Biofuels sector held back by red tape - Sri Lanka

Quicknote: bioenergy economics
Here at the BioPact we analyse what's going on with green energy all over the developing world. Often, we come accross stories about the greater need for financial instruments to allow small-scale biofuel producers to play a role in the market. The science is there, the potential is there, but management structures and access to capital often lack.

The Bio-Energy Association of Sri Lanka (BEASL) points to exactly this problem, and asks for government intervention to draft a national plan to disburse loans among the small industrialists who need to invest in Bio Energy generation. At present most banks allocate loans to recognised industrialists only, who have good bank records. We do not need this type of lending system, said Mr.Jayasinghe of BEASL. Sri Lanka faces energy and financial crisis due to fuel imports. The Ceylon Electricity Board also faces financial crisis. But there is no immediate and permanent solution to overcome this problem, he said.

Maybe the Sri Lankan legistlators should look to Argentina. As we reported earlier in our quicknotes about biofuels in the Hispanic world, that country has just passed a great (albeit controversial) Biofuels bill, which tackles the problem of financing small-scale producers. Argentina's government takes a "bottom-up" approach, supporting local farmers to form associations and cooperatives; it also created a fiscal regime to stimulate smallholder's participation in the market, and it has launched a tech-transfer program to reach out to those who have difficulty in acquiring (knowledge about) the latest bio-energy technologies.



According to the available data the Bio Energy Association believes the biofuels sector could produce 50 percent of the total demand of the electricity in a reasonable time frame.

Mr.Jayasinghe said that BEASL made its fresh proposals to the government to promote bio-energy in Sri Lanka.

The government has accepted our proposal and the cabinet of Ministers also made two important decisions on bio-energy, he said. The government has accepted Gliricidia sepium, which is the preferred species of Short Rotation Coppicing (SRC) fuel wood for energy , has been declared as the Fourth National Crop in addition to Tea, Rubber and Coconut. The government made another decision and approved development tariff for power generation using wood.

Wood is a critical component of the total energy balance of many countries within Asia, being close to 70% of the total national demand for Sri Lanka and Bangladesh and 30% for India. It is relatively recently that national energy policies have seriously accepted that fuel wood-based energy production can provide an economically viable alternative to expensive oil imports as well as providing a useful source of income to farmers and commercial growers.

Sri Lanka has already embarked on a field-testing programme of the production capabilities of short-term rotation crops in a range of sites under a EU funded research programme "Sustainable Supply of Fuel wood to meet Sri Lanka's Energy Needs". Additional studies have been conducted by the Coconut Research Institute, who are interested in a more efficient use of the site through under planting with fast growing leguminous tree species both for the production of energy crops and for green manure.

The objective of our project is to make use of the Sri Lanka experience as a central plank and to bring together other researchers and workers from neighbouring countries to exchange their observations on such issues as, the production levels and economics of fast-growing trees for biomass production,

Lessons learnt in developing this activity by farmers groups and out growers,the social and developmental issues arising from the encouragement of energy plantations as a livelihood activity and the utilisation of waste agricultural material for energy production, practical and economic factors.

Land use maps in Sri Lanka show the current and potential suitability for fuel wood plantations within chena land, abandoned tea estates, grass land or other derelict land and participation with communities in strategies that are appropriate for fuel wood production in these areas, and which they endorse as their own.

According to the association, nearly 13 investors have shown their interest to enter bio-energy generation.

‘ But we have some barriers to overcome, said Mr.Jayasinghe at present the Electricity Board cannot accept additional energy due to the lack of capacity in some of their sub-stations in various areas. However in some areas, the CEB can accept electricity from the private developers, he said.

The BEASL said the CEB must overcome their problems, if the CEB wants to take additional energy into their national grid, Mr.Jayasinghe noted.

The BEASL said the promotion of bio energy would boost employment opportunities in the agricultural sector. ‘it gives additional income to the farmers , when they grow fuel wood in their fields, Mr.Jayasinghe said.

Asian Tribune.