Guidelines to regulate bio-fuel operations

Fortune, Ethiopia, JUNE 8, 2008, WUDINEH ZENEBE

Mekonnen Manyazewal, state minister for Finance and Economic Development appears to be making calculations on the feasibility of Bio-Fuel Development Strategy while Abera Deressa (PhD), state minister of Agriculture and Rural Development judiciously looks at the documents. Perplexed, Eleni G. Madhin(PhD), CEO of the Ethiopia Commodity Exchange, closely observes the two.

Ethiopia’s bio fuel sector faced a serious challenge for the first time during a forum of high level government officials held on Thursday June 5, 2008, at the Sheraton Addis. The expansion of bio fuel development in Ethiopia without a guideline is said to be at the expense of environmental and food security achievements.

The meeting’s theme, Bio Fuel, Available Alternative Source of Energy, was organized by the newly established Knowledge Sharing Forum under the UN Development Programme (UNDP).

Allegedly, Environmental Impact Assessment (EIA) has not been conducted in Ethiopia.

Nevertheless, following the rise in the global oil price, the Council of Ministers in September 2007 approved a 16-page document called the Bio Fuel Development and Utilization Strategic Plan.

According to the strategic plan, the government would focus on Jatropha, palm tree and caster seed to produce biogas, as well as on sugarcane for the production of bio ethanol.

In arid areas with less than 200mm average rainfall, a hectare of land can yield 1,000Kg of Jatropha, while in areas with more than 2,000mm, it is possible to grow 150 palm trees per hectare that can yield 5,000 - 30, 000Kg palm seeds, according to a study conducted by the Ministry of Mines and Energy (MoME).

The study states that Ethiopia has 23 million hectares of land suitable for bio fuel development and the strategic document regulates the operations.

According to the study, a litre of oil from Jatropha and caster seed can be sold for 0.45 - 0.76 dollars in Ethiopia while the price can go as high as 1.3 dollars in Germany. The study thus suggests exporting the product to Germany.

The June 5 meeting emphasized the prior steps taken towards developing bio fuel.

In a paper he presented at the meeting, Forum for Environment Coordinator, Negusie Aklilu, suggested that the Environmental Impact Assessment (EIA) should be undertaken before the bio fuel development starts. But none of the bio fuel developments in Ethiopia has undertaken EIA. An official from the Ethiopian Environmental Protection Authority (EPA) confirmed that.

Flora Eco Power, a private foreign investment engaged in bio fuel development in Ethiopia, requested EPA to undertake EIA after it started operation, the official told Fortune.

Flora Eco Power is a German company which has been engaged in the sector on the 10,000hct of land in East Hararghe area of Oromia Regional State.

The company has a registered capital of 671 million Br and produces oil from caster seed.

But the company has been under pressure from environmentalists for the land granted to it overlaps with the Babile Elephant Sanctuary.

Thus the company applied for EPA to do EIA while shifting its focus from the current location to the West Hararghe.

Negusie argues if EIA had been done before operation started, this problem would not have happened.

A further impact of bio fuel development is the increase of mono crop tendency which in turn, affects biodiversity.

Bio fuel plants used more water and wider land than other plants, Negusie warns, calling for caution while trying to expand the sector.

Assefa Admassie, director of the Ethiopian Economic Policy Research Institute with the Ethiopian Economic Association, emphasizes on the importance of a guideline for the sector development.

Ethiopia annually spends 87pc (8.6 billion Br) of its export earnings on the purchase of petroleum, causing the government to be concerned. Coupled with the anticipated increase in the demand of petroleum to meet the likely economic growth in the years to come, the concern has highlighted the importance of developing alternative energy sources.

Of the 23 million hectares of land suitable for bio fuel development across the country, about 700 thousand hectares can be used for bio ethanol development, according to the strategic plan.

The country also wants to use the carbon credit associated with the sector.

The greenhouse emission from industrialized countries has been the major source of global warming. In 1998, these countries have signed the Kiyoto Protocol for reduction in greenhouse emission by 2012. By now, 146 countries have ratified the protocol.

Developing countries are not obliged to ratify the protocol but the protocol provides them with an opportunity to sell carbon to developed nations.

Ethiopia’s strategic plan states strengthening the sector would bring more development opportunities.

Head of the Energy Regulation Department and Coordinator of Bio fuel Development with the Ministry of Mines and Energy, Melis Teka says the strategic plan is a document that can accelerate the development of the sector. A forum with representatives from stakeholder institutes and regional government has already been formed and the forum is preparing a guideline.