Biofuels in UgandaAndrew Cleary, David Jung, Nicole Noyes

Value Chain

BIOMASS PRODUCTION BIOFUEL MARKETINGBIOFUEL DISTRIBUTIONBIOFUEL REFINING

• Geographic And

Agricultural Profile

!• Production

Of Food Crops

!• Productivity

By Region

• Biofuel Feedstock

Profiles !

• Steps To Build Refineries

!• Potential

Locations

• Supply Chain !

• Methods Of Transportation

!• Road And Rail

Systems

• Fuels For Transportation

!• Comparison

To Petrol !

• Secondary Markets

• Uganda Census of Agriculture (UCA) 2008/2009 by Uganda Bureau of Statistics

• About 31 million people (86% of the population) rely on agriculture

Biomass Production

Food Security• More than half (56.7%) of Ag HHs cannot afford normal

diet (Food insecurity)

✦ Central 49.1%, Eastern 57.5%, Northern 74.1%, Western 48.4%

• The reasons for food shortage

✦ Loss of crops/insufficient production (71.4%)

✦ Inadequate capital (19.3%)

✦ Inadequate land (10.0%)

Capabilities of Agricultural Population

• Availability of Food Storage

• Irrigation and water management

• Loss of agricultural output due to natural disaster

• Water status

• Non-Labor Inputs

• Access to Credit

• Access to facilities

Land Use

Major Food Crops

Food Crops by Region

Production and Disposition of Major Food Crops

• Top Imports

1. Palm Oil

2. Wheat

3. Sugar

4. Barley

5. Food Prep Nes

• Top Exports

1. Coffee

2. Cotton

3. Tea

4. Sugar

5. Tobacco

Imports and Exports

Soil Productivity of Uganda

Biofuel Refining• Step 1: Plant Size Determination

• Step 2: Selecting an Appropriate Site

• Step 3: Permitting

• Step 4: Biofuel Plant Engineering 

• Step 5: Determining Your Biofuel Equipment Needs

• Step 6: Assistance in Plant Installation

• Step 7: Quality and BQ-9000 Considerations

• Step 8: Plant Start Up and Training

• Step 9: Plant Management

• Step 10: Planning for the Future

Ethanol Feedstock Assessment

Biodiesel Feedstock Assessment

Commercial Biofuel Venture

• The African Power Initiative has begun biodiesel production in 2013

✦ Current production 4000 liters per day (1.4M liters/year), 0.23% of total Ugandan demand for transportation diesel fuel

✦ Jatropha, castor nut, and croton production in Karamoja (Central North)

✦ The refinery is located in Kampala (Capital)

Ethanol vs. BiodieselETHANOL BIODIESEL

Combustion Danger Flammable/combustible Non-Flammable/combustible

Overall Production Cost More Less

Secondary Market Cookstoves Electricity

Transportation Fuel Use

Sector Demand 450M liters/year 600M liters/year

Increase/Decrease Increasing Drastically Decreasing Slightly

Recommended Blend with Petrol 10/90 (E10); 85/15 (E85) 5/95 (B5); 20/80 (B20); 100/0 (B100)

MPG/Power Reduction 3-4% (E10); 20-30% (E85) Negligable (B5); 2% (B20); 10% (B100)

Environmental Statistics

Net Energy Balance 25% 93%

CO2 72% 40%

Overall Emissions Comparison More Fewer

Production

Feedstocks Corn, Sugar, beets, wheat, cassava(food crops) Rapeseed, sunflower, soybean, palm, coconut, jatropha, animal fat

Made with Isobutylene Methanol

Biofuel Distribution

Local Distributors Multinational Distributors

Regulations Low (Ugandan) High (Parent Country)

Capital Low High

Area Served Urban Rural and Urban

WholesalerCorporate Customer

Transporter

Retailer

Wholesalers

• Import refined petroleum

• Redistribute through:

✦ Subsidiary fueling stations

✦ Independent fuel stations

✦ Direct sale to corporations

Transportation• Safety standards set by wholesaler

• Rural areas are extremely inaccessible

• Transportation is managed by:

✦ Wholesaler

✦ Retailer

✦ Third Party Contractor

Retailer

• Distributors own and brand many retail outlets

• Some are also independently owned

• Independent retailers either operate under a distributor brand or brand themselves independently

Corporate Customers

• Large organizations that consume high volumes

of fuel buy in bulk!• Buy directly from wholesalers or through

independent retailers!• Negotiate lower prices

Storage

• Biodiesel is non-flammable and safer to store

than ethanol!• There is a wide variety of acceptable storage

tank materials!• Ugandan regulations are very relaxed

Transportation Methods

• Truck

✦ Up to 30,000 liter capacity semi-trailers

✦ 6 MPG

Transportation Methods

• Rail

✦ Up to 100,000 liter capacity railcars

✦ 18 MPG (for comparison purposes, trains are 3X more fuel efficient than trucks)

Transportation Methods

• Barge

✦ Up to 1.7M liter capacity total on a barge

✦ Can transport tanks from railcars or trucks

✦ 48 MPG (for comparison purposes, barges are 8X more fuel efficient than trucks)

Quality of Roads

• Congested, narrow highways

• Potholes on every road

• Many rural roads require 4x4 vehicles

• Kampala to Mbarara highway is in the best condition

Biofuel Marketing• Transportation Fuels

✦ Ethanol

✦ Biodiesel

• Secondary Markets

✦ Cookstoves (ethanol)

✦ Electricity (biodiesel)

Transportation Fuel

• Currently 100% reliant on refined petroleum imports

• Could domestically produce up to 3.57M liters per day in 2016

✦ Estimated 1.7B barrels of recoverable oil

✦ China National Oil Company

Transportation Fuel

• 1.6% of the rural population owns a car or truck

• 8.7% own motorcycles

• 92% of vehicles are bought used

• 8% are bought new

Transportation Fuel

• Gasoline as of 2012

✦ 450M liters consumed

✦ Average cost: $1.39/liter

✦ Tax collected: $0.37/liter

✦ Demand is drastically increasing

Transportation Fuel

• Diesel as of 2012

✦ 600M liters consumed

✦ Average cost: $1.25/liter

✦ Tax collected: $0.24/liter

✦ Demand is slightly decreasing

Ethanol

• Blends with petroleum

✦ E10: 10%/90%

✦ E85: 85%/15%

✦ E85 requires a Flex Fuel engine

Ethanol

• Loss in MPG and power

✦ E10: 3-4%

✦ B85: 20-30%

Biodiesel

• Blends with diesel

✦ B5: 5%/95%

✦ B20: 20%/80%

✦ B100: 100% biodiesel

✦ Many automakers do not recommend higher than B5 because of concerns over durability

Biodiesel

• Loss in MPG and power

✦ B5: Negligible

✦ B20: 2%

✦ B100: 10%

Secondary Markets• Cookstoves

✦ Some stoves can burn ethanol

✦ Competing fuels for these stoves are kerosene and LPG

✦ Estimated market size is 1-2M households

✦ 600,000 households currently own compatible stoves

Secondary Markets

• Electricity

✦ About 1% of Uganda’s electricity is produced from fossil fuels and distributed locally

✦ Diesel engines can be used to generate small amounts of electricity and to power household tools

GBEP Standards

• Measure outcomes of bioenergy industry by 24 GBEP indicators

• Categorize indicators by environmental, social, or economic impacts

Environmental Impacts• GHG Emissions

✦ Concerns about global climate change

✦ Predicted reduction in greenhouse gas emissions

• Land Use

✦ Change in land use risks reducing local food availability

✦ Tension between food crops and energy crops

Environmental Impacts• Biodiversity

✦ Fear biofuels industry leads to deforestation/biodiversity loss

✦ Destruction of rain-forests and wetlands

• Water Use and Efficiency

✦ Free access to water is linked to land acquisitions

✦ Increasing scarcity of water

Social Impacts

• Change in Income

✦ Negatively affected household economies

✦ Did not have any effect because of low wages

✦ Failed to offset the loss of income from agricultural activities

Social Impacts

• Jobs in the Bioenergy Sector

✦ Increased employment opportunities

✦ Most employment concentrated on production level (growing feedstock)

✦ New jobs might not be sustainable

Social Impacts• Food Prices

✦ Rising food prices

✦ Critical need for biofuels that use less food crops

✦ High food prices might be good for rural farmers

✦ Rising crop prices hurts the urban poor

Social Impacts

• Women and Children

✦ Little research on gender impacts of biofuel production

✦ More productive use of time for women

✦ Offer new business opportunities for women

Social Impacts

• Land Tenure

✦ Approach of “legal pluralism” to private property rights

✦ Lack of formal property rights hurts local farmers

Economic Impacts

• For non-oil producing countries, domestic biofuels provide alternative

• Provide additional source of agricultural income

• Could improve local infrastructures

• Rising biofuel feedstock prices might incentivize exports

Questions?