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March 16, 2008

Kenya prepares biodiesel master plan

Kenya is set to roll out a bio-diesel master plan it hopes will help it cut its kerosene consumption by half and significantly reduce its diesel usage in the next three years.

Energy economists said the plan could initially help the country save Sh3.4 billion annually.

Roll-out of the plan comes at a time when petroleum prices have risen to unprecedented levels in the global crude market, fuelling inflation and leaving huge import bills in the hands of net importers such as Kenya.

Crude oil price touched the $109 per barrel mark for the first time in the history of oil trading, signalling a steep rise in pump prices in the next few months.

The impact of high oil prices is expected to be particularly high on low income households where paraffin is the main source of energy for lighting and cooking. As the cost of petroleum products rise, energy spending will account for a larger fraction of these poor households’ budgets posing the possibility of reversing the recent gains in living standards.

A national survey conducted in 2005/06 financial year indicated that 76.4 per cent of the Kenyan population relies on paraffin for lighting and cooking. Its consumption has however been declining in what economists attribute to rising prices. This decline is however seen to be pushing the poor — especially in rural areas to use of fire wood with serious consequences on the environment.

Last year, for example, kerosene consumption dropped to 329,000 metric tonnes down from 364,000 tonnes in 2006 and 389,000 tonnes in 2005.

Energy experts are particularly keen on using bio-diesel to help cut the oil import bill that stood at Sh113 billion in 2007 compared to Sh98 billion in 20006. The push for bio-diesel is also motivated by the need to increase energy security by reducing the country’s reliance on imported fuel.

Kenya has limited capacity to store fuel storage and is currently operating on low national strategic reserves that covers only 20 days.

Besides, bio-diesel is seen as a cleaner source of energy that reduces the impact of consumption on the environment. The United States Department of Energy reckons that burning 100 per cent bio-diesel produces only 25 per cent as much carbon dioxide as burning petroleum-based diesel.

The new plan is to be managed by the National Bio-diesel Committee in partnership with private sector processors of bio-diesel. The initiative is also expected to help the country realise a blend of 80 per cent fossil diesel and 20 per cent bio-diesel mix. Total consumption of high speed diesel used in vehicles and generators stood at 1.8 million tonnes in 2007.

Success of the plan is hinged on massive investment in the growing of the jatropha crop that is the main source of bio-diesel. The plant has been selected because of its ability to grow in semi-arid land that is currently not being used to grow food crops.

Besides, the Jatropha is seen to offer an opportunity to reclaim such land and open a new income stream for those living in such areas. Jatropha produces dry, black poisonous nuts that are about 35 per cent oil. In the past, jathropha was planted primarily to stop erosion and prevent land from turning to desert.

It grows in very poor soil, and an established plant can produce nuts for half a century. Research also shows that one hectare of Jathropa yields 1.1 tonnes of biodiesel per annum.

Energy permanent secretary Patrick Nyoike said based on the initial research, biodiesel will cost about Sh45 per litre compared to the current price of fossil diesel at Sh80 per litre. He said biodiesel will also be used to run the numerous diesel-powered electricity stations that have been built across the country.

Business Daily Africa

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