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Presented at the ECONOMICS ASSOCIATION OF ZAMBIA Taj Pamodzi Hotel – Baobab Lodoge, Lusaka September 30 th , 2008 By Pro

LIQUID BIOFUELS AS A VIABLE ENERGY MIX IN ZAMBIA. Presented at the ECONOMICS ASSOCIATION OF ZAMBIA Taj Pamodzi Hotel – Baobab Lodoge, Lusaka September 30 th , 2008 By Prof. Thomson Sinkala CHAIRMAN, Biofuels Association of Zambia www.biofuelszambia.org. CONTENT.

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Presented at the ECONOMICS ASSOCIATION OF ZAMBIA Taj Pamodzi Hotel – Baobab Lodoge, Lusaka September 30 th , 2008 By Pro

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  1. LIQUID BIOFUELS AS A VIABLE ENERGY MIX IN ZAMBIA Presented at the ECONOMICS ASSOCIATION OF ZAMBIA Taj Pamodzi Hotel – Baobab Lodoge, Lusaka September 30th, 2008 By Prof. Thomson Sinkala CHAIRMAN, Biofuels Association of Zambia www.biofuelszambia.org

  2. CONTENT • Zambia’s compelling environment for engagement in biofuels • What have we done so far? • Organizational • Research and development • Operational • Zambia’s preferred feedstocks • 4. Opportunity for poverty alleviation • 5. Brazilian Experience • 4. Conclusions Prof. Thomson Sinkala, CHAIRMAN of Biofuels Association of Zambia

  3. COMPELLING ENVIRONMENT FOR ZAMBIA’s ENGAGEMENT IN BIOFUELS • Peak Oil “Fever”; • Energy security; • Increasing fuel expense • Energy deficiency for industry and domestic needs (the ever increasing load shedding); and • Poverty reduction opportunities. Prof. Thomson Sinkala, CHAIRMAN of Biofuels Association of Zambia

  4. As of 3rd March 2008 http://www.energyandcapital.com/ Average replacement rate of oil reserves www.energyandcapital.com/ Prof. Thomson Sinkala, CHAIRMAN of Biofuels Association of Zambia

  5. New GAO Peak Oil Report Provides Urgent Call to Action: U.S. Vulnerable and the Government Unprepared for Unacceptably High Risks of Oil Supply Shock March 29, 2007 Congressman Roscoe Bartlett said, “This GAO peak oil report is a clarion call for leadership at the highest level of our country to avert an energy crisis unlike any the world has ever before experienced and one that we know could happen at any time. Only the President can rally the country to take the urgent steps necessary. Potential alternatives to oil are extremely limited. Technology won’t save us without time and money to develop and scale them up.” Prof. Thomson Sinkala, CHAIRMAN of Biofuels Association of Zambia

  6. A Chatham House (of UK) Report titled: “The Coming Oil Supply Crunch” published in August 2008 warns that “… unless there is a collapse in oil demand within the next 5 to 10 years, there will be a serious oil ‘supply crunch’”. The Accenture Report of September 2008 states that: The global biofuels industry has a 10-year window of opportunity to evolve into a global and efficient industry before new technologies competed with first- and second-generation biofuels. Developing countries like Zambia that do not own their biofuels industry NOW will only be production grounds, and Zambians to remain only as workers. Prof. Thomson Sinkala, CHAIRMAN of Biofuels Association of Zambia

  7. USA Shell Oil Co., BP America Inc., Chevron Corp. and ConocoPhillips together have invested $3.5 billion in: solar, wind, biofuels projects ISRAEL Labor Party fixture Binyamin (Fouad) Ben-Eliezer the National Infrastructures Minister says……………… with worldwide oil supplies squeezed to the point where even friendly suppliers won't have much left to send to Israel. Therefore,……… southern desert known as the Negev, where the world's most highly concentrated solar radiation levels could turn sparsely inhabited areas into a renewable energy gold mine. BRAZIL Prof. Thomson Sinkala, CHAIRMAN of Biofuels Association of Zambia

  8. NAMIBIA (Desert) EGYPT (Desert) Prof. Thomson Sinkala, CHAIRMAN of Biofuels Association of Zambia

  9. MOZAMBIQUE Maputo, June 21, 2006 In all his visits to provinces, this year, President Guebuza asks the population to cultivate jatropha and other oil producing plants.  He had a branch of a jatropha with some fruits and showed the population how the plant and its fruits look like. He also showed them a jatropha oil-lamp and told them how easily it can replace the current fossil-fuel lamps used in many households, in urban areas as well as in the rural areas. 7 million hectares earmarked for biofuels Prof. Thomson Sinkala, CHAIRMAN of Biofuels Association of Zambia

  10. CHINA 13 million hectares to be under Jatropha INDIA 39 million hectares (13.5% of landmass) to be under Jatropha ZAMBIA Workshops ? Meetings ? Planning how to beg ? Sharpening begging skils ? Prof. Thomson Sinkala, CHAIRMAN of Biofuels Association of Zambia

  11. LACK OF TEAMWORK 1. 2.

  12. What have we done so far? (i) Organizational 17th – 18th August 2006: National stakeholder‘s consultative workshop for biofuels in Zambia held at Mulungushi International Conference Centre, Lusaka. 25th September 2006: Biofuels Association of Zambia (BAZ) registered to promote biofuels industry in the country. 25th January 2007: 1st Release of Information to the Public (JATROPHA CURCAS – What we know). 29th January 2007: Minister of Energy challenges BAZ to develop a quantitative understanding of the biofuels industry to be the basis for decision making. 20th April 2007: Draft Biofuels Development Framework formulated jointly by Government and BAZ.

  13. What have we done so far? (i) Organizational (continued) 29th April 2007: TEN (10) Action Points from the Draft Biofuels Development Framework developed by the National Technical Committee (composed of Govt and BAZ). June 2007: BAZ communicates to the President of Zambia on issues affecting development of biofuels industry. 22nd – 24th July 2007: The President elevates the biofuels agenda by inviting BAZ to the Business Advisory Council. 5th September 2007: The Ministry of Commerce, Trade and Industry begins facilitating dialogue on financing of the energy sector. November 2007: Government approves the Energy Policy (comprising biofuels).

  14. What have we done so far? • (i) Organizational (continued) • Since December 2007: Development of the DRAFT National Energy Strategy for the 2008 – 2030 period by Government jointly with stakeholders. • 16th April 2007: Government issued a Statutory Instrument (SI 42) which legalizes biofuels. • May 2008: The Energy Regulations Board issued liquid biofuels standards. • Government is considering a statutory instrument to make biofuels a priority sector; and • Government is working on National Energy Strategy 2008 – 2030. The strategy comprises biofuels.

  15. What have we done so far? • (ii) Research and Development • Research is being carried out on sweet sorghum by University of Zambia; • Significant research was carried out on Jatropha by the then National Council for Scientific Research (now National Institute of Scientific and Industrial Research). • The private sector is carrying out various tests and developments on feedstocks and vegetable oils. • Since April 2008: Ministry of Science and Technology formulating R & D programme for Jatropha.

  16. In October 2007 we completed a study on Jatropha Value Chain Supported by Sida of Sweden through the International Labor Organization

  17. March – May 2008: Country wide survey of biofuels related activity. MEWD / UNDP Funded Report of the Tour of Liquid Biofuels Industry in Brazil With proposal for a trilateral cooperation involving Zambia, Brazil and UNIDO May 2008 Prof. Thomson Sinkala, CHAIRMAN of Biofuels Association of Zambia

  18. ZAMBIA’s PREFERRED FEEDSTOCKS Prof. Thomson Sinkala, CHAIRMAN of Biofuels Association of Zambia

  19. The opportunity for Zambia’s participation and ownership of the biofuels industry is now less than 5 years!! Prof. Thomson Sinkala, CHAIRMAN of Biofuels Association of Zambia

  20. PARAMETERS USED FOR ANALYSIS OF FEEDSTOCKS • Scope of wealth ownership at all levels; • Production technology; • 3. Job creation; • 4. Resilience against external disturbances; • Diversity of products; • 6. Size of investment; • 7. Market scope; • 8. Land requirements; • 9. Water requirements; • 10. Food security; • 11. Geographical coverage of wealth ownership in the country; and • 12. Environmental protection

  21. In general, the best feedstock should be one that NET empowers all players across the board, from small to large. MONOPOLISTIC feedstocks are a possible breeding ground for UNSUSTAINABLE biofuels industry. Prof. Thomson Sinkala, CHAIRMAN of Biofuels Association of Zambia

  22. FEEDSTOCKS FAVOURABLE TO ZAMBIA’s SITUATION • OIL / BIODIESEL • Jatropha curcas (first choice and country-wide participation) • Palm (mainly viable on large scale and in selected parts of Zambia) • BIOETHANOL • Sweet sorghum (country-wide participation) • Sugarcane (already existing) Prof. Thomson Sinkala, CHAIRMAN of Biofuels Association of Zambia

  23. Land Requirements • Zambia currently consumes about • 200 million litres/year petrol • 20 million litres /year kerosene • 400 million litres/year diesel • YIELD ASSUMPTIONS: • Oil/Biodiesel • Jatropha (2000 liters/ha) • Palm (3000 liters/ha) • Bioethanol • Sweet sorghum (4200 liters/ha) • Sugarcane (7500 liters/ha) • Taking Jatropha and Sweet sorghum as lower ends for 100% substitution, the land requirements for local consumption would be: • BIODIESEL & KEROSENE would require: • 420m l/yr would need 210,000 ha • BIOETHANOL would require: • 200m l/yr would need 48,000 ha. Prof. Thomson Sinkala, CHAIRMAN of Biofuels Association of Zambia

  24. This land requirement of 260,000 ha is almost half that (about 450,000 ha) which Zambia looses as a forestry cover every year due to: • Shifting cultivation; • Mining; • Charcoal burning; • Etc Prof. Thomson Sinkala, CHAIRMAN of Biofuels Association of Zambia

  25. 10 gms Jatropha cake 5 gms D-compound 5 gms Jatropha cake Food Security Jatropha Nutrient Content (independent analyses) N 6.0%, P 2.75% and K 1.0% ( Chungu, in UNIDO paper on liquid biofuels). N 3.2 – 4.44%, P 1.4 – 2.09%, and K 1.2 – 1.68% (Eijck, in UNIDO paper on liquid biofuels). Jatropha organic fertilizer tests at Thomro Biofuels Farm, Zambia Own fuel by farmers will lead to mechanized farming systems, and therefore increased production

  26. Reduced Deforestation Biogas from Jatropha Jatropha cake as charcoal Use of Jatropha biogas and charcoal would significantly reduce deforestation due to wood charcoal fuel

  27. Power Generation SOURCE: Energiebaue of Germany This opportunity will (i) accelerate rural electrification and manufacturing. (ii) improve services in areas such as Education (eLearning), Health, and eCommerce, Commerce.

  28. WHAT IS BAZ NOW WORKING ON? • BAZ is now lobbying Government to: • facilitate availability of funds to enable participation by citizens in the biofuels industry; and • provide incentives to boost investment in the industry. Prof. Thomson Sinkala, CHAIRMAN of Biofuels Association of Zambia

  29. LESSONS FROM BRAZIL Prof. Thomson Sinkala, CHAIRMAN of Biofuels Association of Zambia

  30. LESSONS FROM BRAZIL Prof. Thomson Sinkala, CHAIRMAN of Biofuels Association of Zambia

  31. Prof. Thomson Sinkala, CHAIRMAN of Biofuels Association of Zambia

  32. Prof. Thomson Sinkala, CHAIRMAN of Biofuels Association of Zambia

  33. CURRENT MATRIX OF VEHICLE FUELS – 2007 IN BRAZIL The anhydrous ethanol is mixed with gasoline A where the compulsory present use is 25% in the blend (gasoline C). The hydrated ethanol is used pure in ethanol vehicles or voluntarily in flex fuel vehicles (any blend to gasoline C). Prof. Thomson Sinkala, CHAIRMAN of Biofuels Association of Zambia

  34. Prof. Thomson Sinkala, CHAIRMAN of Biofuels Association of Zambia

  35. Increasing trend in the energetic and food crops production in Brazil (x1000t) Prof. Thomson Sinkala, CHAIRMAN of Biofuels Association of Zambia

  36. Overall production and world ranking of some Brazilian commodities Prof. Thomson Sinkala, CHAIRMAN of Biofuels Association of Zambia

  37. Free market prices of fuels in Brazil (June 2008) Bioethanol: B$1.779 (about US$1.11) Petrol costs B$2.599 (about US$1.62) Prof. Thomson Sinkala, CHAIRMAN of Biofuels Association of Zambia

  38. FUNDING THE BIOFUELS INDUSTRY The financing agencies include: BNDES (National Bank for Economic and Social Development); PRONAF (National Program for the Strengthening of Family Farming); Banco do Brazil – “BB – Biodiesel line of credit”; and Other official or private banks. Long Term Interest Rates (TJLP)

  39. Oil Crops Financing Programs (BNDES)

  40. Social Fuel Certificate (Seal or Stamp) and how it works To participate in the production and distribution of biodiesel, one must obtain a Social Fuels Certificate from ANP (an equivalent of the Energy Regulation Board of Zambia), the authorized Government agency. To obtain the Social Fuel Certificate, a company must: Commit to buy regularly a minimum amount of raw material that comes from the household agriculture (small farmers); 2. Commit to provide the appropriate technical assistance including certified seeds, rural technicians and best practices; and 3. Sign a contract with each small farmer in terms that must be regarded as proper by a rural workers’ union.

  41. The Biofuels Industry Profile Not Regulated by ANP Regulatedby ANP Ethanol Producer Agricultural Chain Chainofindustry, supplyandretail Sugar cane E100 Veget. oil or Seed Seeds B2/E100 GASOHOL B2/E100 GASOHOL B100 Crops Crusher/Extractor Supplier Biodiesel Producer B100 Service Station or Retailer Consumer B100 Refinery B100 ONLY FOR CASES WITH ANP AUTHORIZATION Consumer

  42. Where are we in Zambia? Prof. Thomson Sinkala, CHAIRMAN of Biofuels Association of Zambia

  43. Where are we in Zambia? Prof. Thomson Sinkala, CHAIRMAN of Biofuels Association of Zambia

  44. Where are we in Zambia? Prof. Thomson Sinkala, CHAIRMAN of Biofuels Association of Zambia

  45. EXAMPLE OF: Timely Action by Mozambique From: "Generosa Cossa" <generosa@uem.mz>  To: "Prof. Thomson Sinkala" <tsinkala_thomro@yahoo.com>,  dimonekeneditutala@yahoo.com.br, tom.mukaiwa@bits.com.na, dlakudzala@bumas.com, andre.md@matrix.co.mz, mabila@uem.mz, izakvn@telecom.na, lp@lehlaka.co.za Subject: Re: About the Jatropha Project Date: Fri, 2 Jun 2006 00:37:42 +0300 Dear Prof Sinkala, I am writing to thank you for the information you gave us about Jatropha. We managed to influence our government and now the jatropha plantation is part of the national policy. All the best for you. I hope to see you in Maputo. Best regards, Generosa Prof. Thomson Sinkala, CHAIRMAN of Biofuels Association of Zambia

  46. CONCLUSIONS • The threat of energy insecurity is real and the Government must elevate the urgency to catch-up with the FAST GROWING GAP (e.g. Brazil & Malawi); • Government and LEGAL FRAMEWORKS on biofuels should be completed urgently to build confidence and energize players. • The biofuels industry has room for all at all levels in society, and therefore has potential to address economic problems country-wide. • Land requirements for biofuels industry, are way less than feared. Prof. Thomson Sinkala, CHAIRMAN of Biofuels Association of Zambia

  47. CONCLUSIONS / RECOMMENDATIONS (continued) 6. Biofuels is a new industry and needs to be assisted through incentives and R & D because of its high potential to reduce poverty and address energy insecurity. 7. Research must run IN PARALLELwith production. 8. Government MUST facilitate availability of funds to enable participation by citizens in the biofuels industry. Prof. Thomson Sinkala, CHAIRMAN of Biofuels Association of Zambia

  48. Thank you for your attention

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