Current or 'first generation' feedstock and biofuels are marked in red) ...... 14 Fig. 3: Altitude and rainfall in Rwanda...... 15 Fig. 4: Land use in Rwanda, own illustration according to FAO data ...... 16 Fig. 5: Land use in Rwanda 2007 (source: FAO)...... 17 Fig. 6: Development of agricultural land in Rwanda 1990-2007 (source: FAO)...... 18 Fig. 7: Gini coefficient of land distribution in Rwanda, own illustration according to MINAGRI statistics and /26/ ...... 20 Fig. 8: Development of population numbers in Rwanda from 1950- 2030, own illustration according to /29/ ...... 21 Fig. 9: Population density per sector (2006), own illustration according to /28/ ...... 22 Fig. 10: Distribution of main crops and trees by cultivated area, 2008; own illustration according to /73/ ...... 23 Fig. 11: Productivity of some food crops in the past and in the present, own illustration according to /73/, /76/ ...... 24 Fig. 12: Land use consolidation inan inland valley in the District Muhanga, Southern Province ...... 25 Fig. 13: Percentage of food insecure household (FCS: food consumption score) in food economy zones. Figure taken from /37/ ...... 27 Fig. 14: Primary energy balance, own illustration according to /38/, /39/ ...... 29 Fig. 15: Development of cultivated area in Rwanda: 1990-2007, own illustration according to /45/ ...... 35 Fig. 16: Net operating income of the current farming systems in Rwanda, own calculations and illustration ...... 38 Fig. 17: Net operating income of intensified farming systems in Rwanda, own calculations and illustration ...... 39 Fig. 18: Crop yield at break even point in intensified cropping systems ...... 40 Fig. 19: Important factors to achieve a sustainable agriculture intensification in Rwanda, own illustration ...... 41 Fig. 20: Net operating income of farming systems on marginal lands in Rwanda, own calculations and illustration ...... 42 Fig. 21: jatropha field in inland valleys (good fertile soils) instead of on marginal land in the Southern Province ...... 44 Fig. 22: Drivers for energy crop potential ...... 52 Fig. 23: Potential of agricultural areas in Rwanda ...... 55 Fig. 24: Suitability map of jatropha curcas in Rwanda ...... 57 Fig. 25: jatropha potential in integrated systems ...... 58 Fig. 26: Distribution of the potential in selected areas ...... 59 Fig. 27: Food security dimensions and related aspects, own illustration ...... 63 Fig. 28: Calorie availability per capita/ day in Rwanda: 2000-2008 /73/ ...... 67 Fig. 29: Protein and lipid supply per capita /73/ ...... 68 Fig. 30: Production: Seasonal availability (HH: household) /74/ ...... 69 Fig 31: Agricultural production per capita of main food crops in 1998 A and 2009 A, own illustration based on statistics from MINAGRI ...... 69 Fig 32: Soil productivity of main food crops in 1998 A and 2009 A, own illustration according to statistics from MINAGRI ...... 70 Fig. 33: Share of calorie supply of main food crops in Rwanda, agricultural statistics from MINAGRI 2009 A, own illustration ...... 71 Fig. 34: Net export of some commodities, own illustration according to FAOSTAT...... 72 Fig. 35: Share of imports in total consumption (FAOSTAT) ...... 72 Fig. 36: Land scarcity in Rwanda, own illustration, according to MINAGRI statistics and /26//80/ ...... 74 Fig. 37: Geographic distribution of access profiles /31/ ...... 75 Fig. 38: Geographic distribution of wealth quintiles (% of households) according to /74/ ...... 76 Fig. 39: Calorie production per farm size class in 2009 A, own illustration, according to MINAGRI statistics and /80/ ...... 77 Fig. 40: System boundaries ...... 86 Fig. 41: Technical analysis approach ...... 87 Fig. 42: Annuity method approach ...... 91 Fig. 43: Scenario 1 - Process flow sheet ...... 93 Fig. 44: Scenario 1 – Biodiesel production costs ...... 94 Fig. 45: Biodiesel production costs for different oil seeds ...... 94 Fig. 46: Scenario 2 – Process flow sheet ...... 95 Fig. 47: Scenario 2 – Biodiesel production costs ...... 96 Fig. 48: Scenario 3 – Process flow sheet ...... 97 Fig. 49: Scenario 3 – Electricity production costs ...... 97 Fig. 50: Electricity production costs in other regions ...... 98 Fig. 51: Electricity production from diesel and jatropha oil ...... 98 Fig. 52: Scenario 4 – Process flow sheet ...... 99 Fig. 53: Scenario 4 – Bioethanol production costs ...... 99 Fig. 54: Scenario 5 – Process flow sheet ...... 100 Fig. 55: Scenario 5 – Biodiesel production costs ...... 100 Fig. 56: Overview of production costs ...... 102 Fig. 57: Scenario 1 – Sensitivity analysis ...... 103 118

Fig. 58: Scenario 5 – Sensitivity analysis ...... 104 Fig. 59: Environmental impacts of the biofuel production chain ...... 105 Fig. 60: GHG emissions for selected biofuels /86/ ...... 107

List of tables

Table 1: Agro-ecological zones of Rwanda and selected characteristics /16/ ...... 15 Table 2: Average annual growth rates 2008-2020 ( /23/) ...... 30 Table 3: Gasoline and diesel: imports and consumption /41/ ...... 31 Table 4: Registered vehicle fleet /39/ ...... 31 Table 5: Calculations of contribution margin and net operating income ...... 34 Table 6: Development of production and productivity for some of the main food crops in Rwanda ...... 37 Table 7: Development of the main input parameters of the GAPP model, based on FAO data ...... 54 Table 8: Development of potential agricultural area in the different scenarios (negative values mean that additional land is required, positive values mean that surplus land becomes available) ...... 55 Table 9: Selected areas and recoverability factors for integrated jatropha cultivation ...... 58 Table 10: Potential yields on marginal land according to different literature sources ...... 60 Table 11: Biofuel potential on marginal land ...... 61 Table 12: Key questions for a biofuel analysis, from a food security perspective ...... 66 Table 13: Diesel standards and biodiesel properties...... 89 Table 14: Gasoline standards and ethanol blend properties ...... 90 Table 15: Economic parameters ...... 92 Table 16: List of prices for feedstock, auxiliary materials and by-products ...... 92 Table 17: Overview of scenarios ...... 101 Table 18: Potential import savings from the different scenarios analysed ...... 114 Table 19: Example of calculations: production costs, income, contribution margin, net operating income of intensified maize ...... 125 Table 20: Example of calculations: production costs, income, contribution margin, net operating income of cassava in traditional farming system ...... 126 Table 21: Example of calculations: production costs, income, contribution margin, net operating income of intensified cassava ...... 127 Table 22: Example of calculations: production costs, income, contribution margin, net operating income of maize in traditional farming system ...... 128 Table 23: Example of calculations: production costs, income, contribution margin, net operating income of semi-intensified rice ...... 129 Table 24: Example of calculations: production costs, income, contribution margin, net operating income of intensified rice ...... 130 Table 25: Example of calculations: production costs, income, contribution margin, net operating income of jatropha on marginal land ... 131 Table 26: Example of calculations: production costs, income, contribution margin, net operating income of jatropha on marginal land ... 132 Table 27: Example of calculations: production costs, income, contribution margin, net operating income of jatropha on marginal land . 133 Table 28: Example of calculations: production costs, income, contribution margin, net operating income of Eucalyptus ...... 134 Table 29: Example of calculations: production costs, income, contribution margin, net operating income of intensified jatropha plantation ...... 135 Table 30 : Example of calculation: Cross margin calculation (Business as usual) ...... 136 Table 31: Example of calculation: Cross margin calculation (intensification) ...... 137 Table 32: Example of calculation: Cross margin calculation (soil conservation and use of marginal lands) ...... 138 Table 33: Farming systems for different crops ...... 139 Table 34: Agricultural production and food availability within farm size classes for the agricultural season 2009 A ...... 140 Table 35: Agricultural production and food availability within farm size classes for the agricultural season 2009 A (continued) ...... 141

119

References

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Annex

Table 19: Example of calculations: production costs, income, contribution margin, net operating income of intensified maize

125

Table 20: Example of calculations: production costs, income, contribution margin, net operating income of cassava in traditional farming system

126

Table 21: Example of calculations: production costs, income, contribution margin, net operating income of intensified cassava

127

Table 22: Example of calculations: production costs, income, contribution margin, net operating income of maize in traditional farming system

128

Table 23: Example of calculations: production costs, income, contribution margin, net operating income of semi-intensified rice

129

Table 24: Example of calculations: production costs, income, contribution margin, net operating income of intensified rice

130

Table 25: Example of calculations: production costs, income, contribution margin, net operating income of jatropha on marginal land (low yield)

131

Table 26: Example of calculations: production costs, income, contribution margin, net operating income of jatropha on marginal land (medium yield)

132

Table 27: Example of calculations: production costs, income, contribution margin, net operating income of jatropha on marginal land (high yield)

133

Table 28: Example of calculations: production costs, income, contribution margin, net operating income of Eucalyptus

134

Table 29: Example of calculations: production costs, income, contribution margin, net operating income of intensified jatropha plantation

135

Table 30 : Example of calculation: Cross margin calculation (Business as usual)

136

Table 31: Example of calculation: Cross margin calculation (intensification)

137

Table 32: Example of calculation: Cross margin calculation (soil conservation and use of marginal lands)

138

Table 33: Farming systems for different crops

139

Table 34: Agricultural production and food availability within farm size classes for the agricultural season 2009 A

Food crops and food Cultivated area Yield Conversion Farm size class security indicators 2009 A coefficient < 0.25 ha 0.26 - 0.50 ha 0.51 - 0.75 ha 0.76 - 1.00 ha Cultivated area Production Cultivated area Production Cultivated area Production Cultivated area Production (ha) (%) (kg/ha) (Cal/kg) (ha) (Calories) (ha) (Calories) (ha) (Calories) (ha) (Calories) Sorghum 13 551 1.7 1 233 3037.74 0.002 6 320 0.007 24 648 0.010 38 551 0.016 58 775 Maize 102 415 12.8 1 797 3225.32 0.013 73 911 0.050 288 253 0.078 450 857 0.119 687 373 Wheat 17 566 2.2 2 208 2688.07 0.002 12 982 0.009 50 629 0.013 79 189 0.020 120 731 Rice 12 422 1.5 2 911 2070.41 0.002 9 323 0.006 36 361 0.009 56 872 0.014 86 706 Cereals 145 954 18.2 0.018 102 536 0.071 399 891 0.111 625 470 0.169 953 586 Beans 179 999 22.4 1 019 3031.06 0.022 69 225 0.087 269 978 0.137 422 273 0.208 643 794 Peas 22 345 2.8 578 3221.17 0.003 5 180 0.011 20 203 0.017 31 599 0.026 48 176 Groundnuts 10 533 1.3 524 2779.86 0.001 1 910 0.005 7 451 0.008 11 654 0.012 17 767 Soybeans 38 982 4.9 829 3669.50 0.005 14 766 0.019 57 586 0.030 90 070 0.045 137 320 Pulses, oilseeds 251 859 31.4 0.031 91 081 0.122 355 217 0.191 555 596 0.292 847 056 Irish potatoes 69 352 8.6 6 533 574.40 0.009 32 405 0.034 126 379 0.053 197 670 0.080 301 366 Sweet potatoes 57 731 7.2 6 831 1080.53 0.007 53 059 0.028 206 928 0.044 323 657 0.067 493 444 Yam & Taro 17 945 2.2 4 986 855.34 0.002 9 529 0.009 37 164 0.014 58 128 0.021 88 622 Cassava 83 514 10.4 13 974 1023.07 0.010 148 666 0.041 579 796 0.063 906 860 0.097 1 382 590 Roots & tubers 228 542 28.5 0.028 243 658 0.111 950 267 0.174 1 486 315 0.265 2266 021 Bananas, plantains 176 755 22.0 8 639 338.00 0.022 64 265 0.086 250 635 0.134 392 019 0.205 597 668 Total 803 110 100.0 0.100 501 541 0.390 1 956 010 0.610 3 059 400 0.930 4 664 331 Percentage of households 41.2 18.3 9.9 14.5 Percentage of land 6.8 12.1 10.4 23.0 Mean size per household (ha) 0.10 0.39 0.61 0.93 Number of persons per household 5.5 5.5 5.5 5.5 Estimated calorie production to meet food needs (Cal/capita- 2790 2790 2790 2790 day)* Current calorie availabilty per person (Cal/capita-day) 555 2 165 3 387 5 163 Theoretical estimated minimal cultivated area to meet food 0.16 0.16 0.16 0.16 needs (ha/capita/day)** Currently available area per capita (ha/capita) 0.02 0.07 0.11 0.17 * = daily calorie needs (2100 Cal/capita/day) + daily weighted calorie stock for 2 months per year (2100 * 60/365) + daily weighted calorie-selling for 2 months (2100 * 60/365) Red: lack of household food availability/lack of household access to food Yellow: moderate lack of household food availability/moderate lack of household access to food Green: sufficient household availability of food/ sufficient household access to food

140

Table 35: Agricultural production and food availability within farm size classes for the agricultural season 2009 A (continued)

Food crops and food Cultivated area Yield Conversion Farm size class security indicators 2009 A coefficient 1.01 - 2.00 ha 2.01 - 2.00 ha > 3.01 ha Average: 0.59 ha Cultivated area Production Cultivated area Production Cultivated area Production Cultivated area Production (ha) (%) (kg/ha) (Cal/kg) (ha) (Calories) (ha) (Calories) (ha) (Calories) (ha) (Calories) Sorghum 13 551 1.7 1 233 3037.74 0.023 87 215 0.041 152 942 0.084 315 995 0.010 37 287 Maize 102 415 12.8 1 797 3225.32 0.176 1 019 973 0.309 1 788 648 0.638 3 695 553 0.075 436 075 Wheat 17 566 2.2 2 208 2688.07 0.030 179 150 0.053 314 161 0.109 649 094 0.013 76 593 Rice 12 422 1.5 2 911 2070.41 0.021 128 661 0.037 225 623 0.077 466 162 0.009 55 007 Cereals 145 954 18.2 0.251 1414 998 0.440 2481 373 0.909 5 126 804 0.107 604 963 Beans 179 999 22.4 1 019 3031.06 0.309 955 307 0.542 1 675 248 1.121 3 461 256 0.132 408 428 Peas 22 345 2.8 578 3221.17 0.038 71 487 0.067 125 361 0.139 259 010 0.016 30 563 Groundnuts 10 533 1.3 524 2779.86 0.018 26 364 0.032 46 232 0.066 95 522 0.008 11 272 Soybeans 38 982 4.9 829 3669.50 0.067 203 765 0.117 357 327 0.243 738 279 0.029 87 117 Pulses, oilseeds 251 859 31.4 0.433 1256 923 0.759 2204 169 1.568 4554 067 Irish potatoes 69 352 8.6 6 533 574.40 0.119 447 188 0.209 784 199 0.432 1 620 246 0.051 191 189 Sweet potatoes 57 731 7.2 6 831 1080.53 0.099 732 208 0.174 1 284 016 0.359 2 652 926 0.042 313 045 Yam & Taro 17 945 2.2 4 986 855.34 0.031 131 503 0.054 230 607 0.112 476 461 0.013 56 222 Cassava 83 514 10.4 13 974 1023.07 0.144 2 051 585 0.252 3 597 706 0.520 7 433 277 0.061 877 127 Roots & tubers 228 542 28.5 0.393 3362 483 0.689 5896 529 1.423 12182 911 0.168 1437 583 Bananas, plantains 176 755 22.0 8 639 338.00 0.304 886 862 0.533 1 555 221 1.100 3 213 267 0.130 379 166 Total 803 110 100.0 1.380 6 921 266 2.420 12 137 292 5.000 25 077 049 0.405 2 421 712 Percentage of households 12.2 3.1 0.8 100.0 Percentage of land 28.6 12.6 6.5 100.0 Mean size per household (ha) 1.38 2.42 5.00 0.59 Number of persons per household 5.5 5.5 5.5 5.5 Estimated calorie production to meet food needs (Cal/capita- 2790 2790 2790 2790 day)* Current calorie availabilty per person (Cal/capita-day) 7 662 13 435 27 759 2 681 Theoretical estimated minimal cultivated area to meet food 0.16 0.16 0.16 0.20 needs (ha/capita/day)** Currently available area per capita (ha/capita) 0.25 0.44 0.91 0.11 * = daily calorie needs (2100 Cal/capita/day) + daily weighted calorie stock for 2 months per year (2100 * 60/365) + daily weighted calorie-selling for 2 months (2100 * 60/365) Red: lack of household food availability/lack of household access to food Yellow: moderate lack of household food availability/moderate lack of household access to food Green: sufficient household availability of food/ sufficient household access to food

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