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April 18, 2009

Mozambique approves policy on biofuels

In the latest move in African biofuels development, the government of Mozambique has adopted a National Policy and Strategy for Biofuels. The new initiative, launched on 24 March, establishes guidelines for both the public and private sector to better participate in the biofuels industry.

Officials say the primary purpose for adopting the measure is to reduce the country’s dependence on imported fossil fuels. Other factors, such as the need to ensure energy security, advantageous conditions for agriculture, and need to promote sustainable economic growth, were also cited as motivating factors.

Concerns over food security issues in relation to growing food crops for biofuels were highlighted in parliamentary discussions on the issue. “We will produce biofuels without compromising food production,” Vice-Minister of Culture Luís Covante said. Raw materials for manufacturing ethanol include sugar cane and sorghum, while the biodiesel is often obtained from coconut and the jatropha plant.

The same parliamentary session that voted to approve the document also agreed to create a National Biofuels Council which will be responsible for monitoring the implementation of policies targeting the sector.

In an effort to promote the development of biofuel production, Mozambique has engaged governments and businesses in other countries, namely biofuels giant Brazil. Former Portuguese colonies, continue to share cultural, linguistic, and trade ties and Brazil’s experience in the sector has allowed it to become a leader in biofuels cooperation deals in other countries.

Mozambique has already concluded agreements on trade cooperation, investment, and technology transfer for several years, giving the country an advantage over other African countries now dabbling in biofuels production, such as Angola.

The first ethanol plant in Mozambique, inaugurated in October 2007, received some US$510 million in support from the UK. The plant currently produces 120 million litres of ethanol per year.

More recently, Mozambican biofuels policies designed to stimulate the sector have led to the approval of three export-oriented projects in the south, north, and centre of the country. In order to stimulate domestic consumption, the government plans to establish a mandatory 15 percent blend of biofuel to petrol and diesel within five years.

Biofuels investments in African countries, such as Mozambique and Angola, have an advantage over other countries due to the EU tariff-free export status of former European colonies. African biofuels exports to the US may also qualify for preferential export treatment, due to the African Growth and Opportunities Act (AGOA), which seeks promote the development of sustainable industry in less developed countries, mostly in Africa. The program is a response to the EU “Everything but Arms” program.


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