State slow to exploit benefits of ethanol

Kenya is sitting on a potential goldmine in the shape of a biofuel, that could save the country millions of shillings annually in crude and refined oil imports.

However, lack of laws to regulate the production and use of biofuels is holding back investment in infrastructure and technology to encourage their use.

Ethanol, a biofuel that can be manufactured from sugar cane by-products, and maize, can be blended with petrol and used in vehicles.

biofuel, ethanol can also provide a much more reliable revenue stream for sugar millers keen on diversifying production.

"Kenya’s ethanol requirement for blending with petrol is 60 million litres per year, out of which Mumias Sugar Company has the capacity to produce 27 million litres from molasses," Dr Evans Kidero, the managing director of Mumias Sugar Company told The Standard.

"However, the energy policies need to be reviewed, to accommodate the changes in the energy sector," he added. Sugarcane is one of the most important crops, besides tea, coffee, maize and horticultural crops. An estimated six million Kenyans derive their livelihood directly or indirectly from the sugar industry.

ethanol-blended petrol

Although ethanol is attractive, implementation has not been successful.

For example, there should be a law that makes it mandatory for oil companies to give consumers the option of buying ethanol-blended petrol.

Also, as has happened in Brazil, the Government would have to create incentives that make it cheaper to buy vehicles that can run on ethanol and ethanol-blended petrol. A subsidiary legislation to the Energy Act could make it possible to implement changes in phases.

While the Act supports bio-ethanol development, the Sugar Act and the molasses distribution policy have restrictions that must be removed.

The legal and regulatory frameworks governing the petroleum and electricity sub-sectors are inadequate, and there is no specific law to regulate the management of biomass and other renewable energy sub-sectors.

For instance, there is no effective legal and regulatory framework for the industry to enforce minimum operating standards.

The challenge is therefore to review the existing laws to conform to the emerging issues in the petroleum and electricity sub-sectors, and develop appropriate legal regimes for biomass and other renewable energies.

Mr Kidero said the company has the capacity to produce up to 40 million litres of ethanol annually.

"We can produce ethanol from the molasses currently produced as a by- product. It is one of the strategies we have in order to diversify the sugar industry base in readiness to compete once the COMESA safeguards period expires." He said.

Mumias Sugar Company is currently undertaking a feasibility study on the viability of setting up an Ethanol plant in Mumias.

Two companies, Spectre International Limited and Agrochemical and Food Company Limited (ACFC), produce ethanol, but not for the fuel market.

The capacity of existing sugar factories and ethanol distillers are more than adequate to meet the local demand for ethanol and for the export market. However, the process will have to a wait a privatisation programme for the debt strapped sugar companies of Muhoroni, Sony, Chemelil, Nzoia, and Miwani.

Lack of research in biofuels is another hurdle. Even though there is a high potential ethanol in the sugar producing areas, switching of land from food production to energy crops requires introduction of higher yielding crops, so as not to endanger food security.

In South Africa, it is illegal to use maize for ethanol production. In certain instances where a product (like sugar) is produced in excess, it is acceptable to either export the sugar or make alcohol from sugar juice.

Power alcohol was introduced in Kenya as a fuel blend for gasoline in 1983. However, due to its higher cost of production compared to petrol, its use was discontinued in 1993.

At the time, the Agro Chemical and Food Company (ACFC), with Government assistance, would obtain molasses, the feedstock from state owned sugar factories, at prices that in most cases were below the prevailing market prices.

This arrangement by implication provided additional subsidy to the power alcohol and was therefore unsustainable.

To bring the power alcohol-petrol blend (gasohol) to the same retail price level as super grade petrol, the Government had to reduce the customs tariff on the gasohol.

Even with this subsidy, the production of gasohol was still not viable. The challenge is therefore to make the domestic production of power alcohol competitive with motor gasoline to facilitate its re-introduction as a motor fuel blend.

Moreover, technology required to produce ethanol need to be enhanced through investment in training.

source: eastandard