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October 15, 2009

Global slowdown curbing African biofuels exports

by Leandi Cameron

The financial crisis is hindering African biofuels exports, Hart Energy Consulting Global Biofuels Centre (GBC) director for biofuels for Europe and Africa Maelle Soares Pinto says.

“We see a lot of overcapacity in the European Union (EU), the most likely market for biofuels exports from Africa,” she explains.

She elaborates that the consultancy follows biofuels developments worldwide. “We do actually follow developments in Africa and [wrote] two special reports on bio- fuels developments throughout the continent, in 2008 and early 2009; however, for now, it seems that many developments are still at project stage and driven mainly by the export market, rather than local demand,” she says, explaining that there are exceptions such as Nigeria and South Africa.”

She adds that several African countries benefit from special tariffs in the case of ethanol exports to the EU.

Hart’s GBC executive director, Tammy Klein, adds that, as yet, there is still not a demand driver in the African marketplace. “However, we recognise the great potential for the continent to be a major producer of feedstocks and note the many projects that are under way in many of the countries to cultivate feedstocks like jatropha, palm, cassava and sugar cane specifically for biofuels production.”

The rest of the world, however, will see an explosion in biofuels production. Despite a number of key issues, such as land use and competition for feedstock supplies for traditional food and feed uses, global use of biofuels is expected to more than double from 2009 to 2015, according to a new analysis report, ‘Global Biofuels Outlook to 2015’, recently released by Hart.

Leading the expansion is the US, with more than 35% growth of biofuels use.

Brazil will grow domestic supplies by 30% and more than double export volumes. Further, Indonesia and Malaysia are expected to more than double production of palm oil bio- diesel, while Germany will remain Europe’s largest biofuels producer.

Major new contributors to the growth of global biofuels between 2009 and 2015 include Indonesia, France, China, India, Thailand, Colombia, Malaysia, the Philip- pines and Argentina. First-generation ethanol, palm oil biodiesel and rapeseed bio- diesel from Europe will continue to be the dominant biofuels produced.

Despite major public policy inter- est in next-generation biofuels, actual commercial growth in the production and use of these fuels between 2009 and 2015 is projected to remain below expectations.

Out of about 170 next-generation biofuels projects around the world that are at some stage of develop- ment (operational, under construction or proposed), only 30% of those are actually expected to be operating during the study timeframe, and many of those are still at the pilot project stage.

Still, GBC recognises the poten- tial cellulosic ethanol and renewable diesel represent. “When fully commercialised, these fuels will command both a quality and price premium in the marketplace. Technologies which have, thus far, added major oil company joint venture partners, seem to have the greatest opportunity for first commercial operations.”

“Be it cellulosic ethanol, renewable diesel, biomass-to-liquids or Fischer-Tropsch liquids, made from feedstocks such as agricultural or municipal solid wastes, grasses, woods, wastepaper or algae, next-generation biofuels are still largely under research and development,” says Klein.

Moreover, the study finds that mandates set for next-generation biofuels will not be met, particularly in the US.

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