Biofuels offer new hope for Kenyan cane farmers
Changing trends in global sugar production and energy supply have created an urgent need for the industry in Kenya to diversify. "The sugar industry suffers heavy indebtedness, gross under-capitalisation, inefficiencies in both the field and factory processes and high production costs," said Peter Kegode, a Kenyan sugar industry and ethanol specialist and chairman of Sugar Campaign for Change (Succam), an organisation fighting for rights for sugar farmers.
Also looming, he added, are two potential external threats: the February 2008 expiry of the Comesa safeguard measures and implementation of sugar reforms by the European Union. But both sugar and its by-products have huge potential for value-addition. "Ethanol is increasingly acquiring global recognition as a renewable energy and substitute for fossil fuels," said Mr Kegode. To manufacturers and farmers, it also lessens dependence on commercialisation of the sole product - sugar."
Such a development is also essential to governments confronted with the pressure of high population growth on food, energy and contamination of the environment. Under pressure from soaring oil prices and growing environmental constraints, momentum is gathering for a major international switch from fossil fuels to renewable bio-energy sources, such as sugarcane or sunflower seeds, according to the United Nations.
In a statement, Alexander Muller, assistant director-general of the Food and Agriculture Organisation (FAO) Sustainable Development Department says: "The gradual move away from oil has begun. Over the next 15 to 20 years, we may see bio-fuels providing 25 per cent of the world's energy needs."
FAO's interest in bio-energy stems from the positive impact that energy crops are expected to have on rural economies and the opportunity offered to countries to diversify their energy sources. "At the very least, it could mean a new lease of life for commodities such as sugar, whose international prices have plummeted."
Prospecting for fossil fuels has now shifted to the East African countries, which are considered some of the last frontiers for new oil discoveries. The surge in the price of crude oil beyond $70 per barrel is responsible for renewed global interest in energy security.
The disruption of the Nigeria crude oil supplies, the nuclear stand-off between Iran and the US and the high demand for energy to support China's industrial growth exacerbate the crisis.
"Oil, at more than $70 a barrel, makes bio-energy potentially more competitive," says Mr Muller. "Also, in the past decade global environmental concerns and energy consumption patterns have built up pressure to introduce more renewable energy into national energy plans and to reduce reliance on fossil fuels."
This is a clear indication that the renewable energy options for bio-fuels and bio-diesel will be driven by agribusiness and increased production of agricultural raw materials meet increasing demand for energy supply.
Locally, venture capital investment companies, including Actis, are positioning themselves to tap into the biofuel supply chain. Early last month, the company allocated $100 million (Sh7.2 billion) for investment in agri-business. Kenya is poised to tap into the biofuel supply chain using commodities such as sugarcane, maize and sweet sorghum. It is important, said Mr Kegode, that producers position themselves by forming energy companies than can negotiate better prices and enhanced compensation from their investments.
Currently, there are two existing stand-alone ethanol plants - the Kisumu molasses and an agrochemical plant. For Kenya to build up an adequate supply of ethanol either for domestic blending purposes or for the export market, Mr Kegode said that the country would require five plants: two in maize-producing regions and three in sugar-producing zones.
Factors pushing for such a momentous change in the world energy market include environmental constraints such as increased global warming and the Kyoto Protocol's curbs on emissions of carbon dioxide and other greenhouse gasses as well as a growing perception by governments of the risks of dependence on oil.
FAO highlighted Brazil as an example for the rest of the world. Latin America's largest country is the world's biggest producer of bio-ethanol and one million Brazilian cars already run on fuel made from sugarcane, with most new cars powered by "flex fuel" engines. Introduced three years ago, they use either gasoline or bioethanol, or any mix of the two.
The Nation (Nairobi), via AllAfrica.
Also looming, he added, are two potential external threats: the February 2008 expiry of the Comesa safeguard measures and implementation of sugar reforms by the European Union. But both sugar and its by-products have huge potential for value-addition. "Ethanol is increasingly acquiring global recognition as a renewable energy and substitute for fossil fuels," said Mr Kegode. To manufacturers and farmers, it also lessens dependence on commercialisation of the sole product - sugar."
Such a development is also essential to governments confronted with the pressure of high population growth on food, energy and contamination of the environment. Under pressure from soaring oil prices and growing environmental constraints, momentum is gathering for a major international switch from fossil fuels to renewable bio-energy sources, such as sugarcane or sunflower seeds, according to the United Nations.
In a statement, Alexander Muller, assistant director-general of the Food and Agriculture Organisation (FAO) Sustainable Development Department says: "The gradual move away from oil has begun. Over the next 15 to 20 years, we may see bio-fuels providing 25 per cent of the world's energy needs."
FAO's interest in bio-energy stems from the positive impact that energy crops are expected to have on rural economies and the opportunity offered to countries to diversify their energy sources. "At the very least, it could mean a new lease of life for commodities such as sugar, whose international prices have plummeted."
Prospecting for fossil fuels has now shifted to the East African countries, which are considered some of the last frontiers for new oil discoveries. The surge in the price of crude oil beyond $70 per barrel is responsible for renewed global interest in energy security.
The disruption of the Nigeria crude oil supplies, the nuclear stand-off between Iran and the US and the high demand for energy to support China's industrial growth exacerbate the crisis.
"Oil, at more than $70 a barrel, makes bio-energy potentially more competitive," says Mr Muller. "Also, in the past decade global environmental concerns and energy consumption patterns have built up pressure to introduce more renewable energy into national energy plans and to reduce reliance on fossil fuels."
This is a clear indication that the renewable energy options for bio-fuels and bio-diesel will be driven by agribusiness and increased production of agricultural raw materials meet increasing demand for energy supply.
Locally, venture capital investment companies, including Actis, are positioning themselves to tap into the biofuel supply chain. Early last month, the company allocated $100 million (Sh7.2 billion) for investment in agri-business. Kenya is poised to tap into the biofuel supply chain using commodities such as sugarcane, maize and sweet sorghum. It is important, said Mr Kegode, that producers position themselves by forming energy companies than can negotiate better prices and enhanced compensation from their investments.
Currently, there are two existing stand-alone ethanol plants - the Kisumu molasses and an agrochemical plant. For Kenya to build up an adequate supply of ethanol either for domestic blending purposes or for the export market, Mr Kegode said that the country would require five plants: two in maize-producing regions and three in sugar-producing zones.
Factors pushing for such a momentous change in the world energy market include environmental constraints such as increased global warming and the Kyoto Protocol's curbs on emissions of carbon dioxide and other greenhouse gasses as well as a growing perception by governments of the risks of dependence on oil.
FAO highlighted Brazil as an example for the rest of the world. Latin America's largest country is the world's biggest producer of bio-ethanol and one million Brazilian cars already run on fuel made from sugarcane, with most new cars powered by "flex fuel" engines. Introduced three years ago, they use either gasoline or bioethanol, or any mix of the two.
The Nation (Nairobi), via AllAfrica.
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