Tuesday, November 20, 2007

Energy: Mozambique - biofuels a process of trial and error

Ecomoz's biodiesel plant, surrounded by the decrepit remnants of an out-of-use oil refinery in the dusty industrial zone of Matola, just north of the Mozambican capital, Maputo, does not inspire much confidence in the newly-hyped energy of the future.

Still, its two large tanks, connected to storage facilities by a tangle of pipes, are capable of producing more than 5,000 litres of biodiesel an hour from plant oils. Unfortunately, the facility is idle.

In July, Salvador Namburete, Mozambique's Minister of Energy, told the International Conference on Biofuels 2007 in Brussels, Belgium, that he saw great potential in biofuels because they would reduce Mozambique's dependency on fossil fuels.

"They give response to high, unpredictable and unstable oil prices on the international market," he said, and would contribute to national poverty alleviation. "They are labour intensive, and can generate agricultural and agro-industrial employment, self-employment and income, particularly in rural areas, where the incidence of poverty is highest."

But as Ecomoz and other ventures suggest, the sudden push for large biofuel projects in countries like Mozambique will be a process of trial and error.

The argument in the international and local media has centred on food security - "How to ensure an adequate balance between biofuels production and food production ... and [prevent] the occurrence of systemic food shortage and chronic food insecurity," as Namburete put it. But the overriding concern is that most farmers must produce a cash crop, edible or not.

Eat or burn is not the question

"The problem is not only a biofuels problem," said Anna Lerner, a consultant working for the Southern Africa Development Community's (SADC) Programme for Biomass Energy Conservation. "Infrastructure is a constraint for investors and small farmers," she told IRIN, and the modest scenarios for biofuel development were not anticipated to interfere with food supplies.

A draft of a recent World Bank study on the feasibility of biofuels in Mozambique noted that food security depended far more on a farmer's capacity to work his or her land than the availability of land itself. More than 95 percent of the country's farms consist of small family plots, of which only 4 percent use fertiliser and 6 percent have irrigation.

The average maize output per hectare is lower than in any of the surrounding countries, and infrastructure constraints present a huge obstacle to bringing the small amount of excess food that farmers grow to markets.

Only 5 million of Mozambique's 36 million cultivable hectares are being farmed; of the remainder, some 13 percent was once cultivated but now lies fallow.

Off to a rough start

The Ecomoz plant was inaugurated with great fanfare in August 2007, but production has virtually halted, not for lack of mechanical parts, electricity, or funds, but because of the poor quality of raw material it was built to convert: copra, dried coconut meat that yields coconut oil, a source of biodiesel.

A price war between two producers in Inhambane province, in central Mozambique, led to poor harvesting and storage practices. The copra arrived in Matola mouldy and unusable.

Ecomoz, in which Mozambique's state-owned oil company, Petromoc, has a 30 percent share, now has to set up its own coconut-processing facility and employees have been collecting used vegetable oil from Maputo's restaurants to avoid halting production completely.

In the best-case scenario, biofuel projects will bring infrastructure improvements that also benefit food producers, while entrepreneurs will invest in improving supply lines from the level of the family farm to a network of transporters, buyers and suppliers.

Ecomoz is working with a community-based organisation, Hende Wayela Energy, to raise productivity on coconut farms in Inhambane and among other plant-oil producers in the region.

"Efficiency will improve across the board," said Lerner. "Managed correctly, it [biofuel] presents an opportunity for poor farmers. It's better to promote sustainable management then to pose problems." She cited the sustainability criteria imposed by biofuel purchasers in the European Union as one way of ensuring community-friendly management practices.

Conflicting interests

But if the recent approval of Mozambique's largest biofuel operation to date is any indication, sustainable management practices are often in the eye of the beholder.

The planned 30,000ha sugarcane plantation and ethanol processing plant, known as Procana, in the district of Massingir, in Gaza Province, near the South African border, has already seen its investor, the multinational Central African Mining and Exploration Company (CAMEC), engaged in fierce debate over water management, land rights and ethical concerns.

The company first clashed with the management of the recently expanded Limpopo Transfrontier Park, a joint conservation initiative between Mozambique, South Africa and Zimbabwe, when international donors and community representatives said land leased to CAMEC by the government had been promised to four communities wishing to escape human-animal conflict in the park.

The second issue was one of water management. The government and CAMEC are in disagreement with farmers, who say the project will monopolise water resources and hamper irrigation development efforts.

Izak Holtzhausen, CAMEC's general manager in Mozambique, said the company would provide between 2,000 and 7,000 jobs, depending on whether cane cutting would be mechanised or done by hand, while water feasibility studies showed adequate supplies.

Procana had experience of working with small-scale farmers, having initiated a storage and distribution company for small maize producers that had purchased and distributed 30,000 tonnes this year, he said, and would also educate family farmers in the area to become suppliers to the plant.

Waiting for the trickle down

Marcos Freire, a project coordinator at the the United States Agency for International Development (USAID)-funded Mozambique Institute of Agrarian Investigation, said it would be difficult for the average Mozambican farmer to participate in a biofuel economy on his own.

"Most small farmers will not have the capital available to produce quality crops; growing sorghum with no irrigation and no fertiliser doesn't work. Instead, big plantations are being set up in provinces where labour is abundant; people will have some income every month and still have time to work on their own crops. I think it's safe."

He said the biggest effect would be felt in the cities, where food prices were likely to rise, but this was not necessarily a bad thing. "The paying price to the small farmer will also go up. Small farmers will only change crops if they're absolutely sure they can sell, and the price is good."

Lerner agreed. "If done sustainably, Mozambique will make a lot of money on biofuels, but they need to ensure inclusive growth."

Published with the permission of IRIN
Disclaimer: This report does not necessarily reflect the views of the United Nations or Mike Hitchen Consulting
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