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SCOPING EXERCISE (SITUATION ANALYSIS) ON THE BIOFUELS INDUSTRY WITHIN AND OUTSIDE
TANZANIA
(FINAL DRAFT REPORT)
October 2008 Submitted by: Energy for Sustainable Development Plot #19 Manara Road, Ada Estate, Kinondoni P.O. Box 8694 Dar es Salaam, Tanzania Phone: 022 266 7758
Study Report- Situational Analysis on Biofuels Industry within and outside Tanzania iii
Project Scoping Exercise (Situation Analysis) on the Biofuels Industry Within and Outside Tanzania
Location Tanzania
Client WWF – Tanzania Programme Office
Contact Peter Sumbi
Report versions
Final Draft October 14th 2008
Author: Francis Songela and Andrew Maclean
Signatures
Date October 14th 2008
QA: Jeff Michael Felten
Signature
Date October 14th 2008
Contact details Energy for Sustainable Development / Tanzania
Plot #19 Manara Road, Ada Estate, Kinondoni, Dar es Salaam
T: +255 (0) 22 266 8497
Study Report- Situational Analysis on Biofuels Industry within and outside Tanzania iv
TABLE OF CONTENTS
EXECUTIVE SUMMARY .........................................................................................................vii
LIST OF ABBREVATIONS.........................................................................................................x
1.0 Background..............................................................................................................................1
1.1 What are Biofuels?...........................................................................................................1 1.2 The Study...........................................................................................................................1 1.2.1 Study Objectives .......................................................................................................2 1.2.2 Study Methodology...................................................................................................2 1.2.2.1 In-depth Literature Review ...............................................................................2
1.2.2.2 Structured Interviews......................................................................................2 1.2.2.3 Strength, Weakness, Opportunities and Threat (SWOT) Analysis ..........2 1.2.2.4 Stakeholders’ Workshop ..................................................................................2
2.0 Biofuels Worldwide .................................................................................................................3
2.1 Global Trends ...................................................................................................................3 2.1.1 European Union (EU) Sustainability Standards..................................................4 2.1.2 Sweden........................................................................................................................5 2.1.3 Germany......................................................................................................................5 2.1.3 Brazil ............................................................................................................................5 2.1.4 USA ..............................................................................................................................7
2.1.5 Malaysia and Indonesia ...........................................................................................7 2.1.6 Thailand ......................................................................................................................7
2.1.7 India .............................................................................................................................8 2.2 Regional Trends ...............................................................................................................8 2.2.1 Mali ...............................................................................................................................8 2.2.2 Nigeria .........................................................................................................................8 2.2.3 Ethiopia .......................................................................................................................8 2.2.4 South Africa ...............................................................................................................8 2.2.5 Malawi..........................................................................................................................8 2.2.6 Mozambique ...............................................................................................................9 2.2.7 Kenya...........................................................................................................................9
3.0 Biofuels Development in Tanzania........................................................................................10
3.1. Why Biofuels in Tanzania?..........................................................................................10 3.2 Potential for Biofuels Production in Tanzania .........................................................11 3.3. Potential Feedstock for Biofuels Production ..........................................................11 3.3.1 Feedstock for ethanol production .......................................................................12 3.3.2 Feedstock for biodiesel production ....................................................................13
3.4 Status of Private Sector Investment on Biofuels.....................................................15 3.4.1 Large scale investment..........................................................................................15 3.4.1.1 D1 Oils Plc .........................................................................................................15 3.4.1.2 Sun Biofuels Tanzania Limited .....................................................................15
3.4.1.3 PROKON BV ......................................................................................................15 3.4.1.4 Farming for Energy for better Livelihoods in Southern Africa (FELISA)..........................................................................................................................................16
3.4.1.5 Kikuletwa Farm.................................................................................................16
3.4.1.6 Africa Biofuel and Emission Reduction Company (Tanzania) Ltd.........16 3.4.1.7 Donesta Ltd and Savannah Biofuels Ltd.....................................................17 3.4.1.8 Bioshape Tanzania Ltd ...................................................................................17
Study Report- Situational Analysis on Biofuels Industry within and outside Tanzania v
3.4.1.9 InfEnergy Ltd ....................................................................................................17
3.4.1.10 BioMassive ......................................................................................................17 3.4.1.11 SEKAB BioEnergy Tanzania Limited .........................................................18 3.4.1.12 Other Large Scale Projects ..........................................................................18
3.4.2 Small Scale Projects and Related Support Organizations .............................19 3.4.2.1 Diligent Tanzania Limited ...............................................................................19 3.4.2.2 Kampuni ya Kusambaza Teknolojia Limited (KAKUTE)...........................19 3.4.2.3 The Tanzania Traditional Energy and Environment Development Organization (TaTEDO)................................................................................................19 3.4.2.4 Jatropha Products Tanzania Limited (JPTL) ..............................................19 3.4.2.5 Environmental, Human Rights Care and Gender Organization (Envirocare)....................................................................................................................19
3.5 Status of Local Consumption of Biofuels .................................................................20 3.5.1 Transport ..................................................................................................................20 3.5.2 Rural Electrification ................................................................................................20 3.5.3 Cooking .....................................................................................................................21 3.5.4 Soap Making.............................................................................................................21
4.0 Policy Framework for Biofuels Development in Tanzania ..................................................21
4.1 Existing Legal Framework............................................................................................22 4.1.1 Policies......................................................................................................................22 4.1.1.1 Energy Policy (2003)........................................................................................22 4.1.1.2 National Land Policy (1995) ...........................................................................23 4.1.1.3 Environmental Policy (1997) ..........................................................................23 4.1.1.4 Agricultural and Livestock Policy (1997) ....................................................24 4.1.1.5 Transport Policy (2003)...................................................................................24 4.1.1.6 National Forest Policy (1998).........................................................................24 4.1.1.7 Other relevant policies....................................................................................25
4.1.2 Acts and Regulations .............................................................................................25 4.1.2.1 Revised Petroleum Act (2008) .......................................................................25 4.1.2.2 Land Act (1999).................................................................................................25 4.1.2.3 Village Land Act (1999) ...................................................................................27 4.1.2.4 Tanzania Investment Act (1997). ...................................................................27 4.1.2.5 Environmental Management Act (2004).......................................................27 4.1.2.6 The EIA process under NEMC .......................................................................28 4.1.2.7 Forest Act (2002) ..............................................................................................30 4.1.2.8 Land Use Planning Act (2007) .......................................................................30 4.1.2.9 Other relevant acts and regulations.............................................................30
5.0 Strengths, Weaknesses, Opportunities and Threats (SWOT) Analysis...............................31
5.1 Biofuels ............................................................................................................................31 5.1.1 Ethanol ......................................................................................................................31 5.1.2 Biodiesel ...................................................................................................................31
5.2 Ethanol feedstock ..........................................................................................................32 5.2.1 Sweet Sorghum .......................................................................................................32
5.2.2 Cassava.....................................................................................................................33 5.2.3 Sugarcane.................................................................................................................33
5.3 Biodiesel feedstock .......................................................................................................33 5.3.1 Jatropha ....................................................................................................................34 5.3.2 Palm Oil .....................................................................................................................34 5.3.3 Croton megalocarpus.............................................................................................35
5.4 Biofuels and Issues .......................................................................................................35 5.4.1 Biofuels and Land ...................................................................................................35 5.4.2 Biofuels and the Environment ..............................................................................36
Study Report- Situational Analysis on Biofuels Industry within and outside Tanzania vi
5.4.3 Biofuels and the Social Economy........................................................................37 5.4.4 Biofuels and Government .....................................................................................37
6.0 Issues of Concern about Biofuels within Tanzania ..............................................................38
6.1 Coordination of Policy within Tanzania.....................................................................38 6.2 Environmental Impacts .................................................................................................40 6.2.1 Feedstock Production ............................................................................................40 6.2.1.1 Energy Balance ................................................................................................40 6.2.1.2 Greenhouse Gases ..........................................................................................40 6.2.1.3 Genetically Modified Organisms (GMOs)....................................................40 6.2.1.4 Soils ....................................................................................................................41 6.2.1.5 Forests and Biodiversity ................................................................................41 6.2.1.6 Water Catchments ...........................................................................................42 6.2.1.7 Indirect Land Use Change (ILUC) .................................................................43 6.2.1.8 Discharge of Effluent from Processing of Biofuels ..................................44
6.3 The EIA Process .............................................................................................................44 6.4 Food Security..................................................................................................................45 6.5 Land Use and Ownership .............................................................................................45 6.6 Land Acquisition Process ............................................................................................45 6.7 Displacement of Communities ....................................................................................46 6.8 Community Relations and Rural Development........................................................46
7.0 Key Policy Recommendations ...............................................................................................47
7.1 Coordination ...................................................................................................................47
7.1.1 Coordination of Biofuels and Forestry Policies ...............................................47 7.1.2 Moratorium on Land Acquisition .........................................................................47 7.1.3 Regulations and Guidelines Set Quickly............................................................47 7.1.4 Certification, Sustainability Criteria and Standards ........................................47 7.1.5 Blending Policy .......................................................................................................48 7.1.6 Detailed Monitoring Procedures ..........................................................................48
7.2 Environment and Biodiversity .....................................................................................48 7.2.1 Strengthen EIA Process under NEMC ................................................................48
7.2.2 Biodiversity and Ecosystem Protection .............................................................48 7.2.3 Protection of Resource Base................................................................................48 7.2.4 Essential Baseline Data .........................................................................................49
7.3 Socio-Economic .............................................................................................................49 7.3.1 Biofuels Partnerships with the Government and NGOs .................................49 7.3.2 Progressive Tax Incentives...................................................................................49 7.3.3 Land Acquisition .....................................................................................................49 7.3.3 Land Use Planning..................................................................................................49 7.3.4 Biofuels Promoted for a Range of Uses .............................................................50 7.3.5 Encourage Sustainable Land Use Practices .....................................................50 7.3.6 Food Security...........................................................................................................50 7.3.7 Rural Development .................................................................................................50 7.3.8 Relationship with the Local Communities. ........................................................50
Annex I: References ....................................................................................................................51
Annex II: Terms of Reference ....................................................................................................53
Annex III: Questionnaire for Structured Interview ..................................................................55
Annex IV: List of Persons Interviewed .....................................................................................56
Annex V: Systems for Promoting Sustainable Development.....................................................59
Study Report- Situational Analysis on Biofuels Industry within and outside Tanzania vii
EXECUTIVE SUMMARY
Liquid biofuels (ethanol and biodiesel) have for quite sometime attracted increasing interest among many countries in the world including Tanzania. Biofuels are promoted as the best substitute for conventional fossil fuels (petrol and diesel). Their reduced carbon emissions compared to fossil fuels, their positive impacts on rural development, together with escalating oil prices from $64 per barrel in 2006 to over $140 in June 2008, are driving forces behind their market development worldwide. Today, there is a rapid expansion of global biofuels markets as many countries introduce ambitious policies to increase the proportion of biofuels in their energy portfolio. If this is to be met, considerable increases in production are rapidly required to satisfy greater global demand. There have been debates worldwide on negative impacts of biofuels production. Many believe the impact of biofuels on competing land uses has led to increasing levels of tropical deforestation and troubling questions about the land rights and displacement of local communities.
Tanzania is one of the countries in Sub-Saharan Africa that depends entirely on imported fossil fuels for local consumption. The Government of Tanzania recognises the importance and need to develop alternative fuels such as liquid biofuels and is providing support at all levels to accelerate investment. Tanzania has potential to produce ethanol using sugarcane as feedstock and biodiesel using Jatropha and oil palm as feedstocks. Today, the GoT is promoting biofuels with ambitious goals to improve energy security (e.g. reducing oil imports and foreign exchange savings), improve livelihoods (e.g. introduction of alternative cash crops to farmers, employment and income opportunities, etc) and promote rural development (e.g. creating new rural industries, improved infrastructures, etc). However, the Government of Tanzania has no policies, strategies and regulations to guide biofuels promotion and investments in the country.
Interest of biofuels investors from within and outside of Tanzania is increasing at an alarming rate. There are more than 10 companies already invested in biofuels in the country. The trend shows that multinational investors/companies are increasing their investments into the cultivation of crops (mainly Jatropha, oil palm and sugarcane) for biofuels production. It is believed that this trend has some serious environmental, social and economical repercussions (e.g. effects on food production, displacement of local communities, land appropriation, forest and biodiversity losses, etc). In view of these concerns the Worldwide Fund for Nature (WWF) – Tanzania Programme Office contracted Energy for Sustainable Development (ESD) Ltd to analyze the impact of the biofuels industry and its existing and potential strengths, weaknesses, opportunities and threats to the environment, biodiversity conservation and socio-economic aspects in Tanzania. The study methodology included an in-depth literature review, stakeholder interviews, SWOT analysis and stakeholders’ workshop. Site visits to biofuels plantations in Coast, Arusha, Kilimanjaro and Lindi regions were conducted.
This report responds to the increasing concerns relative to biofuels investment and production in Tanzania. As such, the report presents areas of potential impact from these investments and gives policy recommendations towards sustainable biofuels investment and production in the country.
Key issues of concerns identified by the study are:
• There is currently no coordination of biofuels policy within Tanzania, although the
Tanzanian Biofuels Task Force is in the process of drawing up policy guidelines. Investors
Study Report- Situational Analysis on Biofuels Industry within and outside Tanzania viii
are able to receive necessary investment, land and environmental approvals to start plantations without any concrete government policy.
• The type of land use changes required to cultivate biofuels is highly important in predicting
the effects that growing feedstock will have on emissions of soil and vegetative carbon. The conversion of large carbon sinks such as tropical forests and wetlands to the cultivation of crops will result in greater emissions of soils carbon and carbon from plant matter than would likely be saved through the replacement of fossil fuels with biofuels.
• GMOs are being developed in order to increase yields to meet biofuels demand and reduce
the need for pesticides. This may result in cross-pollination of wild relatives, thereby affecting biodiversity. Another potential risk is that some of the energy crops may become invasive.
• The uses of agrochemicals in large-scale biofuels plantations will adversely affect soil
health. Nitrogen fertilizers can cause acidification of soils and surface waters. Intensive farming often causes soil erosion.
• Clearing of large areas of natural forest habitats to give way to biofuels crop farming is a
major concern as more plantations are set up in Tanzania. Currently areas of high biodiversity value that are outside established forest reserves can be cleared for plantations. This includes coastal forests and miombo woodlands. Coastal forests have a high level of endemism as a result of being separated from other moist forests by savannahs and grassland.
• Water is a scarce resource in many parts of Tanzania. Water used for biofuels could
reduce the amount of water available for other land uses such as food crops, and deplete the local water table. There is also the risk of large scale irrigation projects causing salinisation. This process may occur in irrigated areas which have low rainfall and the concentrations of minerals such as magnesium, sodium and calcium build up in the surface soil.
• Indirect Land Use Change (ILUC) occurs when one form of land use is displaced to another
area. People forced to farm in other areas will need more land for cultivation.
• Effectiveness of the current EIA process under NEMC. Some of the biofuels projects in Tanzania started without approval of EIA. This is due to the lack of coordination within the government and the lack of resources within NEMC.
• The competition between food crops and energy crops has become an international
debate. Growing sugarcane to produce ethanol, for example, may result in land area devoted for food production being reduced, eroding local food security and causing shortages. Price increases for some biofuels crops that are also staple foods place food security at risk, raising prices and increasing, rather than decreasing, poverty. This is likely to happen if it is more profitable to sell food crops to biofuels producers.
• For a viable biofuels industry, the land must also be capable of supporting sufficiently high
crop yields for production in order to be economic. The need for arable land in growing feedstock for biofuels may threaten the land available for growing food crops.
• Transparency in land acquisition process. Currently communities may not be aware of their
land rights nor the impact that selling the land will have on their livelihoods in the long term.
• Large-scale biofuels introduction may force communities out of their territories. Loss of their territories will have long-term opportunity costs for farming communities.
Study Report- Situational Analysis on Biofuels Industry within and outside Tanzania ix
Key policy recommendations are:
• Proper coordination of biofuels related Ministries and policies
• Until the Government’s investment guidelines are published, the NBTF should issue a moratorium on all biofuels investments related to land acquisition and land clearing. Private investors should be clearly informed of this moratorium.
• Bio-energy development could be used to focus energy into improving the rigor of EIA's and encourage sustainable development in Tanzania. NEMC should make available the list of EIA consultants to the public, encourage greater public engagement, and use an independent expert panel to assess EIA, etc.
• Areas of High Conservation Value should be set aside as no-go zones. These include ecologically sensitive areas, areas that provide critical ecosystem services, areas critical to local communities’ traditional cultural identity, etc.
• Effective monitoring of pollutants should be carried out by biofuels companies. This should
include monitoring for nitrogen and other pollutant levels present as a result of pesticide and fertilizer use. Perennial crops are likely to have far less impact on soil health.
• The land acquisition process should be more transparent and needs to be coordinated more effectively on a national basis. In order for the land acquisition process to be more transparent, TIC’s database of potential land available for biofuels investor should be made public and easily accessible. Adequate compensation for land is also required.
• Areas set aside for biofuels plantations should be subject to a land use plan. More funding
should be available to prepare, monitor and implement land use plans, which should be developed as a precursor to project approval.
• Promote local consumption of biofuels for such uses as Multi Functional Platform, domestic energy for cooking, and local transport. Project developers should be encouraged to effectively use all by-products.
• Put policies in place that ensure that food security is not adversely affected by biofuels. Biofuels policy should take into account long term goals of greater food security within Tanzania.
• In order to promote rural development out-growers schemes should be promoted whenever
possible. Biofuels companies and appropriate government bodies should provide increased technical assistance and support to potential out-growers.
• Promises made to the communities need to be written down in legally binding documents.
All community members should be involved in the decision making processes (not just village council members).
• Government blending policy should be 10% ethanol in petrol and 20% biodiesel in diesel
fuel, progressively implemented to achieve these targets by 2018. This will facilitate local consumption of biofuels.
• The Government needs to require transparency from biofuels investors due to their obvious impacts on rural communities and the environment. Stringent technical and financial reporting standards – submitted quarterly to all necessary on-line Ministries – would lead to wider knowledge sharing and greater collaboration within the Government.
Study Report- Situational Analysis on Biofuels Industry within and outside Tanzania x
LIST OF ABBREVATIONS
CBO -Community Based Organization
CFC -Community Finance Company
EACF -East Africa Costal Forests
EIA -Environmental Impact Assessment
EMA -Environmental Management Act
Envirocare -Environmental, Human Rights Care and Gender Organization
ESMAP -Energy Sector Management Assistance Programme
EU -European Union
FAO -United Nations Food and Agriculture Organization
FELISA -Farming for Energy for better Livelihoods in Southern Africa
FFVs -Flexible Fuel Vehicles
GHG -Greenhouse Gases
GTZ -German Technical Cooperation
Gl -Gigalitre
GoT -Government of Tanzania
Ha -Hectares
HCV -High Conservation Value
IEA -International Energy Agency
ILUC -Indirect Land Use Change
JPTL -Jatropha Products Tanzania Limited
KAKUTE -Kampuni ya Kusambaza Teknolojia
Kg -Kilograms
Lts -Litres
M -Metre
MAFS -Ministry of Agriculture and Food Security
MAFC -Ministry of Agriculture, Food and Cooperatives
MEM -Ministry of Energy and Minerals
MFC -Mali Folkcentre
MFP -Multi-Functional Platform
Mha -Million hectares MLHS -Ministry of Land and Human Settlement
MNRT -Ministry of Natural Resources and Tourism
NEMC -National Environmental Management Council
Study Report- Situational Analysis on Biofuels Industry within and outside Tanzania xi
NBTF -National Biofuels Task Force
NGO -Non-governmental Organization
NSGRP -National Strategy for Growth and Reduction of Poverty
PFM -Participatory Forest Management
ProBEC -Programme for Biomass Energy Conservation
RLDC -Rural Livelihood Development Company
TaTEDO -Tanzania Traditional Energy Development and Environment Organization
TIC -Tanzania Investment Centre
Tshs. -Tanzanian Shillings
UK -United Kingdom
UNDP -United Nations Development Programme
UNEP -United Nations Environment Programme
UNIDO: -United Nations Industrial Development Organization
URT -United Republic of Tanzania
USA -United States of America
US$ -United States Dollar
VAT -Value Added Tax
VPO -Vice President’s Office
WB -World Bank
WHO -World Health Organization
WTO -World Trade Organization
WWF -Worldwide Fund for Nature
Study Report- Situational Analysis on Biofuels Industry within and outside Tanzania xii
1
1.0 Background
1.1 What are Biofuels?
Biofuels are defined as energy carriers derived from the conversion of biomass to provide sustainable inputs for heat, power and transport applications. Biofuels can be liquid, solid or gaseous. The principle sources of biomass are agriculture and forestry. (UNIDO, 2004) Biofuels (especially liquid biofuels) have for quite some time been promoted as a best substitute for conventional fossil fuels (petrol and diesel). Two primary liquid biofuels in use today are ethanol (currently produced from sugarcane, sugar beets, corn, wheat, sorghum, etc) and biodiesel (currently produced from oil seeds such as such as rape, sunflower, Jatropha, soya, palm and coconut or animal fats), both of which can be used to run existing vehicles. Up to a certain extent, ethanol can be blended with petrol while biodiesel can be blended with petroleum-based diesel for use in conventional diesel-fuelled vehicles.
The liquid biofuels industry started back in the early 1970s (particularly the successful biofuels programme launched in Brazil in 1975). It is only in the last five years or so, however, that liquid biofuels have started to be seen as a serious alternative to oil worldwide. Their reduced carbon emissions compared to fossil fuels, their positive impacts on rural development, together with escalating oil prices from $64 per barrel in 2006 to over $140 in 2008, are driving forces behind their market development worldwide. Today, there is a rapid expansion of global biofuels markets as many countries introduce ambitious policies to increase the proportion of biofuels in their energy portfolio. If this is to be met, considerable increases in production are rapidly required to satisfy greater global demand. The most important example is the EU’s goal of 5.75 percent biofuels content in the fuel transportation blend by 2010, and their aim to extend this to 10% renewable energy in transportation by 2020 (Biopact, 2007) . Global biofuels production is estimated to be over 35 billion litres, dominated by the USA and Brazil. Large increases in production volumes are expected in Brazil, USA, EU, China, India, Indonesia, Malaysia and Africa.
The recent trend towards embracing substantial increases in biofuels production as a response to high oil prices and increasing awareness of climate change has not gone unchallenged. As world food prices have jumped in the past year questions have been raised about the wisdom of devoting the necessary land acreage and water resources to producing biofuels. The World Bank has stated that rising food prices could push another 100 million people into deep poverty, indicating that biofuels demand was a “significant” factor in food price increases1. Moreover, all biofuels are not created equal. An important metric now used to analyse all biofuels is their 'net energy balance,' or the amount of energy input required to grow and to produce refined and usable fuel. Finally, many believe the impact of biofuels on competing land uses has led to increasing levels of tropical deforestation (itself a driver of climate change) and troubling questions about land rights and the displacement of local communities.
1.2 The Study
The Worldwide Fund for Nature’s mission includes “ensuring that the use of renewable natural resources is sustainable now and in the longer term” and “promoting the reduction of pollution and wasteful exploitation and consumption of resources and energy”. Biofuels2 development has both direct and indirect impacts on WWF’s interventions on the ground. For this reason, and with the emerging concerns associated with biofuels development, WWF – Tanzania Programme Office has sub-contracted Energy for Sustainable Development (T) Ltd to conduct a situational analysis on the status of the biofuels industry in Tanzania, Africa and globally. Although several existing studies offer an overview of biofuels production in Tanzania, no study has provided a clear analysis
1http://web.worldbank.org/WBSITE/EXTERNAL/EXTSITETOOLS/0,,contentMDK:21845834~pagePK:98400~piPK:
98424~theSitePK:95474,00.html
2 The study focused on liquid biofuels rather than other forms of biofuels such as gaseous and solid.
2
of the environmental, social, economic and ethical concerns (e.g. effect on food production, displacement of local communities, land preparation) nor developed policy guidelines and criteria for sustainable biofuels production. This study summarizes existing knowledge on sustainable biofuels development while filling these key analytical gaps and providing important, practical policy guidance.
1.2.1 Study Objectives
The purpose of this study is to analyze the impact of the biofuels industry, globally and with particular emphasis in Tanzania. The study will examine the industry's existing and potential strengths, weakness and opportunities, as well as the threats it poses to the environment, biodiversity conservation, the agricultural economy and local communities. The study provides a detailed situational analysis of potential domestic investments in the biofuels sector, including the advantages and disadvantages of selected investments, investment guidelines and criteria, and biofuels development best practices. This analysis will aid relevant decision makers in making informed decisions regarding biofuels investments in Tanzania. 1.2.2 Study Methodology
Four approaches were used for collecting the information and data for this study. They are: • In-depth literature review; • Structured interviews with key sector stakeholders; • Strength, weakness, opportunities and threat (SWOT) analysis; and • Stakeholders’ workshop.
1.2.2.1 In-depth Literature Review
Documents related to biofuels development in Tanzania and around the world were studied in order to have a broad understanding of the sector. Policy documents were obtained from the relevant Tanzanian ministries (MEM, MAFC, VPO, MLHS, MNRT, etc) and reports on previous biofuels studies in Tanzania were obtained from the internet and from organizations/companies conducting the studies (e.g. Envirocare, TaTEDO, Diligent, RLDC, etc). Data and information on global biofuels development were obtained from the internet.
1.2.2.2 Structured Interviews
Questionnaires were used to collect specific information from stakeholders not available in the existing literature. Interviews were conducted with key government officials from the Ministries of Agriculture, Energy and Minerals, Lands, Finance, Environment, Natural Resources and Tourism. Members of the National Biofuels Task Force and officials from Tanzania Investment Centre (TIC) were also engaged, as were government authorities from Kisarawe, Kilwa and Meru Districts. Interviews were also conducted with the directors of biofuels companies investing or planning to invest in Tanzania, officials from NGOs, CBOs and representatives from the local communities most likely to be affected by biofuels projects. 1.2.2.3 Strength, Weakness, Opportunities and Threat (SWOT) Analysis SWOT is a strategic planning tool used to evaluate strengths, weaknesses, opportunities and threats primarily in business. The SWOT analysis was used in this study to evaluate different potential biofuels feedstocks as well as biofuels development in relation to impacts on the environment and social welfare in Tanzania. 1.2.2.4 Stakeholders’ Workshop A workshop bringing together many of the stakeholders currently active in the Tanzanian biofuels industry was held in Morogoro in June 2008. At that workshop, the consultant team presented their initial findings and received feedback from the stakeholders. That feedback was then incorporated into this final report.
3
2.0 Biofuels Worldwide
2.1 Global Trends The world is on the verge of an unprecedented increase in the production and use of biofuels. Decisions made today will determine the positive and negative impacts of biofuels for a long time to come. Globally, more than 30 countries have launched ethanol fuel programs
3.
A major driver for the increased production and demand of biofuels is the increase in oil price, at greater than $140 per barrel in June 2008. Although bioethanol produced from Brazilian sugar cane remains economically feasible if the price of oil remains above $50 US per barrel, other biofuels are more costly to produce and thereby require a consistently higher oil price threshold in order to be economically competitive. A second driver for the increase in biofuels production and use is the heightened worldwide concern for global climate change. The use of petroleum products for transport and power generation is the most important contributor of Greenhouse Gas (GHG) emissions into the atmosphere. Few people today disbelieve that worldwide economic growth and the galloping consumption of fossil fuels is creating a layer of pollutants in the atmosphere, trapping the sun’s heat and steadily warming the planet with potentially disastrous environmental and economic consequences. Theoretically, by substituting petroleum products with biofuels, emission reductions can be realised. In order to understand the full impact of biofuels on climate change, however, one must consider the 'net energy balance' of the particular biofuels in question. The term ‘net energy balance’ refers to the amount of energy provided by a source, after taking into account the amount of energy required to produce and deliver that source to the ultimate consumers. For example, when assessing the energy balance of ethanol derived from corn, one must consider the energy required to grow the corn, including the energy required to produce the fertilizer. The net energy balance is highly important in determining the extent to which a particular biofuel actually reduces emissions of greenhouse gases (if at all). If, for example, the biofuel is made from low yielding crops that need high inputs of petroleum based fertiliser they actually could generate more GHG than do the petroleum fuels they are designed to replace. Even in the face of these potential limitations, biofuels are also attractive as an opportunity for increasing economic development in many developing countries, due largely to the abundant availability of land and cheaper costs of labour. This is very important in Africa in general and Tanzania specifically, where in spite of impressive economic growth rates over recent years, the vast majority of the population is mired in abject poverty. Many see the cultivation of cash-crops for biofuels production as a new opportunity for rural income generation on a large scale. But even the economic potential of biofuels is not so straightforward. In many cases, growing crops for energy creates competition with food crops for land and resources. This is particularly true when the biofuel feedstock is also a food crop. Overall increased reliance on biofuel is seen by many as a major threat to global food security. For example, the price of corn has more than doubled in the last two years, boosted in part by the demand for ethanol as shown by the figure on the right. World Bank President Robert Zoellick acknowledged that the demand for ethanol and other biofuels is a "significant contributor" to soaring food prices
3 F.O Licht, World Biodiesel Markets: The Outlook to 2010 (2007), at 34.
Figure 1: Booming price of corn.
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around the world (Guardian (UK), May 07). It is not the only cause, however, as droughts, financial market speculators, increased demand for food and especially sky-rocketing world oil prices are also major contributors. A second critical ethical concern involves the clearing of forest for the cultivation of biofuels. This is important in Tanzania, where we see many investors targeting land currently covered by coastal forest. Forests are natural carbon sinks, locking carbon in place for decades or centuries. When forests are cleared and the wood consumed as a biomass fuel the carbon is released into the atmosphere as CO2, greater than three tons of CO2 for every ton of carbon burned. The climate impact from replacing healthy forest with a monoculture biofuel crop is actually two-fold, as carbon from the cut forest is released, and less atmospheric CO2 is absorbed by the biofuel crop than by the healthy forest. Once again, the question of net energy balance needs to be considered. Are biofuels really environmentally-friendly if they are displacing forested land? The answer in most cases is no. Let us now look at some of the policy drivers of the recent biofuel boom. 2.1.1 European Union (EU) Sustainability Standards
The EU is the world’s top producer of bio-diesel, accounting for 4.5 billion litres (72%) of global production. Favourable fiscal and regulatory policies have helped to increase this production. In the hope of reducing GHG emissions and diversifying the energy market, the EU has set a target of 5.75% market share for biofuels by 2010. Additionally, they are seeking to increase this to a more general 10% renewable energy target in transport by 2020. These targets are currently under review and may be changed to speak more generally of renewable energy rather than biofuels. At the time of writing this report, the UK was due to publish ‘The Gallagher Report’, which will assess the socio-economic and environmental effects of biofuels. Many members of the EU are beginning to have reservations about their biofuels targets, and are in the process of drawing up sustainability standards. One such biofuel sustainability proposal, the Cramer Criteria, was written in consultation with the oil company Royal Dutch Shell, Unilever and a consortium of Dutch organisations, and suggested that Holland only import biofuels from feedstock that are put under a “track and trace system” (Biopact 2007) and that the production of biofuels adheres to specific criteria, covering the following:
Box 1: Summary of the Cramer Criteria Food Security 'Food security': There should be no local food scarcity in the location from which the biomass is sourced, nor scarcity of energy, medicines and building materials because of biomass production. Nature and Biodiversity Biomass importing companies must report on the effects of biomass production on biodiversity; there should be no impacts on 'valuable' protected nature reserves and conservation areas. CO2 Balance of Fuel The 'net energy balance' is calculated across the entire production and transportation chain (field to fuel tank/power plant, including CO2 released during transport from the South to the Netherlands). For biofuels used for electricity production, a minimal CO2 reduction of 50% must be obtained; for liquid biofuels a minimal reduction of 30%. Welfare and Wellbeing Biomass importers must report on the social effects of the biomass they source or produce in the host country; basic local rights must be respected. Labour Labour conditions must conform to local laws, and workers must have the right to organise themselves in a union. Environmental Care Biomass producing companies must abide by all local environmental laws with regard to pollution, noise, odour and emissions control and fertiliser management. Soil Quality and Nutrient Balances All biomass producers must comply with local regulations dealing with the preservation of soil quality. Moreover, they may not contribute to soil erosion and must even improve the quality of soils. Water Quality All biomass producers must comply with local laws regarding water quality.
Source: Biopact (2007a)
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However, these criteria are silent on Environmental Impact Assessment (EIA) and adherence to other laws relevant in the supplying countries. There is an ongoing debate in the EU parliament about placing a moratorium on the 10% renewable energy in transport target. A Swedish MEP (a member of the EU Parliament), Anders Wijkman, recently declared the need for a slower pace in regards to promoting biofuels in order to avoid negative effects4. Germany, the UK and Poland are asking for greater flexibility in reaching their renewable energy targets. Italy is calling for a new method to calculate a country’s renewable energy proportion while simultaneously arguing that the 10% biofuels target should be reduced (Euractiv, 2008). 2.1.2 Sweden Sweden has utilized ethanol since the 1990s. Ethanol use was initially promoted in order to meet the environmental requirements for cleaner fuels. Five hundred urban buses were introduced at the time, running on a blend of 95% hydrous ethanol and 5% ignition additive known as “beraid” (Worldwatch Institute, 2007). According to the Swedish governments own web page5, there are now in Sweden;
• 1,050 fuel stations selling ethanol, • 90,000 flexible-fuel cars that can run on etanol, • 600 urban buses run on ethanol.
2.1.3 Germany Germany relies on both biodiesel and bioethanol. In 2006, Germany was producing 50% of the world’s biodiesel, made from rapeseed. This amounted to 3 billion litres (European Biodiesel Board 2008). Favourable tax schemes are responsible for promoting biodiesel, as the fuel was exempted from excise tax until 2006. Having increased production there is now a plan to increase the required blend. Germany has a 1.2% blending mandate (E1.2) which is expected to grow to 3.6% by 2010. Suppliers will be penalised for not meeting this requirement (F.O. Licht, 2007). In 2006, Germany produced 765 million litres of ethanol. 75% of this was from grains and 22% from non agricultural resources such as ethylene and the rest from potatoes and sugar beets. There are plans to increase this production, concentrating on sugar beet as the main feedstock. 2.1.3 Brazil Brazil has been a pioneer in bioethanol production and consumption. The government has supported bioethanol from sugar cane since the 1970s, after the OPEC-induced oil price hikes of that decade. Sugar cane is the main feedstock and Brazil is the number one cane producer in the world, with the sugar cane industry employing one million people. The size of the domestic market was 18 billion litres of ethanol in 2007, expanding to possibly 50 billion litres by 2020. One billion litres of biodiesel will be consumed in 2008. Flexible-Fuel Vehicles (FFVs) in Brazil can use different mixtures of ethanol and petrol. Competition between ethanol and food crops in Brazil is questionable. In the country only 1% of arable land is used for sugarcane production (ethanol), while land available for agricultural expansion is 50% greater than lands currently occupied with crops (90 Mha against 60 Mha). A report produced by the International Energy Agency (IEA) on the bioethanol industry in Brazil concluded that the biofuel industry offers a positive 'net energy balance,' ranging from 8.3 to 10.2 (meaning 8.3 joules of energy out for every one joule input; IEA 2006). Additional studies in the future will assess the depletion of carbon in the soil, biodiversity, food security and land use
4 http://english.wijkman.se/default.asp?id=154
5 http://www.regeringen.se/sb/d/10036/a/96193)
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Box 2: Brazil’s “Social Fuel Seal” The Social Fuel Seal is part of Brazil's new national bio-diesel programme. It was designed specifically to address some of the problems that had previously been experienced in the ethanol industry. The system takes into account regionally determined social inequalities and the geographically specific agro-ecological potential for biodiesel feedstock production. It could become a model for other developing countries aiming to launch biofuel programs. Tax breaks are used to encourage biodiesel producers to conform to the criteria of the Social Fuel Seal, and a full tax exemption is given for those who source their feedstock from the poorest category of farmers in the most problematic regions. This tax break can be for up to US$ 110 per ton. Several major biodiesel producers in Brazil have joined the program, testimony to the fact that the Social Fuel Seal's regionally and socially determined tax break scheme is being accepted. Obtaining the Social Fuel Seal: There are costs involved for the biodiesel producer to weigh against the benefits of the tax break. The following strict criteria must be followed:
• Enter into formal contracts with the feedstock producers and follow a strict contract negotiation procedure.
• Allow the presence of a rural union representative during all negotiations. • Provide clearly described extension services, technical assistance and agricultural training aimed at
helping the farmer increase production, not only of biofuel feedstock, but of an integrated fuel-and-food production system. These services can be provided by the biofuel producer or outsourced to trustworthy (and certified) institutions.
• Allow for a yearly evaluation of the project by external agencies, managed by the Ministry of Rural Development
The Brazilian government hopes that, as biodiesel prices (tied to oil prices) and consequent profits stand today, the tax incentives will encourage growing numbers of biodiesel producers to choose the Social Fuel Seal and the costs that go with it (extension services, training, etc...).
Source: Biopact (2007)
dynamics (Biopact 2006). On the question of land use and biodiversity impacts, the head of the UN Environment Programme has warned that increased growth of the sugarcane ethanol industry in Brazil could increase tropical deforestation in the Amazon.6 In addition, the expansion of sugar cane and soya beans does threaten the future of both the Pantanal and the Cerrado eco-systems in Brazil. The extent of this threat will depend on how biofuels operations are carried out in the future. Some additional criticism of Brazil’s sugar cane industry has been made due to the inequitable sharing of profits among Brazilians. In response, the Brazilian government is now introducing legislation that provides secure livelihoods to poor farmers. The “Social Fuel Seal” will offers tax breaks to companies that buy their feedstock from poor farmers. More details are given in Box 2.
6 http://www.msnbc.msn.com/id/17500316/
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Figure 2: Corn production for ethanol
production in the United States.
Source:ioage.typepad.com/.../uncategorized/corn1_1.png.
2.1.4 USA
The US is now the world leader in bioethanol production, recently overtaking Brazil. Maize is the main feedstock for ethanol. Production was estimated at 18 billion litres in 2006 and 23 billion litres in 2007. In 2007, the US Congress passed an ambitious new ethanol mandate, requiring over 56 billion litres of ethanol in the fuel supply by 2015. The US Department of Energy has also started an initiative for cellulosic ethanol. The US biodiesel industry is much smaller, producing one billion litres in 2006.
2.1.5 Malaysia and Indonesia Malaysia and Indonesia account for 84% of global palm oil production. Palm oil has been the main cause of deforestation in this region together with timber trade and pulp and paper, resulting in the loss of 10 million hectares of primary rainforest. This has resulted in palm oil being named as “one of the most environmentally damaging commodities on the planet” according to Simon Counsell of the UK based Rainforest Foundation. New palm oil plantations are often established in primary rainforest rather than previously-cultivated agricultural land, as the soil productivity is higher and timber can be cut and sold for investment capital. Palm oil plantation expansion poses major threats to endangered biodiversity and mega fauna such as the Asian elephant, the Sumatran rhinoceros and tigers. The most well known threatened species is the orangutan, with some observers predicting that this species could be driven to extinction within the next 10 years. In response to these serious biodiversity impacts from palm-oil production, in 2001 WWF helped to create the Roundtable on Sustainable Palm Oil, which has developed a series of principles and criteria to guide palm oil production to minimise impacts to biodiversity, forests and local communities. The principles are described in more detail in Annex V of this study. 2.1.6 Thailand Thailand has abundant agriculture resources which position it to have good potential for the production of biofuels to meet its energy demands and for export. The government has initiated a two phase gasoline-ethanol blending programme (Phase I (2004 – 2006) and Phase II (2007 – 2012)). The government has initiated a blending plan of using 10% ethanol in all government vehicles and aims to increase gasohol consumption to 20 million litres by 2011. So far, the government has awarded licences to 18 new biodiesel plants; this will lead to a total installed capacity of 30 million litres per day by 2012. In 2006 Thailand produced 150 million litres of bioethanol. The main feedstocks are sugarcane, molasses and cassava. The biodiesel industry is in its infancy stage. The government is planning to install biodiesel plants with a capacity of 8.5 million litres per day 2012 so that B10 (10% biodiesel in diesel) can meet the national diesel demand which will be 85 million litres per day by 2012. Earmarked crops for biodiesel production are Jatropha and palm oil.
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2.1.7 India India is the fourth largest ethanol producer after Brazil, the United States and China. In 2006, annual average ethanol production was estimated to be 1,900 million litres. The main feedstock for ethanol has been molasses and sugarcane. A 5% blending policy for part of country will increase to 10% in October 2008. For a 5% ethanol blend in petrol nationally, the ethanol required would be 640 million litres of ethanol in 2006-2007 and 810 million litres in 2011-2012. Like other countries, the biodiesel industry in India is still in its infancy. India's proposed feedstocks for biodiesel production are Jatropha and Pongamia. Biodiesel production of 100 million tons was registered in 2007. The government has formulated an ambitious National Biodiesel Mission to meet 20 per cent of the country’s diesel requirements by 2011-2012.
2.2 Regional Trends
2.2.1 Mali Mali is an agricultural country with huge biofuels production potential. The best known liquid biofuels in Mali are Jatropha oil and ethanol. The first experience in Mali with ethanol dates back to 1989 whereby an unsuccessful attempt was made by a sugar production company to run a diesel engine with a 6% blend of ethanol. Biofuels programmes have been limited to cultivation of Jatropha, extraction of oil from seed, and small scale production and utilization of pure Jatropha oil as fuel for transport, rural energy services provision and rural electrification. Mali-Folkecentre (MFC) has been developing “energy service centres”. These are twenty-hectare Jatropha plantations providing local energy for activities such as millet grinding and battery charging through Multi-Functional Platforms (MFP). Organized commercial production of pure Jatropha oil and its refining into biodiesel has not yet been done in Mali. 2.2.2 Nigeria Nigeria has produced ethanol since 1973 and is currently planning to adopt a 10% blending policy. This is mainly from cassava from which the country has achieved high yields of 15 tons per hectare. Nigeria Yeast & Alcohol Manufacturing produced 30 million litres in 2006. The government plans to build a $200 million ethanol plant, with an annual production of 30 million tons. 2.2.3 Ethiopia Ethiopia currently produces eight million litres per year of bioethanol. Ethiopia’s main feedstock is molasses, the national sugar industry’s main crop. They are aiming to blend 5% ethanol into the country’s petrol pipeline. The UNDP has initiated a project looking at using ethanol for home cooking. The Ethiopian government wants to commit 24 million hectares of land (more than 20%) to Jatropha, although currently there is less than 1,700 hectares committed by plantation developers. 2.2.4 South Africa South Africa accounts for 70% of total ethanol production in Africa and has adopted a National Biofuels Strategy. The Government of South Africa is planning three large biodiesel plants with a total production of more than 300 million litres per year. South Africa has biofuels targets of 2% of petroleum consumption in five years, based on a blending ratio of 2% for biodiesel and 8% for ethanol. It is expected that biofuels will create 25,000 jobs. Sugarcane and sugar beet are the proposed crops for ethanol, with sunflower, rapeseed and soya for biodiesel. Maize and Jatropha seedcake are not being considered for ethanol production. 2.2.5 Malawi Malawi is the only country apart from Brazil that has been blending ethanol at the national level for
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over 20 years. Ethanol production started in 1982 at Dwangwa Sugar Mill, and this was increased in 2004 when the Nchalo Sugar Mill also began to produce ethanol. The combined production of these two totals 30 million litres per year. 2.2.6 Mozambique The Government of Mozambique started to look at biofuels a few years before Tanzania. Policies have not yet been drafted. A World Bank study in 2007 provided a baseline study, highlighting the strengths and weaknesses of biofuels in Mozambique and made suggestions about how the biofuels industry should be promoted. Phase 2 of this study has recently started, with the drafting of a strategy on how the suggestions can be implemented. This will also inform the policy development process (Kristen Kurczak, personal communication). They are aiming to develop draft policies by December 2008. There is an inter-ministerial working group on biofuels led by CEPAGRI, the agricultural promotion centre. A National Land Mapping Exercise was finished in May 2008. 2.2.7 Kenya Biofuels in Kenya started way back in 1978 whereby Agro Chemical and Food Cooperation opened and began producing ethanol from molasses. However, this collapsed in the 1990s due to low government controlled retail prices, resistance from multinational oil companies and inadequate plant maintenance and operation. The current ethanol production in Kenya amounts to about 20 million litres per year, which is being sold on the local market and in Uganda, Rwanda and Central Africa for beverage use. Ethanol has never been used for providing energy services in Kenya. The government of Kenya is also promoting biodiesel focusing on the Jatropha plant for oil production. In May 2008, the Ministry of Energy unveiled a five-year strategy to develop the bio-diesel industry to enable more Kenyans to enjoy and derive comfort from the supply of bio-diesel for agricultural production, employment creation, rural-urban balance and blending in the motor vehicle industry. The strategy includes detailed proposals for the cultivation of the Jatropha shrub as well as the processing of its seeds and the distribution of the resulting bio-diesel for transport and power generation. The government predicts that as a result of biofuels development, by 2012, Kenya’s imports of diesel will have fallen by five percent and the proportion of Kenyans who use kerosene for lighting will have dropped from three-quarters to half of the total population. While the Government of Kenya is promoting biofuels with ambitious target to reduce dependence on imported fuels, there has been recent cause for concern about the impact of biofuels on Kenya’s wetlands. The Kenyan government recently approved a biofuels project that will convert 20,000 hectares of wetlands in the Tana River Delta into sugar cane plantations (Wetlands International 2008, RSPB 2008). The Tana Delta is one of Kenya’s largest wetlands, and contains a variety of habitats, including forests, beaches, lakes, and mangrove swamps. This could lead to at least one third of the water being diverted, with serious implications for local people and wildlife in the area. The wetland supports the livelihoods of thousands of local herdsmen, agriculturalists and fishermen. The project is now blocked.
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Figure3: Growth in Tanzania’s fossil fuels demand
(Source:Envirocare, 2007)
3.0 Biofuels Development in Tanzania
3.1. Why Biofuels in Tanzania? Tanzania is one of the countries in Sub-Saharan Africa that depend entirely on imported fossil fuels for local consumption. With escalating oil prices in the world market, Tanzania has been faced with a rapid increase in the country’s expenditure on oil imports. According to one report (BoT, 2006), the country’s fuel imports have increased tremendously over the years. From 2003 to 2005, fuel imports nationwide increased from US $400.3 million to US$ 1.1 billion. The country’s demand and the price for petroleum products are growing rapidly at a rate of more than 30% per year (GTZ, 2005). Additionally, the figure at right indicates that over the period of 1995 – 2003, petrol and diesel fuel consumption increased on average 4.5% and 3.3% per annum respectively (Envirocare, 2007). This has resulted in the loss of a great deal of foreign currency and causes a heavy burden for the country. The Government of Tanzania (GoT) has realized that the country is over-reliant on imported energy. It recognises the importance and need to develop alternative fuels such as biofuels and is providing support at all levels to accelerate investment (MEM, 2008). Today, the GoT is promoting biofuels with ambitious goals to:
• Improve energy security (e.g. reducing oil imports and foreign exchange savings); • Improve livelihoods (e.g. introduction of alternative cash crops to farmers,
employment and income opportunities, etc.), and; • Promote rural development (e.g. creating new rural industries, improved
infrastructures, etc.). Currently, however, the Government of Tanzania has no policies, strategies and regulations to guide biofuels promotion and investments in the country. In April 2006, the GoT (through the Ministry of Energy and Minerals) established a National Biofuels Task Force (NBTF). The Task Force is responsible for promoting the development of the sector and developing legislation to stimulate the use of biofuels in the country. The Terms of Reference for the task force include:
• Review the existing environment in the biofuels sub-sector [policies, legislation (laws & regulations), strategies, programmes, standards, etc.];
• Prepare an enabling environment to facilitate the sustainable development, promotion and utilization of biofuels in Tanzania;
• Develop well defined, coordinated and integrated modalities and procedures for dealing with the development of biofuels;
• Develop a sustainable programme for the biofuels industry, catering for community, commercial and national interests and linked to economic growth, poverty reduction and economic empowerment, and;
• Prepare modalities for immediate facilitation of biofuels developers/investors. The Task Force has not yet developed any policy guidance, proposed legislation or sustainability principles for the biofuel sector in Tanzania (Investment Guidelines are currently in draft form).
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Total Land area for Tanzania
39Mha
44.4Mha
10.8Mha
No Agric Potential
Potentially Available
for Agric
In use for crop
Production
3.2 Potential for Biofuels Production in Tanzania From the perspective of available land and labour resources, Tanzania has significant potential to produce biofuels and become an international export supplier if high yield biofuel feedstock (such as sugarcane, oil palm, Jatropha curcas, etc), are pursued. Tanzania has an area of 94.5 million hectares, out of which 44.4 million are said to be potentially suitable for agriculture7. A recent study (FAO, 2007) estimated Tanzania to have more than 30 million hectares of land suitable for the cultivation of energy crops, whereby corresponding areas for sugarcane, cereals and root crops are 570,000 ha, 24 million ha and 14 million ha respectively. At the moment, potential crops for biodiesel production in the country are said to be cashew nuts, palm oil, Jatropha, sweet sorghum, coconut and sunflower. As discussed above, however, energy crops like sunflower, cashew, palm oil and coconut are also food crops, raising serious concerns about their appropriateness as feedstock for biofuels production. Globally, biofuels demand continues to grow and is expected to grow further in the future. Because of abundant arable land and cheap labour to produce biofuels, Tanzania can potentially become a competitive biofuels producer, either to replace domestic fossil fuels or for export to developed countries. The estimated cost of producing ethanol from sugarcane as feedstock is Tshs. 351 (US$ 0.276) per liter (Philip, 2007), which is lower than the corresponding production cost in the USA, estimated to be US$ 0.390 per liter (Von Lampe, 2006). Also, the cost of producing biodiesel using Jatropha as a feedstock is estimated to be Tshs. 648 (US$ 0.510) per litre (Philip, 2007), again lower than production costs in Europe and USA which are estimated to be US$ 0.607 and US$ 0.549 per liter respectively (Von Lampe, 2006). Tanzania has the potential to produce approximately 4,010 and 1,726 million liters of ethanol and biodiesel respectively (Philip, 2007). The local annual demand for ethanol and biodiesel are estimated at 568 and 886 million liters respectively. This means that the country has an annual export potential to the world market of 3,442 million liters of ethanol and 840 million liters of biodiesel (Philip, 2007). Of course, these assumptions are based on using a high percentage of available arable land and resources with potentially serious impacts to the Tanzanian people and environment. The increase in demand for biofuels at a current dramatic rate is attracting the interest of investors from within and outside of Tanzania. The trend shows that multinational investors/companies are increasing their investments into the cultivation of crops for biofuels production in the country. This trend has some serious environmental, social, economical repercussions (e.g. effects on food production, displacement of local communities, land appropriation, etc). There is a concern that if more land is allocated to biofuels, less will be available for food production. A study by the German Technical Cooperation (GTZ, 2005) found that large-scale biofuels programmes in Tanzania could indeed lead to the displacement and marginalization of the poor in rural areas. Additionally, the cleared forest resulting from the cultivation of energy crops and/or through displacement of people significantly reduces the habitat area for Tanzania’s indigenous flora and fauna, potentially threatening the future of the country’s tourist industry, while undermining the positive aspects of biofuels as a way to combat climate change.
3.3. Potential Feedstock for Biofuels Production Generally, biofuels can be produced from a variety of feedstock. The feedstock required for biofuels production depends on the type of biofuel being produced, whether it is ethanol or
7 URT/WB. Tanzania Agriculture: Performance and Strategies for Sustainable Growth, February 2000.
Figure 4: Total land area for Tanzania.
(Source: FAO, 2007)
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biodiesel. A wide variety of energy crops can be grown in Tanzania due to its wide climatic variation and agro-ecological conditions. 3.3.1 Feedstock for ethanol production Ethanol can be produced from crops that contain starch, such as maize, sorghum, rice, millet, cassava, etc. It can also be produced from root crops, like cassava and potatoes. Sugarcane and sugarbeet can also be used as feedstock for ethanol production. Other feedstock include food processing by-products, such as molasses, and cellulosic materials, including grass and wood, as well as agricultural and forestry residues (Shapour et al., 2006). In Tanzania, agricultural crops like sweet sorghum, cassava and sugarcane have the greatest potential for ethanol production (GTZ, 2005). Of course, as important food crops in Tanzania, these feedstocks would also have the potential to raise food prices. Figure 5 shows a comparative presentation of Tanzania’s and world average yields for various potential crops (including cassava, sugarcane and sorghum) for ethanol production.
Figure 5: Tanzania’s and World average yields for potential crops for ethanol production.
(Source: FAO, 2004)
Ethanol is considered as an agricultural product under the WTO and is governed internationally by the agreement on agriculture (FAO, 2007). The table below shows potential yields of ethanol from selected crops in Tanzania.
Table 1: Potential ethanol production from selected crops
Crop Yield (liters/ha)
1. Sugarcane 2. Sweet Sorghum
3. Cassava
4000-8000 3000-6000 1750-5400
(Source: Ravindranath, 2008)
3.3.1.1Sorghum Sorghum belongs to the group of crops known to be drought resistant. Sorghum is grown in almost every region of the country, but most commonly in Dodoma, Singuida, Tabora, Shinyanga, Mwanza and Mara Regions. It is cultivated in areas of marginal rainfall. Worldwide, sorghum has recently begun attracting attention as an option for ethanol production8. This crop produces sugars (including sucrose) in its stem in a way similar to sugarcane. Also the seeds can be used for
8 www.sorghum.silvaeculture.co.uk
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feed/food or alternatively also for biofuel production. 3.3.1.2 Cassava Cassava, like millet, can be grown in most parts of Tanzania, though its quality may differ from one region to another. The most prominent regions in cassava production are Mtwara, Lindi, Pwani, Dar es Salaam, Shinyanga, Tabora, Mwanza, Rukwa, Kagera, Kigoma and Mara. In Mwanza, Shinyanga, Tabora and Mara Regions, cassava forms part of the staple food for the population. Cassava contains 25% starch9, thus making it suitable for ethanol production. However, yields of cassava in Tanzania are around three tons per hectare, while yields of 25 tons per hectare are reported from Thailand and 15 per hectare in Nigeria, raising questions about the efficiency and competitiveness of cassava as a feedstock in Tanzania. 3.3.1.3 Sugarcane Sugarcane is one of the important commercial crops in Tanzania. It is primarily grown on four estates, namely those of the Kilombero Sugar Company, Mtibwa Sugar Estate, Tanganyika Planting Company and Kagera Sugar Limited. Apart from sugarcane grown on estates, other sugar cane is grown by out growers who are near to the Kilombero, Kagera and Mtibwa Estates. In 2006/07, sugar production in Tanzania was estimated to be 192,535 tonnes, and it is projected to be around 312,000 tonnes in 2007/08 (MAFS, 2007). The estimated demand for sugar is about 300,000 tonnes; therefore in 2006/07 Tanzania imported more than 100,000 tonnes to meet the shortfall. Sugarcane is viewed to be the most attractive feedstock for ethanol production at the moment. Sugarcane is one of the few crops whose production per unit area in Tanzania (99.2 tonnes/ha) is higher than the world average (65.1 tonnes/ha) (Philip, 2007). None of the above sugar industries is currently producing ethanol. However, these industries have shown growing interest in the production of ethanol as a transport fuel in order to diversify their income opportunities (Envirocare, 2007). The potential for ethanol production from the four industries in 2004/2005 was estimated to be 20 million litres per year (GTZ, 2005). 3.3.2 Feedstock for biodiesel production Biodiesel can be produced from oilseed crops such as soybean oil, sunflower oil, palm oil, Jatropha, etc. Tanzania is blessed with a wide range of oilseed crops that can be used as feedstock for producing biodiesel, though some of them are also food crops. At the moment, oil palm and Jatropha are viewed as having the greatest potential for biodiesel production in Tanzania. Oil palm has a high oil yield per hectare compared with other oilseed crops currently grown in Tanzania. Palm oil, however, is also consumed as a food crop. Jatropha is not a food crop and therefore its use for biodiesel production would not compete with food if it is not cultivated on fertile land where food crops can also be grown. The logic here is that it is not the choice of crop for biofuel in itself that competes with food, but rather the land that is chosen for biofuels production. Croton Megalocarpus has been reported to be another potential feedstock for biodiesel production in Tanzania, however there is no field/local experience on this plant. Biodiesel is considered to be an industrial product under WTO rules (FAO, 2007). The table below shows potential yields of biodiesel from selected oilseed crops in Tanzania. Table 2: Potential biodiesel yield from selected oilseed crops
Crop Yield (litres/ha)
1. Oil Palm 2. Jatropha
2500-6000 400-2200
(Source: Ravindranath, 2008)
3.3.2.1 Jatropha Jatropha curcas - commonly known as physic nut or mmbono kaburi in Swahili - is a multi-purpose tree species with the potential to produce crude vegetable oil and biodiesel from its seeds. It can
9 Starch can be converted to sugar by a process called saccharification
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grow well in a wide range of soils but does best in gravel or sandy soils. It can adapt well to semi-arid conditions, thus it is promising in combating desertification and enhancing socio-economic development in marginal rural areas. Jatropha is used to control soil erosion, especially in the semiarid areas, and its seedcake can be use to improve soil quality due to its high nitrogen content. Jatropha is popular in Tanzania as a natural fence or hedge in villages or agricultural areas. Notably, the plant, particularly its seeds, is toxic to humans and animals, raising complications and safety concerns for its harvest and biofuels production. Annual minimum rainfall required for Jatropha is between 550 to 600 mm and it needs four to five years to reach maturity. It can remain productive for 40 to 50 years. Around 1,600 plants can be found in one hectare (with of 2.5x2.5m spacing). Field experience shows that one hectare can produce 3,200 – 4,800 kilos of seed per year. With an extraction rate of 25%, one hectare can yield between 800 to 1,200 kilos of oil per year (RLDC, 2007). However, actual yield based on local experience in Tanzania have been reported to be far less than this.
For years now, there have been initiatives in Tanzania to plant Jatropha for small-scale oil production for use in lamps, stove prototypes, diesel engines and making soap. Also, there are projects going on dedicated to large scale production and export of Jatropha oil/biodiesel. These projects are described in more detail later in this study. 3.3.2.2 Oil Palm Oil palm is commonly grown in Kigoma Region by smallholder farmers for edible oil production. According to the FAO, Tanzania has about 1.2 million hectares identified as suitable for oil palm cultivation. In 2004, 4,500 hectares of oil palm were harvested, producing around 6.8 million liters of palm oil (low yield of 1,500l/ha) (GTZ, 2005). Production of palm oil is below the quantity demanded for use as an energy crop. The gap between consumption and production causes Tanzania to import palm oil from Malaysia and Indonesia10. For this reason using palm oil for biodiesel production is likely to face competition from its food use, leading to a high local price for the crop and biodiesel produced (Philip, 2007).
Figure6: Production and consumption of Palm oil in Tanzania (Source: URT, 2003)
3.3.2.3 Croton megalocarpus Croton megalocarpus is a dominant upper canopy forest tree reaching heights of 40 meters or more. It is widespread in the mountains of Arusha, Kilimanjaro and Kagera Regions. Croton can grow at minimum altitude of 1300m and maximum of 2200m. It requires light, deep, and well-drained soil. Croton seeds cannot be stored for long periods because of their high oil content. The germination rate falls dramatically if seeds are stored for more than nine months. The leaves, roots, and bark are used to treat stomach problems and pneumonia. It has a high oil content (30%) and high protein content (50%). The oil extract is reported to be a forceful purgative. It makes a good live fence and the leaves are used for mulch and green manure. Also, it is highly regarded as firewood, but is not recommended for charcoal as the smoke stings the eyes. No field experience regarding this crop for biofuels production in Tanzania.
10 Malaysia and Indonesia are the largest producers of palm, accounting for 80 percent of the world’s output.
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3.4 Status of Private Sector Investment on Biofuels
Today, there are two different schemes for biofuel production in Tanzania. First, biofuels can be produced through large-scale devoted production projects (targeting more than 500ha) with foreign companies as the principal developers, all valued at multi-million dollar investments. Second, smaller-scale production schemes are possible involving plant oil, mainly from Jatropha, involving activities of small scale farmer’s associations/cooperatives, CBOs, NGOs and local companies focusing on rural development. 3.4.1 Large scale investment
3.4.1.1 D1 Oils Plc
D1 Oils is a UK company based in Newcastle and engaged in the worldwide large-scale production of biodiesel from plant oil seeds with special focus on Jatropha. In 2003, D1 Oils established the subsidiary D1 Oils Tanzania Limited. The company is focusing on producing biofuels from plant oil derived particularly from Jatropha curcus and acquiring carbon credit from its large energy plant forests. In Tanzania, the company had planned to have biofuels oil purification stations in every district. It appears, however, that D1 has abandoned its plans for Tanzania and is currently targeting Mozambique, Swaziland and Madagascar.
3.4.1.2 Sun Biofuels Tanzania Limited Sun Biofuels Ltd is a UK-based biofuels company operating predominantly in the developing world. The company's strategy is to cover all areas of the biofuels industry from growing and production to processing and marketing. Sun Biofuels is targeting 18,000 hectares in Tanzania. In 2007, the company identified 11,226 hectares in Kisarawe District in Coast Region11 and is currently in the process of finalizing the acquisition of the land. Once finalized, planting of Jatropha for biodiesel production will begin. Much of the land targeted by Sun Biofuels is miombo woodland, and they have reached tentative agreements with villages to purchase community-managed productive forest for clearing and planting of Jatropha. (Thus, this project demonstrates the land use competition between biofuels production and forests, with the resulting tradeoffs for conservation and climate change.) They intend to compensate the communities with Tsh 400 million (just over Tsh 35,000 per hectare), and create 5,000 jobs for local community members. The company plans to promote out-grower schemes and train local farmers in Jatropha production. There is evidence that there would be some displacement of households in at least one village. A final Environmental Impact Assessment report has been submitted to NEMC, and its review is on-going. The project is being actively promoted by a Member of Parliament from Kisarawe District. Sun Biofuels is also active in Mozambique. 3.4.1.3 PROKON BV PROKON PV is a Dutch company that started working in the field of biofuels in 2001, focusing on the use of pure plant oil to run diesel engines. PROKON’s activities in the field range from the production of plant oil to the retrofitting of engines and their maintenance. In 2005, PROKON established a project in Mpanda District to cultivate Jatropha for biodiesel production. Currently, cultivation is carried out by more than 2,000 farmers on a total area of 10,000 hectares through contract farming. The farmers are supplied with Jatropha seeds and receive extension services.
11 Information obtained from village Chairman, Muhaga village, based on proceedings from meetings with Sun
Biofuels. This is contradictory to Sun Biofuels’ published statements that they are in the process of acquiring title
to 9,000 hectares.
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One of the markets targeted by PROKON is generating power from Jatropha-fueled generators and selling the power to Tanesco. 3.4.1.4 Farming for Energy for better Livelihoods in Southern Africa (FELISA) FELISA is a fledging business start-up aiming to produce biodiesel from palm oil. The multi-year project is at a very early stage of development but will eventually include several components:
• Installation of hybrid oil palm nurseries; • Establishment of two palm plantations; • Promotion of hybrid oil palm cultivation by out-growers; • Production of Crude Palm Oil (CPO); • Transformation of CPO into biodiesel; • Digestion of processing waste to produce biogas and generate power.
The project is a Tanzanian-Belgian private sector partnership. Original project planning for FELISA began in 2004 with concrete activities beginning in 2005. To date, FELISA has established its administrative infrastructure and one large oil palm nursery (42,000 seedlings), mobilized and organized farmer out-grower groups (990 individuals), planted a small part of its plantation land (150 hectares out of 4,658), and installed and began using processing equipment for the production of palm and palm nut oil. FELISA targets 10,000 hectares, with half coming from a company oil palm plantation and half supplied by out- growers. This would result in a potential output of 40 million litres of palm oil per year. At the moment, the company has acquired 4,258 hectares (although some of these acquisitions are in the courts under a land dispute) and trained many out-growers on good palm husbandry. Only 150 hectares of the company land is under oil palm, which is expected to begin production by the end of 2009. The company originally intended to produce biodiesel to power the region's Tanesco generators (6MW in the center of Kigoma town) and has been in discussions with Tanesco about supplying it with either CPO or biodiesel. (Gensets could be converted to CPO or biodiesel progressively as FELISA capacity increases.) However, the high demand and rise in palm oil prices has led the company towards commercializing crude palm oil on the local market, thus demonstrating the potential impact of rising prices on the industry. 3.4.1.5 Kikuletwa Farm The Kikuletwa farm (1,000 acres) is owned by Peter Burland (a British farmer) located at the TPC area in Moshi town. The main crops available on his farm are Aloe vera and Jatropha. The farm’s objective was to establish a large-scale plantation of Jatropha with expelling equipment to produce oils. The promoter, however, became disenchanted with Jatropha’s potential as a biofuels feedstock and is now converting more land to aloe vera. 3.4.1.6 Africa Biofuel and Emission Reduction Company (Tanzania) Ltd Registered in 2006, African Biofuel claims to promote economic development in North Western Tanzania while combating climate change. Attracting carbon credit financing was from the beginning a critical component of the business plan. It is a joint venture between TTT-WILMA Biofuel and Emission Reduction Company, part of WILMA Group of the USA (www.wilma.us) and the National Investment Company Limited (NICOL) of Tanzania.
African Biofuel will potentially focus in Biharamulo District in Kagera Region, raising croton megalocarpus trees, a species indigenous to the area and containing a high percentage of oil. The company aims to acquire 20,000 hectares to plant croton megalocarpus trees, and it also intends to buy nuts and /or oil from independent growers and will provide them with education and technical support. The maximum output is projected at 103 million litres of biodiesel per year.
Little has been accomplished to date, with the exception of extracting a small amount of oil for testing purposes. It is quite possible that the company has abandoned its plans to produce biofuels in Tanzania due to a lack of financial resources to carry out the project.
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3.4.1.7 Donesta Ltd and Savannah Biofuels Ltd This is a local company planning to establish Jatropha farms in different places in the Dodoma Region. The company has already acquired 2,000 hectares and established 100,000 Jatropha seedlings. Also, they have planted 200 hectares of sunflower for biodiesel production. Donesta Ltd is planning to export crude Jatropha oil to the European market. It has no current plans to produce biodiesel for the local market. 3.4.1.8 Bioshape Tanzania Ltd Bioshape is the sister company of Bioshape Holdings bv Holland. The company started operating in Tanzania in 2007. The company’s objective is to develop a large-scale Jatropha plantation for production of biodiesel for export. Bioshape seeks to acquire about 81,000 hectares from four villages in Kilwa District, Lindi Region, but according to land officials they have only processed the purchase of 34,736 hectares. Physical observation of the location revealed that the targeted land is a mix of bushes and miombo woodlands. They are in the process of paying Tsh 250 million to the District Council (just over Tsh 7,000 per hectare), and the funds would be shared 60% for the District council and 40% for the local communities. If they were to acquire the total 81,000 hectares they would pay Tsh 1.023 billion. Bioshape is planning to use 60% of the total land in plantation batches of 200ha plots and maintain a 40% buffer zone of natural vegetation, animal free zones, hills and wetlands as well as thick forest. The company has developed a trial farm (76ha) and planted Jatropha. The company would eventually employ 10,000 people in ten years, and currently is employing 600, the majority being casual labor (90 permanent). The company has made verbal promises to invest in social infrastructure in the communities (roads, schools, wells, etc.). Bioshape has applied for a logging license, but indications are that the company has already installed a saw mill and begun logging. The company’s business plan also includes its intention to export seed for processing in Europe, though current Tanzanian law prohibits the export of any type of seed. (There is fear that Jatropha oil would degrade during the container transport to Europe.) Bioshape has completed its Environmental Impact Assessment and been granted a certificate by the NEMC. However, the integrity of this EIA is questionable. There is no mention of coastal forest and the land targeted is described as degraded Miombo woodland. Site visits indicate that the woodland is not degraded. Bioshape has also commissioned two international EIA (separate from the one available through NEMC), a Carbon Mass Balance, and a Life Cycle Analysis of Jatropha. Unfortunately, these documents were not made available to the consultant team although requested. In 2009, BioShape intends to start renovating the Kilwa harbor to facilitate the export of seed and/or oil to Europe.
3.4.1.9 InfEnergy Ltd This is a UK based company established in 2005 to create biodiesel businesses in developing markets. Recently, InfEnergy changed its core focus and now the company is targeting only the production of palm oil (due to the rise in palm oil prices and improved profitability) and food crops. The company is in the process of acquiring about 5,818 hectares in Mvomero District, Morogoro Region. The land targeted is from a previously existing derelict farm, so no forest clearing in envisioned. An EIA is in progress.
3.4.1.10 BioMassive BioMassive is a Swedish company operating in Tanzania since 2006. The company targets over 50,000 hectares of viable land for the development of biofuels from Jatropha and pongamia, leased from local communities spread throughout Lindi Region. It envisages the development of an initial production of over 100,000 tons per annum of biofuels and this initiative will involve and
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create direct employment for over 4,000 people.
BioMassive also operates a research and development facility in India, where they conduct Jatropha testing on 138 acres of land. 3.4.1.11 SEKAB BioEnergy Tanzania Limited Swedish Ethanol Chemistry AB (SEKAB) is a large producer and distributor of ethanol. The company currently supplies 15% of the European and 75% of the Scandinavian ethanol markets. SEKAB is owned by three Swedish public utility energy companies (Skelleftea Kraft, Ornskoldsvik Energi and Umea Energi) and the largest oil distribution company in Sweden, OK, a cooperative owned by 1.6 million motorists. SEKAB has a complete logistical infrastructure for the storage and distribution of ethanol, including storage facilities in European ports and an established retail distribution network. SEKAB BioEnergy Tanzania Ltd is a company that was formed following the signing of a Memorandum of Understanding between the GoT, SEKAB, the BioAlcohol Fuel Foundation (BAFF) and the Community Finance Company (CFC).12 SEKAB and CFC formed SEKAB BioEnergy Tanzania Ltd in order to establish large-scale ethanol and electricity generation projects. Although the objective is to develop sugarcane plantations in Rufiji and Kilwa Districts, the company has selected Razaba Farm in Bagamoyo District as the first pilot site, eventually covering 15 – 30,000 hectares located within Ruvu river basin. The company has leased agricultural land from prisons in Bagamoyo in order to start seed cane multiplication (200 hectares), in preparation for planting on the Razaba Farm in mid 2008. They are in the process of completing their EIA for the Bagamoyo plantation project, but no EIA report has been initiated relative to the seedcane farm. Fourteen households and a number of pastoralists are being compensated for being displaced. Water is another critical concern relative to this Bagamoyo project, as sugar cane requires a great deal of water and much of the water existing in Bagamoyo is diverted to Dar es Salaam, supplying 80% of the city’s consumption (Ruvu River). SEKAB BioEnergy has also initiated discussions with district and village authorities about acquiring land in Rufiji and Kilwa Districts. Here the company envisages establishing between 200,000 and 400,000 ha of sugarcane plantations. Furthermore, they have a daughter company in Mozambique called EcoEnergy. In northern Mozambique the company has plans to establish 200,000 ha of sweet sorghum plantation for ethanol production. 3.4.1.12 Other Large Scale Projects There are six additional large scale projects, of which only cursory information is available:
• J and J Group (PTY) Limited of South Africa intends to plant Jatropha in Tabora Region; • Abengoa BioEnergy Company, a Spanish company and one of the biggest players in
Europe aims to plant sweet sorghum for ethanol production from plant stalks. They are targeting Bagamoyo District;
• BioEnergy Resources Tanzania Limited (origin unknown) is planning to plant Jatropha in Coast and Morogoro Regions;
• Africa Green Oil (sister company of Green Resources Tanzania Limited) intends to plant oil palm and Jatropha in Rufiji District. They have started the EIA process;
• Mitsubishi Corporation from Japan is looking for land in Arusha, Dar es Salaam and Coast Regions for Jatropha plantations;
• Kapunga Rice Project Limited have established a Jatropha nursery for research purposes before moving to large scale farming. Target area is Mbarali District in Mbeya Region.
12 CFC is one of private sector member of the National Biofuels Task Force. Private sector is presented in the
NBTF by two institutions..
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3.4.2 Small Scale Projects and Related Support Organizations
3.4.2.1 Diligent Tanzania Limited Diligent Energy Systems is a Dutch Eindhoven-based company with branches in Tanzania and Columbia. In Tanzania it is located in Arusha and it has contracts with more than 1,500 Jatropha farmers from Babati, Engaruka, Chalinze, Pangani and Singida. At the moment the company is dedicated to the production of Jatropha oil for local consumption (in stoves, modified engine vehicles). The company has an oil press with a capacity to extract 1,500 litres of oil per month, but due to the limited supply of Jatropha seeds the current production is between 600 – 800 litres per month. Recently, Diligent has installed a biodiesel processing plant with a capacity of producing 300 litres per batch. Diligent’s principal obstacles are the limited supply of pressing seed (much of the seed available in Tanzania is used for planting) and the cost of collecting seed from the many dispersed producers.
3.4.2.2 Kampuni ya Kusambaza Teknolojia Limited (KAKUTE) KAKUTE is a local private company based in Arusha promoting Jatropha and rural technologies. Since 2000, the company has been involved in pilot projects aiming at controlling soil erosion, improving the management of natural resources, promoting economic activities for women, and fighting poverty through the creation of rural industries. It is also involved in the promotion of renewable household energy for rural communities. KAKUTE is not a company designed to produce or commercialize biofuels, but rather more of a development consulting firm. KAKUTE has trained more than 5,000 farmers in Jatropha production. 3.4.2.3 The Tanzania Traditional Energy and Environment Development Organization (TaTEDO) TaTEDO is a local NGO based in Dar es Salaam, registered in 1990 and working in more than ten regions of Tanzania. TaTEDO is widely sensitizing rural and urban communities on the potential use of Jatropha. The main focus has been to provide information and extension services to smallholder farmers. The organization has acquired 50 acres in Kisarawe District to set-up a Jatropha demonstration farm. TaTEDO has also installed three multifunctional platforms (MFP) in Arusha and Dar es Salaam regions. The platforms are designed to operate on Jatropha oil. However, due to the limited availability of seed, they often operate on traditional diesel fuel. TaTEDO has a long-term project with the EU to install one hundred MFPs in more than eleven different districts in six regions (in addition to the three existing sites).
3.4.2.4 Jatropha Products Tanzania Limited (JPTL) JPTL is a not-for-profit organization registered in 2005, based in Arusha but operating in five regions; Arusha, Tanga, Kilimanjaro, Manyara and Singida. It targets working with 2,000 households, and its main objective is to link research and development in areas of knowledge, skills, information and technology transfer to small scale farmers and enterprises interested in the Jatropha plant, seeds and products. Also, JPTL promotes the use of Jatropha oil in lanterns, stoves, and for soap making.
3.4.2.5 Environmental, Human Rights Care and Gender Organization (Envirocare) Envirocare is a local, non-governmental organization formed and registered in 1993. The organization promotes small-scale farming of Jatropha to realize its objective of environmental conservation and improved livelihoods with a gender and human rights based approach. Currently, Envirocare works in Kilimanjaro, Tanga, Morogoro, Regions and in Dar es Salaam.
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3.5 Status of Local Consumption of Biofuels
3.5.1 Transport Currently, there is neither production nor use of biofuels for transportation in Tanzania. TaTEDO and Diligent currently are experimenting with biodiesel for this purpose. Since 2006, TaTEDO has been researching small scale production of biodiesel from Jatropha oil whereby 18 litres of biodiesel were produced and tested in a vehicle, reported to function well. Preliminarily results show that under the current supply of Jatropha seeds and methanol13, biodiesel is more expensive than normal diesel. According to Diligent, the price is estimated to be around Tshs 3,000 per litre whereby the pump price for normal diesel as of June 2008 was Tshs. 1850 per litre. On the other hand, there have been some trials by Diligent to use Jatropha oil to run vehicles (with minor modifications in the engine); one litre of oil is around Tshs. 1,500. Biofuels is a potential source of fuel for transport in Tanzania, as it can be grown and processed locally. Under the revised Petroleum Act (2008), with sufficient supply of biofuels, the government can set blending ratios and targets. Minimum blending ratios that do not require engine modifications are E10 (10% ethanol by volume) for petrol-fuelled vehicles and B20 (20% biodiesel by volume) for diesel-fuelled vehicles. The figures below show projections of the quantities of biofuels required for E10 and B20 blending ratio nationwide. Unfortunately, the quantity of ethanol and biodiesel that will be produced by the projects just summarized above to meet the minimum blending ratio is not known.
Figure 7: (i) Ethanol requirements for E10 blending (ii) Biodiesel requirements for B20 blending
(Source: Envirocare, 2007)
3.5.2 Rural Electrification Jatropha oil can also be used to run Multifunctional Platforms (MFP). A MFP is a simple diesel engine that can power different tools. The MFPs have the potential to provide electricity to households and motive power for cereal milling, oil pressing, welding and battery charging. In general, it aims to improve the living conditions of rural populations in off-grid areas. The MFP was first piloted in Mali under the support of the UNDP, whereby hundreds of MFPs were installed in rural areas. In Tanzania, TaTEDO is the pioneer in promoting the MFP14. It has installed three MFPs powered by Jatropha oil at Engaruka and Leguruki villages in Monduli and Meru districts respectively and Mbezi Juu in Kinondoni district. Two milling machines have been installed in the two villages and more than 100 households and 22 small-enterprises (e.g. shops, video showing centres, battery charging centres, etc.) have been electrified. A household pays a monthly bill of around Tshs. 3,000 if they use electricity for lighting for four hours in a day and Tshs. 7,000 for enterprises. Normally, community members collect Jatropha seeds from their farms (largely from the fences and farm hedges) and sell them to the MFP operator for oil extraction at a farm gate price of between Tshs. 120 – 150 per kg. The supply of Jatropha oil is scarce due to the limited availability of seeds, currently valued more
13 Methanol is an important chemical reagent for biodiesel processing. The chemical is currently imported from South
Africa.
14 According to TaTEDO Engineer, a cost to install one MFP in the rural area is about Tshs. 15 million. The cost includes milling machine, diesel engine, transmission poles and labour.
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for planting than for oil extraction. For this reason the MFP in Leguruki is frequently fuelled with diesel instead of Jatropha oil. 3.5.3 Cooking Ethanol jelly processed from ethanol can be used for cooking. For example, Moto Poa Company Limited produces ethanol-based jelly for cooking and markets it throughout Dar es Salaam. The company plant is located at Mikocheni in Dar es Salaam. The Company imports all its ethanol from South Africa. It consumes between 18,000 and 20,000 liters of ethanol per month. Daily production of ethanol-jelly fuel at full capacity is around 2,000 tons, which is six times the nation’s current daily demand of kerosene. Currently the plant is operating below the capacity due to the low demand of the fuel. Other initiatives include the use of Jatropha oil for cooking. These include piloting Protos stoves (BOSCH Plant oil stove), researching and testing KAKUTE/JPTL stove prototypes in collaboration with the University of Dar es Salaam and the use of Jatropha seedcake as a feedstock for biogas. For example, in July 2007 Diligent constructed a 60m3 biogas plant that is used for cooking food for about 500 workers of a flower farm located near the Diligent office. 3.5.4 Soap Making KAKUTE and JPTL have been promoting the use of Jatropha oil for soap making. Women's groups in Monduli and Arumeru Districts have decided to specialize in soap making and marketing. They buy oil from their colleagues who extract it from the seeds using locally-made manual presses.
4.0 Policy Framework for Biofuels Development in Tanzania
In order to manage the current “boom market” for biofuels in a way that maximizes its potential for economic development, while minimizing environmental and social impacts, the GoT will need to develop coordinated policies and strategies. Currently, Tanzania lacks policies, strategies, guidelines and regulations to support biofuels development. The National Biofuels Task Force has been charged with this responsibility, but as yet has not developed these policies. The activities of the biofuels industry intersect with the missions of a variety of government departments. Therefore, a set of well-developed, coherent and cross-disciplinary policies will be necessary to avoid unintended negative impacts on other sectors, to help to maximise the role that biofuels can have in stimulating the economy, to reduce unwanted negative environmental impacts and to ensure the long term sustainability of the biofuel industry. The following ministries will be involved (in some way) in the biofuels industry:
• The Vice President office – Directorate of Environment, • Ministry of Energy and Minerals, • Ministry of Agriculture, Food Security & Cooperatives, • Ministry of Trade, Industries and Marketing, • Ministry for Lands and Human Settlements, • Ministry of Natural Resources and Tourism, • Ministry of Finance and Economic Planning, • Ministry of Community Development, Women and Children Development, • Ministry of Sports, Labour and Youth Development, • Ministry of Water and Irrigation, • Ministry of Livestock and Fisheries Development.
The dangers of not putting effective policies and legislation in place are shown by developments in the palm oil industry in South East Asia. Large scale production of palm oil was promoted in Malaysia and Indonesia in the mid 1990s. This caused many negative impacts by displacing people involuntarily, converting millions of hectares of forest of high conservation value to
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plantations and as a result causing a great loss of biodiversity, increased carbon emissions from deforestation as well as the loss of carbon sinks mitigating against climate change. These undesirable impacts damaged the industry in the long term, as regional imports were banned as a result of NGO pressure. Additionally, an $8 billion Chinese investment into an Indonesian plantation was blocked. Uncoordinated efforts to introduce and promote biofuels already have begun in Tanzania with ambitious goals of ensuing energy security, improving livelihoods, and promoting rural development. In the absence of clear government policy and oversight, however, it is unclear whether any of these goals will be achieved. The government currently has no role in influencing which crops are grown for biofuel and whether the fuel remains as a domestic resource, promoting energy independence, or serves as an export to other countries. Moreover, in this policy vacuum, a ‘land grab’ of sorts is occurring, with companies acquiring (or trying to acquire) large amounts of land with potential damaging results to the Tanzanian people and its environment (forest, biodiversity).
4.1 Existing Legal Framework
Although, no policies or legislation yet exist that directly address biofuels production, Tanzania has a number of policies and laws that are relevant to the many issues implicated by the growing biofuels industry. In the absence of a more coordinated legal framework, it is critical to understand how the existing policies interface with the biofuels industry and interact with each other. 4.1.1 Policies
4.1.1.1 Energy Policy (2003)
The Energy Policy calls for efforts to promote fuel switching from petroleum to other alternative, environmentally friendly fuels. There is no mention of biofuels in the policy document, because biofuel production was barely considered at the time of the policy’s drafting. However, MEM recognized the momentum towards biofuels within the country and promoting biofuels development has become a critical strategy within the Ministry and government for reducing dependence on imported fossil fuels. MEM is the Secretariat of the National Biofuels Task Force (NBTF). To date the NBTF has done the following:
• Conducted SWOT analysis to identify areas for action. Prioritized strategic actions for biofuels development are: - Legal, policy, Standards and Institutional Framework Strengthened;
- Proven bio-fuel products and production technology assured;
- Energy crops production increased;
- Land availability and agriculture management practice improved;
- Bio-fuels business viability and (business) development services strengthened;
- Research and development and dissemination strengthened;
- Stakeholders coordination and mobilisation strengthened;
- Learning (effectively) from the experience of others enhanced;
- Physical support infrastructure improved.
• Draft Biofuels Action Plan prepared. Key elements of the action plan are: - Review of the existing policies and legal and regulatory institutional frameworks
based on review - amend/revise policies or develop new biofuels policy or both; - Finalize draft biofuels guidelines as an interim measure while biofuels policy/act
being developed; - Draft biofuels act; - Capacity building for government departments and institutions to coordinate biofuels
activities and projects; - Map and zone out land for biofuels production;
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- Awareness to the public so that they can benefit from biofuels business. • Draft Biofuels Development Guidelines prepared; Key elements of the guidelines are:
- Land acquisition; - Land use for specified biofuel crop(s); - Resettlement plan; - Biofuels investment opportunities in Tanzania; - Appropriate infrastructure development (roads, grid network, pipelines, railways,
etc.); - Contract farming; - Community engagement; - Environmental Impact Assessment (EIA); - Processing of biofuels - Probably to finished/semi-finished biofuels products; - Storage and handling of biofuels; - Transportation and distribution; - Quality of biofuels (standards); - Blending (biofuels &mineral fuel).
• Inclusion of biofuels in Petroleum Supply Bill; • Preparation of two years biofuels project document on “Strengthening the policy,
legal, regulatory and institutional framework to support the development of a sustainable biofuels industry in Tanzania”
4.1.1.2 National Land Policy (1995)
The overall aim of the Land Policy and its implementing legislation is to ensure a secure land tenure system and encourage the optimal use of land resources, while promoting community ownership and management of land and without endangering the environment. The relevant objectives and goals of the National Land Policy are:
• Village Councils shall administer Village Lands in consultation with Village Assemblies; • To protect village land rights and promote better and sustainable use of natural
resources within the villages, the government will assist villages in demarcating their boundaries and implementing their management authority over these lands;
• Village Land Use Planning will be simplified for speedy execution; • Government will ensure that permits and licenses for natural resources exploitation will
be made with regard to land use polices and environmental and conservation policies.
Implementing legislation confirming these principles were enacted, namely the Land Act 1999 and the Village Land Act 1999, following the issuance of the policy. These laws legally confirmed most of the principles outlined above and created firm legal footing for community ownership and management of local lands and natural resources. if followed and respected, these laws offer important protections for individuals and villages facing land acquisition pressures from biofuels production and will be discussed further in the following chapter.
4.1.1.3 Environmental Policy (1997)
The National Environment Policy of 1997 articulates well the relationship between poverty and environmental degradation, and by inference poverty and bioenergy production and consumption. It states “Satisfaction of basic needs is therefore an environmental concern of relevance to environmental policy. Investment in development is vital for environmental protection because the environment is the first victim of acute poverty, urban overcrowding, overgrazing, shrinkage of arable land and desertification.” The Policy does not, however, promote development at all cost, as a means of addressing poverty. It advocates economic development in a sustainable manner and in a way that does not degrade the environment. More specifically, the National Environment Policy addresses policy objectives relevant to bioenergy. Objectives to be pursued include minimizing wood fuel consumption
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through the development of alternatives, wood fuel energy efficiency, the promotion of sustainable renewable energy resources, and energy conservation. 4.1.1.4 Agricultural and Livestock Policy (1997) Agriculture production is directly linked to environmental resources such as land, water, forest, and air. Unsustainable degradation of these resources in the production of crops can have far-reaching effects on environmental integrity. Objectives of the policy are to:
• Assure food security for the nation, including improvement of national standards of nutrition; • Improve standards of living in rural areas; • Increase foreign exchange earnings; • Produce and supply raw materials and expand the role of the sector as a market for
industrial outputs; • Develop and introduce new technologies for land and labor productivity; • Promote integrated and sustainable use and management of natural resources
(environmental sustainability); • Develop human resources; • Provide support services; • Promote access of women and youth to land, credit, education and information.
Additionally, the policy recognizes edible and non-edible oils. Non-edible oils are regarded by the policy as industrial vegetable oils which could be viewed as a precursor to biofuels. The Agriculture Sector Development Strategy (2001), which is one of the agricultural policy implementation tools, promotes creating a favourable environment to bring new land under production by either small farmers or large private investors. One of its strategic statements says ’’Government will work towards creating an enabling environment for medium and large-scale investors to make use of the abundant land resource in the country’’. In this way, the strategy supports large and small investment for biofuels production in Tanzania, so long as those investments as environmentally sustainable.
4.1.1.5 Transport Policy (2003)
The current Tanzanian transport policy has the objective to “facilitate sustainable development by ensuring that all aspects of environment protection and management are given sufficient emphasis at the design and development stages of transport infrastructure and when providing services”. It further emphasizes selecting appropriate technologies by setting standards and enforcement mechanisms through suitable regulations. The policy does not directly mention alternative fuels such as biofuels as a substitute technology in the transportation sector, but certainly provides ample authority for designating biofuels as an “appropriate technology” to support and diversify the transportation sector. 4.1.1.6 National Forest Policy (1998) The policy defines forest as “all land bearing a vegetative association dominated by trees of any size, exploitable or not, and capable of providing wood or other products or exerting influence on the climate or water regime or providing shelter to livestock and wildlife’’ The policy seeks to achieve the goal of “enhancing the contribution of the forest sector to the sustainable development of Tanzania and the conservation and management of natural resources for the benefit of the present and future generations”. The National Forest Policy recognizes that the sector’s principal challenge is the sustainable management of the country’s 33.5 million hectares of forest. Although the policy supports the sustainable development of forest resources, it places a higher emphasis on the development of “forest-based” industries or ecotourism, rather than agricultural development. Moreover, it recognizes that uncontrolled and unwise development has had devasting effects on Tanzanian forests, which are some of the most important, from a biodiversity perspective, in the world. The Ministry of Natural Resources and Tourisms estimates deforestation rate at between 130,000 to 500,000 hectares per year, caused by clearing for agriculture (food and cash crops), overgrazing,
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bushfires, charcoal burning and over-exploitation of wood resources. The estimated figure of deforestation rate has been reported for number of years, and it has been reported to be on the higher side by some of the stakeholders. Actual deforestation is not known. As with the Land Act and Land Policy, the Forest Policy recognizes the environmental, economic and social benefits of empowering communities by recognizing their ownership and management authority over large amounts of forest land. In 2002, the GoT passed a new Forest Act, implementing the National Forest Policy and further promoting village management authority and community forests. These land tenure and management rights are an important element in ensuring that local communities benefit from biofuels projects. Moreover, robust implementation of this policy and its implementing act is vital to ensuring that these rights are protected and viable alternatives to forest clear-cutting for agricultural uses exist. Because current biofuels investments are likely to have direct impacts on forests, these activities, if improperly planned or where targeting important forest areas, could come into conflict with the principles of the National Forest Policy.
4.1.1.7 Other relevant policies
Other key policies that are relevant to biofuels include Wildlife Policy (1998), National Investment Promotion Policy (1996), Sustainable Industrial Development Policy (1996), National Gender Policy (1999) and National Water Policy (2002). 4.1.2 Acts and Regulations
4.1.2.1 Revised Petroleum Act (2008)
The revised Petroleum Act (2008) which is yet to be enacted by the President includes issues of plant fuels and blending of biofuels with mineral petrol. If this bill passed, the Minister responsible for energy will have a mandate to propose blending ratios and targets nationwide. This would, quite obviously, greatly affect the domestic market for biofuels, while creating an impetus for keeping locally produced biofuels for domestic use rather than export. 4.1.2.2 Land Act (1999) Questions of land tenure and management authority were important drivers of natural resources exploitation in village areas prior to the issuance of the National Land Policy and its implementing legislation. The National Land Policy recognized the need to clarify land ownership and management authority with an emphasis on village control over village land. This could only be done through comprehensive legal reform. This reform occurred in 1999 with the passage of the Land Act and the Village Land Act. Under the Land Act No.4 of 1999, the root title to all land rests with the state. The Act defines management of land, settlement of disputes and related matters. The Ministry responsible for Lands is in charge of enforcement. Ownership of the Land is vested in the President as a trustee of the State. But, the Act, as modified by the Village Land Act, recognizes usufructory property rights in land that may be held by individuals or groups, including village governments. Because the production of biofuels is very land intensive, we describe in some detail the procedures and requirements for acquisition of land in Tanzania, including the requirements for foreign investors. Anyone using land in Tanzania must first obtain the President’s authorization to do so, although this authorization has already been made for large swaths of village land under the Village Land Act. As a practical matter, further use of such land is under the management authority of village governments. The President still has the authority to affect the special use of land under “Customary Law” because he can classify land categories. However, land can be owned in three different ways;
• Government granted right of occupancy • Tanzania Investment Centre derivative rights
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• Sub-leases created out of granted right of occupancy by the private sector. Rights of occupancy and derivative rights are granted for a short term and long-term period. Long term rights of occupancy periods range from 5 - 99 years and are renewable, but for not more than 99 years. Long term derivates rights and leases range between 5 - 98 years.
Only the President can grant right to occupy land, although village land has already been granted by tradition. The President, however, can transfer village land to another category of Land under powers of eminent domain, subject to compensation. Commissioner for Lands (Presidential appointee) has the right to grant rights of occupancy by official announcement in the Gazette. He is assisted by Land Allocation Committees (in the Ministry, Districts and urban levels) such that a local government authority (land officer) can no longer make land allocations individually. It is the Committee, which handles applications for land, posting the names of successful applicants. The application is followed by either refusal or by a “letter of offer” from the Land Allocation Committee. Then the applicant has to accept this letter of offer by signing on a preset form as a Letter of Offer. Then a Certification of Occupancy is issued in the name of the President. Minister of Lands may require payment of a premium for the grant; determined by several factors: declared use, value evidenced by previous sales, leases, prices or bids offered in the vicinity, etc. or by a qualified appraiser of Land’s value in the open market. Property taxes are assessed based on the following types of valuation:
• For planned land, 0.2% of the value stated, and • For land not yet valued, flat rates are charged – depending on the type of business, location
and by laws of each district council.
Under the Land Act (1999), citizen investors can acquire land by either granted right of occupancy or a derivative right or by obtaining a sub-lease from private sector. Also, the Land Act states clearly that non-citizens cannot obtain a right of occupancy, unless for investment purposes registered at the TIC15. A foreign investor may occupy land through:
• Derivative rights under section 20(2) of the Land Act (1999), • Application to the Commissioner for Lands for grant of right of occupancy under section
25(1)(h) and (i) of the Land Act (1999), • Sub-leases from private sector, • Licenses from the Government, • Purchase from other holders of granted right of occupancy.
According to the Land Act, land needed by a foreign investor is first allocated to TIC, which can then issue derivative rights to that investor. Tanzania Investment Act (1997) requires TIC to identify sites, estates or land for investment purposes; through consultation with government institutions and agencies. TIC has developed the so called “Land Data Bank” indicating more than 2.5 million ha as suitable for investment projects in Tanzania.
Table 3: TIC Land Data Bank
Source: TIC website
15 Tanzania Investment Centre (TIC) is the primary agency of Government to coordinate, encourage, promote and
facilitate investment in Tanzania and to advise the Government on investment related matters. TIC is the focal point for investors. It is the first point of call for potential investors; it is a “one stop facilitative centre for all investors”.
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To apply for a right of occupancy, a foreign investor must submit an application form, with TIC approval, to the ministry. Then a derivative right of occupancy is granted under section 20(2) of the Land Act (1999). The process of granting a right of occupancy includes the survey of the Land. In the case of land for investment, the process originates at the Ministry level, in the Directorate of Surveys and Mapping. Verification of the land earmarked for investment must be corroborated by the respective technical ministry (Industry, Agriculture, Tourism, etc.) through TIC. After these verifications, DOSM/Town Planner/Land Officer will issue survey instructions to the surveyor. Once survey is complete, a report is submitted for further verification before the Commissioner signs the Certificate of Occupancy. If the land is under Customary Law, the Commissioner or its Authorized agent has to request the current occupier to vacate the land before the applicant can have access to the land. 4.1.2.3 Village Land Act (1999) The Village Land Act also recognizes customary rights in land, including rights of households, groups, communities (subsets of villages) and villages as a whole to hold common lands, which include forests. This right of ownership in forest lands is further elaborated under the Forest Act, 2002. Under the Village Land Act, village governments are formally given the authority to manage all village lands. The Act also recognizes the right of multiple villages to enter into joint agreements to manage village land together.
The transfer of ownership and control over large areas of land from the central government to the village government forms the legal foundation for community and village management of land. With the passage of the Village Land Act, these large areas came under village control as a matter of law. Therefore, the community can propose to the district and ministry that village land be used for any investment including biofuels. Both acts are silent on the maximum or minimum land an investor can acquire in one location/village. 4.1.2.4 Tanzania Investment Act (1997). Under the Tanzania Investment Act of 1997, qualified investors are entitled to exemption from VAT and import duties on imported inputs and 100% repatriation of profits and capital investments after taxes and other obligations are met; the Act also provides for full protection of all investors agreements. The TIC has identified agribusiness as one of the priority sectors for investment. In the TIC context, agribusiness includes traditional crops, horticulture, floriculture, oil palm, Jatropha, sugar ethanol, organic cotton, pyrethrum, artemisia, fish and aquaculture. TIC maintains a database of suitable growing areas and offers a one-stop facilitating centre for the land acquisition, permitting and registration process including biofuels investment. 4.1.2.5 Environmental Management Act (2004) The Environmental Management Act (EMA) represents a comprehensive framework law on environmental protection. Its scope and powers are exceptionally wide. For our purposes, EMA includes two sets of powers that impact biofuel production. First, EMA requires an analysis of the environmental impacts of activities undertaken or permitted by the Government of Tanzania. These environmental impact assessments (EIA) are detailed analysis of the environmental effects of a proposed action. Under the act, activities in forest and land areas require EIAs. For example, the Forest Act recognizes and clarifies the EIA requirement, stating that “EIAs will be required for activities in forest and lands that impact greater than 5 ha of land”. The EIA process is described in more detail in the next sub-section. Second, the EMA grants to the Minister in charge of Environment (VPO) broad authority to address the impacts from climate change or global warming (EMA § 75). The minister’s powers include:
• Taking measures to address climate change • Issuing guidelines related to climate change • Requiring strategies and action plans to combat climate change
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• Reviewing and approving measures related to climate change • Projecting national positions on climate change
These powers are quite broad and would certainly include any plans for a cross sectional approach to managing the complex policy questions surrounding biofuel development at the national level. Such a coordinating, cross-sectional function is generally the type of activity performed by the VPO.
In addition, EMA grants to the minister powers to “set fees and taxes to make environmentally friendly products cheaper than polluting products” (§ 80(4)). These kinds of financial incentives could be used to support favourable biofuel products.
4.1.2.6 The EIA process under NEMC The EIA process is the heart of the 2004 Environment Management Act. Environmental assessments (including social and socio-economic aspects) follow a number of steps, including impact assessment - based on screening and scoping exercise; analysis of alternatives - to enhance the design of a project, including the “do nothing” alternative; predictions – to provide information on the potential implication of the proposed project; evaluation of significance – to determine the predicted or measured change in an environment and social attributes; identify mitigation measures – to reduce adverse environmental and social impacts; and public consultations – with affected or interested groups and NGOs. The review of environmental assessment report, which includes social aspects, is normally done by the National Environmental Management Council (NEMC), and approval/granting of the certificate is done by the Ministry responsible for environment, which is the Vice President’s Office (VPO). Key stages for the EIA process as quoted from Environmental Impact Assessment Guidelines and Procedures are:
a) Identifying key issues of concern (scoping) Where the minister responsible for Environment or NEMC rule that the EIA is required, those bodies which are to be consulted for the particular project in question will be notified and the developer will be informed accordingly.
One of the vital steps of the process of the statement is on the need for full and early consultation by the developer with bodies, which have interest in the likely environmental effects of the development proposal. If important issues are not considered at a very early stage, they may well emerge when the project’s design is well advanced and necessitate re-thinking and delay. EIA should thus ideally start at the stage of site selection, so that the environmental merits of practicable alternatives can be properly considered.
b) Preparing Terms of Reference (ToR) “Following the identification of key environmental issues of concern and how the various stakeholders will be involved, the Proponent prepares the TOR on the EIA study.”
c) Conducting Environmental Impact Assessment study “Following the approval of the TOR the Proponent undertakes the environmental assessment study”
d) Preparing Environmental Impact Statement “The developer (may choose to engage consultants for some or all of the work) is responsible for preparing the Environmental Impact Statement. Main items in the Environment Impact Statement are: Baseline Survey and inventory, proposal options, potential impact identification and prediction, mitigation consideration and commitments, environmental management plans and other issues specified in the TOR.”
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e) Techniques of Impact Assessment “The assessment techniques used and the degree of detail in which any particular subject is treated in an environmental impact statement, will depend on the character of the proposal, the environment which it is likely to affect and the information available. While careful environmental study of the proposed location will be necessary; the Director of Environment, NEMC, District authorities where the project is located as well as other relevant stakeholders may be able to advise the developer on sources of specialized information. Environmental statements will often need to recognize that there is some uncertainty attached to the prediction of environmental effects. Where there is uncertainty, it needs to be explicitly recognized, without undermining the importance of particular environmental effects.”
f) Determining the adequacy of EIS “The completed environmental statement will be submitted to NEMC, and in the case of districts to the District Environmental Coordinator, who will judge the quality of information received. Where the statement does not provide enough information, NEMC and or the District Environmental Coordinator will still need to have sufficient information on the projects likely effects to enable them to give appropriate advice.” “After submitting the statements to NEMC and or the District Environmental Coordinator the developer is required to publish a notice in the local newspaper and to post notices on the site indicating where and when the environmental impact statement may be inspected. The statement should be available for inspection at reasonable hours, at the locality of the project. The developer is required to provide NEMC with sufficient copies of the environmental statement to enable proper distribution to the relevant sectors, stakeholders and places of project location for public reviewing. Where the NEMC considers that they do not have the necessary expertise to evaluate the information contained in the environmental impact statement, they may decide to co-opt experts to advice them, or nominate qualified persons to form a team of experts for the evaluation process. In the course of the review process, a physical visit for site verification is necessary. When NEMC considers that the information provided in the developers environmental impact statement together with that available from other sources is not sufficient to permit a proper evaluation of the project's likely environmental effects, they have the power to require the provision of further information, or of evidence to verify the information that has already been provided. In this case, further consultation between the NEMC and the developer may be necessary; in particular to consider comments made by the team of experts, and possible amendments to the project proposal to satisfy the objections that have been raised.”
g) Approval of the EIS “Upon completion of the review, the Council may recommend to the Minister to approve or disproval the EIS. The Minister may, within thirty days, approve or disapproval the EIS subject to any condition as He or She may deem necessary.”
h) Record of decision “Whether or not a proposal is approved, there should be a record of decisions. Where appropriate an explanation for how environmental considerations were taken into account and weighed against other considerations must be documented. This record of decisions should be made available to NEMC and upon request to any interested party. Any conditions of approval must be reflected in the record of decision. NEMC shall maintain records of decisions on approvals or disapprovals of EIS.”
i) Appeals “The developer or any third-party, including the public, has the right of appeal to the Minister responsible for Environment, Environmental Appeals Tribunal or High Court against any decision or failure in the EIA process.”
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j) Project Implementation “Upon receiving a provisional environmental permit with approved terms and conditions, the developer may apply for an operational license or any other relevant permit from the Authorizing Agency. This is the project approval stage for implementation of undertaking.”
k) Monitoring “As an outcome of the EIA process, the environmental management plan including an appropriate monitoring programme is prepared. This programme forms the basis for overall monitoring of the project.”
l) Environmental Auditing “During the project execution, Environmental auditing shall be undertaken by NEMC or authorized body for periodic re-assessment of the overall project implementation”
m) Decommissioning “There shall be a decommissioning plan for rehabilitation or restoration of the affected environment during the closure of the project” 4.1.2.7 Forest Act (2002) The Forest Act, 2002 was passed to create a binding legal framework to implement the Forest Policy (1998). The Forest Act of 2002 provides for the conservation and management of forest resources in Tanzania, largely by promoting community and village involvement in forestry management and use. Consistent with the National Forest Policy, the Act promotes sustainable management of forest resources and favours forest-related development over clearing forest land for agriculture. The act divides forests into four types: national forest reserves; local authority (district) forest reserves; village forests; and private forests. Village forests are those declared by village governments on village lands, while private forests are often located within village boundaries and so, although privately owned, are subject to village control. Village governments have the right under the Act to declare village forest reserves over any village land. Village governments have wide discretion to manage these areas under their own authority and priorities. Any change of declared village forest for other investment and use need approval of village assembly. 4.1.2.8 Land Use Planning Act (2007) Although village councils have great authority over village lands, including village forest lands, as a practical matter the administrative requirements, including developing land use plans, often act as a barrier to meaningful exercise of those rights. The Land Use Planning Act attempted to address this problem somewhat by providing for easier recognition of village land use plans. Under this Act, once a village government has adopted a land use plan and has had it vetted by the village assembly, the village can then begin to implement the plan without further approvals or delays. Village governments have similar general power over their lands under use plans and by laws. Nonetheless, most village land is not currently covered by approved land use plans.
4.1.2.9 Other relevant acts and regulations
Other acts and regulations relevant to biofuels include: • The Water Utilization (Control and Regulation) Act (1974) • National Environmental Impact and Auditing Regulations (2005) • Wildlife Conservation Act (1978) • The Sugar Industry Act (2001) • The Food Security Act (1991) • Agriculture Act (2003) • Energy and Water utilities Regulatory Authority Act (2001) • Occupation Health and Safety Act (2003) • Employment and Labour Relations Act (2004) • Local Government (Urban and District Authorities) Act (1982)
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• The Plant Protection Act (1997) • The Industrial and Consumer Chemicals Act (2004) • The Public Health (Sewerage and Drainage) Ordinance • The Food Control of Quality Act (1978) • The Protection from Radiation Act • The Pharmaceuticals and Poisons Act • The Tropical Pesticides Research Institute Act
5.0 Strengths, Weaknesses, Opportunities and Threats (SWOT) Analysis
This section of the report will analyse different aspects of biofuels production and consumption, using the SWOT analysis tool. The strengths and weaknesses of ethanol and biodiesel are reviewed separately. The advantages and disadvantages of major feedstock (for ethanol and biodiesel) are studied individually. Finally, biofuels’ impact on land, the environment, the social economy and the government are analyzed.
5.1 Biofuels
As discussed fully above, biofuels are of two varieties, ethanol and biodiesel. The advantages and disadvantages of promoting one or the other are reviewed as follows: 5.1.1 Ethanol Strengths
• Sugar easily processed to alcohol • Extensive experience of bioethanol in Brazil • Contains no sulphur, olefins and benzene • Small amounts not toxic, biodegradable
Weaknesses
• Low blends of ethanol can increase emissions of volatile organic compounds
• Processing uses large quantities of water • Increased emissions of nitrogen oxide, linked to acid rain
(depends on feedstock) • Large land demands, often replacing environmentally
valuable land (such as forests, wetlands, etc.) • Relatively low yields require large amounts of land and
makes substantial reductions in fossil fuel use unlikely. Opportunities
• Non petroleum-based fertilizers • Local energy security (so long as ethanol is produced
in huge quantities and not exported) • Creating of new agro industry in rural areas with
associated socioeconomic development • Foreign earnings from new value-added exports
Threats
• Large volumes of nutrient rich waste water - eutrophication• Spills • Accelerated deforestation, further contributing to climate
change and impacting biodiversity • Taking large tracts of land out of local food production in
favour of more profitable biofuel production, thus substantially raising food prices and increasing poverty.
5.1.2 Biodiesel Strengths
• Biodegradable • Lower emissions than diesel, esp. sulphur,
hydrocarbons, CO and toxins • By-products used for other manufacturing, such
as soap • Low toxicity • Can be produced in small quantities as compared
to ethanol
Weaknesses
• Processing uses large quantities of water • Processing needs methane, requiring imported petrol
chemicals • Emissions from processing - hexane • Increased emissions of Nox, linked to acid rain • Large land demands, often replacing environmentally
valuable land (such as forests, wetlands, etc.) • Relatively low yields require large amounts of land and
makes substantial reductions in fossil fuel use unlikely.
Opportunities
• Non petroleum based fertilizers • Reduce imports of oil • Rural commercial activities and socioeconomic
development
Threats
• Spills • Burning glycerine for energy has high environmental risks • Accelerated deforestation, further contributing to climate
change and impacting biodiversity • Taking large tracts of land out of local food production in
favour of more profitable biofuels production, thus substantially raising food prices and increasing poverty.
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Ethanol production in Tanzania has the advantage of building upon the existing sugar industry and greater worldwide experience in producing ethanol (as opposed to biodiesel). As discussed below, however, the feedstocks best suited for ethanol production in Tanzania are also food crops, raises concerns about precipitating competition between growing food and growing fuel. The resulting impact on food prices could easily wipe away any economic gains from the biofuels industry. Moreover, to the extent that biofuels production is likely to occur on current forest land, rather than agricultural lands, could continue the trend towards high rates of deforestation in Tanzania, impacting the countries valuable forest land and exacerbating, rather than combating, climate change. Because most biofuels production likely would not be considered a “forest-related” use, it would not be favoured under the Forest Policy or the Forest Act. Finally, given the volume of ethanol that would be required to make a significant reduction in current use of imported oil, it is unlikely that anything less than a maximum development scenario would have anything but minimised impact on the energy trade imbalance. Many of the same concerns would apply to biodiesel production, which in Tanzania would largely rely on Jatropha as its feedstock, an oil crop that is currently not entirely understood by the biofuels industry (existence of contradictory information), and raises some concerns about toxicity and worker safety
5.2 Ethanol feedstock
In Tanzania, ethanol would most likely be produced from sweet sorghum, sugar cane and cassava. Each of these crops is also grown for food. 5.2.1 Sweet Sorghum Strengths
• Highly tolerant to o drought o saline conditions o temperature fluctuations o waterlogging
• Potentially 2-3 crops per year, growing period 3-5 months
• Adequate experience/ research • Conversion to ethanol cheap compared to other
varieties - study from India shows $1.74 to produce a gallon of ethanol, compared with $2.19 for sugarcane and $2.12 for corn. (Agricentre website).
• Efficient energy balance, producing 8 units of energy per one energy input
• Less water requirements than sugar cane – One unit of water required to produce 1 unit of ethanol, compared to 2.5 units of water for 1 unit of ethanol in sugar cane
Weaknesses
• Would need irrigation in dry season • Sucrose peak short for sweet sorghum; processing has
to be organised efficiently after harvesting • Vulnerable to stem borer and shoot fly infestation • Little experience in terms of production for biofuels • Biannual (harvested twice a year) crop; more frequent
harvesting events will cause greater soil erosion
Opportunities
• Food and fuel simultaneously - sugar from stem and grains can be used
• Grain can be used as animal fodder • Capability of high energy varieties to be efficient bio-
energy crop • Bagasse can be used to power generation • Bagasse can be compacted and fed to cattle • Can be grown on dryer lands • Out-grower schemes have great potential – easy
crop for local farmers to grow
Threats
• Important food crop raising concerns about impacting food prices and exacerbating poverty, unless advancements can be made in growing food and fuel with the same plant.
• Extensive land requirements, potential resulting in impacts to forest land and biodiversity.
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5.2.2 Cassava Strengths
• No irrigation needed • Traditional small holder crop • Proven crop • Non- invasive • Highly tolerant to drought
Weaknesses
• Yields of ethanol lower than sugar cane • Labour intensive • Processing complex • Susceptible to water logging and salinity • Current Tanzanian yields are low (3T/ha)
Opportunities
• Yields can be increased (15T/ha) • Potential out-grower schemes
Threats
• Using a vital food crop for energy production has potential to substantially raise food prices and increase poverty.
• Forest clearing would exacerbate climate change and threaten biodiversity
• Diseases spread
5.2.3 Sugarcane Strengths
• Efficient conversion to bio-ethanol • Power from baggasse • Energy balance of 8 • Detailed research and experience • High productivity • Well-developed Tanzanian sugar industry • Tanzania has substantial water resources
Weaknesses
• Fuel may be needed for harvesting and for nitrogen fertilizers
• Lack of evidence on long term sustainability of sugar cane farming
• Due to high cost of logistics should not be transported a long way to the ethanol processing plant
• Requires substantial amount of water – reducing the water table and adding to running costs where irrigation needed
Opportunities
• Locally available bio-ethanol • Out grower schemes • Can be grown with low amount of agricultural inputs
(other than water) • Vinasse from sugar cane used for animal fodder • With good agricultural practices and high yields
sugar cane can still be carbon negative, even with petro-chemical inputs
Threats
• Forest clearance, leading to increased deforestation, carbon emissions and biodiversity loss.
• Food security. • Water necessary for large sugar projects is currently
being used to supply Dar es Salaam or other water stressed areas.
As described above, there are substantial questions raised by biofuels production in Tanzania. Without repeating those, the relative merits of different feedstocks for ethanol appear to favour sugarcane due to the pre-existing sugar industry and, in certain areas, potential water availability. Note, however, that Tanzania has suffered from drought conditions and is in the process of revising its water resources policies, which could have an impact on a water-intensive crop like sugarcane. Moreover, some of the water supplies considered for biofuels production could also be needed for Dar es Salaam municipal use. Also, please note that all three of these feedstocks are also food crops raising very real concerns about impacts to food prices and increased poverty. Sweet sorghum and cassava would likely lend themselves to poorer and drier regions.
5.3 Biodiesel feedstock
Biodiesel in Tanzania would likely be produced from Jatropha, palm oil or Croton megalocarpus.
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5.3.1 Jatropha Strengths
• Survives on marginal land and in arid environments • Yields of 32% Jatropha oil have been recorded from
India (locally only 15% has been obtained) • Additional products – soap • Perennial – harvesting has less impact on soil then
annual crops • Low tech tools to produce oil
Weaknesses
• Limited supply of planting seed • Need for significant amounts of irrigation, fertilizer,
herbicides and pesticides to achieve profitable production; there is an uncertainty about ideal input quantities
• Jatropha oil is hydroscopic – it absorbs water and nitrogen blanketing is used on containers. Highly acidic and degrades quickly.
• Oil must be de-gummed – viscosity must be reduced for use as fuel
• Seeds degrade as soon as they are picked; careful storage is needed
• Harvesting is continuous, adding to the costs • Harvesting is labour intensive – labour needs to be
cheap for companies to make a profit • Lack of experience of growth in Africa, all data from
India • Lack of reliable data on Jatropha globally • Seeds toxic, and emit toxic vapour when crushed
raising questions about worker safety
Opportunities
• New crop provides new research opportunities to Tanzanian universities
• New varieties might be bred to increase yields and productivity
• Village-based biofuels system based on Jatropha could stimulate rural economy
• Pressed Jatropha oil cake is high in nitrogen, phosphorous and potassium and can be used as an organic fertilizer
• Potential outgrowers schemes • Medicinal products from Jatropha could be used
locally • Carried out with alternative livelihood activities such
as bee-keeping (Jatropha is pollinated by bees)
Threats
• Diseases that affect Jatropha in Africa are unknown. • Host for cassava viruses • Seeds toxic – could these effect local biodiversity or
on workers • Pressed cake that is not composted is toxic, can kill
nematodes in the soil and reduce soil fertility • Yields unreliable/unknown in Tanzania
5.3.2 Palm Oil Strengths
• Perennial that is productive for 30 years • Lots of knowledge and research available • Intercropping • Some biodiversity can survive on plantations • Low labour intensity • High oil yields, especially from hybrids
Weaknesses
• Production of bio-diesel from palm oil is energy-intensive.
• Experienced negative environmental impact s worldwide like South East Asia
• Infrastructure requirements built around plantations are significant
• Tanzanian oil palms are mostly of non-hybrid variety • Strong demand for palm oil for consumption
purposes (Tanzania imports) • High water requirements limits cultivation to select
regions Opportunities
• Potential out-grower schemes • Palm oil available for cooking • By-products include biogas from seedcake, soap
Threats
• Palm oil industry is estimated to have led to the destruction of 10 million hectares of rainforest. How much habitat might be affected in Tanzania?
• Competition between oil for energy versus oil for consumption, raising the likelihood of increased food prices and increased poverty.
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5.3.3 Croton megalocarpus Future Tanzanian production of biodiesel would likely have to rely upon oil palm and Jatropha feedstocks, although both of these plants raise substantial questions and have important limitations. Much remains unknown about Jatropha, including its suitability for large-scale production in Africa, its toxicity and potentially low yields. Its refining process is complex and it would require large amounts of agricultural inputs, like pesticides and fertilizers, raising questions about its net energy balance. On the other hand, much of what we know about oil palm is not good, in particular its high water requirements (limiting it to cultivation in selected regions of the country (Kigoma and Rukwa)), its high energy requirements, producing a low “net energy balance”, its use as a food crop, thereby stimulating higher food prices, and its history of promoting deforestation and exacerbating GHG emissions. (Annex V includes a summary of recently developed guidelines for sustainable palm oil production.)
5.4 Biofuels and Issues
5.4.1 Biofuels and Land Strengths
• Land availability in Tanzania • Relevant policies and laws, e.g. Land Act (4)1999,
Village Land Act (5) 1999, Land Use Act 2007. • Manpower/Human resource (including
professionals and experienced). • Land institutions e.g. UCLAS, IRA, some informal
local institutions.
Weaknesses
• Poor coordination among institutions • Inadequate land use plans at village levels • Inadequate fund to prepare, monitor and implement
the land use plans • Villages undervalue their land • Undeveloped land data base • Land acquisition procedures are not clear and
transparent, leaving space for corruption • Unregulated influx of investors • Inadequate appreciation of biodiversity value of land
(i.e. semi and arid (marginal) land) • Lack of local infrastructure to make maximum use of
biofuels locally Opportunities
• Rooms for investment/investors • International principles and guidelines • Demand for biofuels (local and international).
Threats
• Loss of land to foreign investors • Displacement of people • Food insecurity
Strengths
• Species native to East Africa • Drought resistant • Detailed local knowledge of the crop • Seed oil content reported to be 30%
Weaknesses
• Little scientific research carried out on large scale cultivation
• Diseases • Seeds edible by local fauna - potential conflict • Compete with food crops for land
Opportunities
• Derivative products glycerol, biogas, animal feed • Agro forestry • Reclaim degraded lands
Threats
• Unknown crop results • Unknown impact of large plantations
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• Government support on biofuels projects • Out-growers use land for cash crop production
• Land degradation • Loss of biodiversity (due to monoculture). • Land conflicts • Cultural impacts • Land use changes
Impact to land rights from biofuels development is an important consideration. On the one hand, Tanzania has a substantial amount of “unused” land, much of it arable and influenced by a compatible growing climate. Moreover, Tanzania has engaged in important land tenure reform granting legal rights to individuals and communities, which could be used to ensure that these stakeholders receive a fair share of the economic benefits of increased biofuels production. On the other hand, as a practical matter, most villages and individuals are either unaware or “under-aware” of their rights, and few villages have engaged in the land use planning required to fully accept their management rights. Moreover, because villages have not yet engaged in land use planning, and do not have the resources or assistance to do so, new, large biofuels projects cannot be evaluated within a full planning context involving all relevant alternatives, thus allowing biofuels to dominate future development choices. 5.4.2 Biofuels and the Environment Strengths
• Existing policies and laws/ regulations: some are
• Water Policy of 2002 • Forestry Policy • Environmental Policy of 1997 • Agriculture Policy • Wildlife Policy • Livestock Policy • Land Policy • Environmental Management Act of 2004 • EIA and Audit Regulations, 2005 • Water Management (Use and Control) Act
• Political will supporting environmental protection • Water resources available in some areas
Weaknesses
• The existing legal framework does not address issues on biofuels
• Weak law enforcement and implementation of existing laws and policies
• Inadequate awareness and knowledge of biofuels
Opportunities
• Promoting pro-environment investment • Management of degraded areas, adding value (if
utilized) • May force increased land use planning (Mapping
& Zoning) • Reduce GHG emissions (depending on energy
balance and impacts on carbon emissions from deforestation)
Threats
• Loss of biodiversity • Soil degradation through leaching and intensive
fertilization • Food security • Habitat fragmentation • Blocking wildlife corridors • Deforestation and associated GHG emissions • Water pollution through chemicals • Water depletion • Threats to PFM (community management versus
private plantations) • Indirect Land Use Change (ILUC)
The environmental impacts of large scale biofuels development are potentially quite significant. Although often touted as a “green” alternative to fossil fuels, biofuels can have substantial environmental impacts, as discussed earlier in this study. The amount of land required to produce a sufficient amount of biofuels to meaningfully reduce existing oil imports and associated carbon emissions is very high. The environmental impacts of the land use changes necessary to convert that amount of land to grow fuel are significant, in particular because the most common competing land use is forestry, the destruction of which impacts both biodiversity and climate change. These kinds of impacts undermine some of the key reasons for producing biofuels to begin with. In addition, although in some areas Tanzania has more water resources than some countries, the amount of water necessary to grow some biofuel crops like sugarcane is substantial and could have negative impacts to aquatic ecosystems and human water needs.
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5.4.3 Biofuels and the Social Economy Strengths
• Big international market – demand for biofuels • Entrepreneurial spirit is developing in Tanzania • Available foreign and domestic interest to invest • Relatively low tech, easier to develop than more
high tech industries
Weaknesses • Ability to negotiate at community level is low • Lack of coordination involving local stakeholders • Investments running ahead of coordination • If poor working conditions for farm labourers – poverty
continues • Low level of the community awareness/ education on the
pros and cons of biofuels • Low domestic demand for biofuels • Corruption opens up for bad investors • Lack of criteria to identify good investors • Low domestic capital investment and lack of buy-in
strategy • Limited capacity of Tanzania human resources allows for
exploitation • Skewed gender ratio in business • Unequal power balance investors versus local people • Current low availability of feedstock • No processing plants and no biofuels currently available
Opportunities
• Replace oil imports and increased foreign exchange earnings
• Increased foreign investment • Job creation • Reduce migration to city centres • Investors can provide social services • Biofuels companies will provide markets for out
growers • Promote rural development • Decentralised energy systems e.g. MFP, local
transport • Increased donor funding opportunities
(public/private partnerships) • Funding for Tanzanian led agricultural research • Tanzanian blending policies currently being
developed • Flex-Fuel cars available to run on biofuels while
regular cars can run on biofuel blended petrol/diesel
• Foreign investors may boost capacity of national companies/investors
• Good foreign investors: increased taxes, corporate social responsibility
• Supporting industries could develop around biofuels industry (e.g. telecommunications, electricity, etc)
• Support for women to start businesses • Processing – value added investment rather than
raw material export
Threats • Reallocation of resources for biofuels production (labour
and land). • Food insecurity could actually exacerbate poverty, rather
than reducing it • Manipulation of land acquisition and use procedures by
the elite and investors • Very limited consultations with communities • Large-scale plantation model has a potential to exclude
the local community in the mainstream of economic development processes, while having even greater environmental impacts
• Displacement of communities and loss of their livelihoods
• Outbreak of diseases, and increase cases of HIV (migrant workers)
• Erosion of cultural values and practices • Dependency on fluctuating international markets and low
domestic market development • Risk to sell out country assets to foreign biofuel investors • Most biofuels exported • Crops fail (drought, pests etc)
5.4.4 Biofuels and Government Strength
• National Biofuels Task Force (NBTF) in place • Energy Policy (2003) • Revised Petroleum Act (2008) underway • Available relevant central policies, laws and
regulations • Political will (priority within the government) • Existing institutions, educational systems,
international exchange, etc. • Current oil import quantities low compared to
western countries making it easier to replace with
Weakness
• Some key stakeholders are not in the NBTF • No steering committee to oversee action proposed by
NBTF • Inadequate coordination between different sectors
promoting biofuels • Lack of information sharing and networking (within &
outside the country) • No bio energy/biofuels policy/guidelines and laws • Contradictory policies and laws, • Inadequate awareness on biofuels by policy makers
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biofuels
leads to uninformed decision making • Inadequate government funding • Lack of preparedness by the government
Opportunities
• Increasing number of biofuels actors/investors • Increasing political will • Growing interest by development partners • Biofuels guidelines could help develop
agricultural sector • Learning from global perspective • Coordinated strategy and policies • Low blending today - National Blending using
produced biofuels
Threats
• Foreign governments impose policies on Tanzania • Inter-Ministerial infighting • Increased corruption at local, regional and national
levels
From a socio-economic standpoint, although biofuels would seemingly present great opportunity (jobs, foreign exchange, rural development, reduced dependence on imported oil, etc.), threats to land and the environment are considerable (forests, biodiversity, land use change, displacements, etc.). Meanwhile, the Government is not keeping pace with private sector initiatives, creating an unregulated land grab and potential abuse of naïve rural communities. As discussed more fully in the next section, the most substantial “structural” issue raised by large scale biofuels production is the current lack of a coordinated policy and regulatory response from the GoT. Without a policy structure in place, unregulated biofuels development is having negative impacts on other government policy priorities, as local villages sell off actively managed community forest lands in favor of biofuels development. Unless the GoT takes aggressive steps to regulate biofuels production so that it can be managed together with other competing government policies, the current biofuels boom could substantially undermine ongoing reform efforts in land, water and forestry. Investment guidelines are obviously urgently needed to thwart some of the impending threats and abuses.
6.0 Issues of Concern about Biofuels within Tanzania
6.1 Coordination of policy within Tanzania
There is currently no coordination of biofuels policy within Tanzania, although the Tanzanian Biofuels Task Force is in the process of drawing up policy guidelines. Investors are able to receive necessary investment, land and environmental approvals to start plantations without any concrete government policy. Understandably, foreign investment in Tanzanian biofuels is being encouraged as it has the potential to aid rural development and local livelihoods, improve energy security and reduce oil imports. However, the way in which investments are being carried out needs to be coordinated effectively if the burgeoning biofuels industry is going to benefit a broad section of society within Tanzania and keep negative social and environmental impacts to a minimum. Government policy needs to address all of the following concerns about the biofuels industry in Tanzania highlighted in this study.
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Many key stakeholders are currently not being included in the National Biofuels Task Force (NBTF). Box 3 shows composition of the current biofuels taskforce. The biofuels industry also affects the affairs of the following ministries that are currently not being included in the taskforce, including the Ministry of Natural Resources and Tourism (which is responsible for managing the nation's forestry resources) and Prime Minister’s Office – Regional Authorities and Local Government. In addition, other, non-governmental stakeholders should also be involved in the formation of government policy including humanitarian and environmental NGOs, academia and research and development institutions. Another large area of concern is the absence of a multi-sectoral technical steering committee that is able to monitor and evaluate the actions proposed by the NBTF. This may help in the formation of a policy that takes the needs of all relevant stakeholders into account. Overall, relying on a large and cumbersome government task force to oversee a fast-moving, private sector development boom may offer limited success. In the two years it has been in existence, the NBTF has produced few tangible results and no clear set of national policies or guidelines to help manage the industry. Without concrete permitting requirements or regulatory mandates, another large government committee is ill-equipped to manage the project-specific impacts that are occurring from biofuels development. That said, given the overlapping policies and cross-sectoral aspects of biofuels development, intra-governmental coordination is vital and a task force of this kind seems the most likely vehicle for such coordination. The potential for the NBTF to develop policy and guidelines that undermine or contradict other policy initiatives related to forestry, land and water still seems likely and should be observed carefully. Some of the main issues regarding coordination highlighted by stakeholders (Biofuels stakeholder’s workshop) include:
� Lack of information sharing and networking (within & outside the country). More contact and networking is needed in order to help the development of the sector. A Biofuels Sharing Agreement (BSA) – for institutional capacity building should be established. More could be learnt from the experiences of other countries through visits, conferences, and increased information exchange
� Fast tracking the process could lead to many stakeholders views not being listened to, and the formation of policies that will fail to develop a biofuels industry in Tanzania that can benefit rural people and mitigate environmental effects.
Box 3: National Biofuels Task Force Composition
� Ministry responsible for Planning
� Ministry of Energy and Minerals
� Ministry responsible for Agriculture
� Ministry of Labour, Employment and Youth Development,
� Ministry of Finance,
� Vice President’s Office –Division of Environment
� Ministry of Water and Irrigation
� Ministry responsible for Lands,
� Attorney General’s Chambers,
� Tanzania Investment Centre,
� Tanzania Petroleum Development Corporation,
� Community Finance Company Ltd,
� Tanzania Sugar Producers’ Association
(Source: MEM, 2007)
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� A mechanism should be developed to aid cross-ministerial coordination in the government. � Currently there is an inadequate compliance of agreements, TORs and contracts that
currently exist between communities and biofuels companies. � Research and development is needed to provide figures and facts about biofuels industry.
Tanzanian research institutions could take the lead in future research into biofuels and build up considerable expertise if they are closely involved in the development of the biofuels industry and adequately supported financially and politically.
� The lack of biofuels investment guidelines is slowing down private sector initiatives, as companies may be unsure about how future policy may affect their investment.
� The biofuels industry in Tanzania should be more transparent; a national biofuels database should be established in order to aid transparency and knowledge about the status of biofuels in Tanzania.
� The work of the NBTF should be more transparent, special attention should be paid to this in terms of financing the policy development process.
6.2 Environmental impacts
6.2.1 Feedstock production 6.2.1.1 Energy balance Energy balance refers to the amount of energy required to produce biofuels compared to the energy that comes out of the process (Dufey, 2006). The energy that comes out of the process should be greater so that production is viable. The net energy balance also is highly important in determining whether and to what degree biofuels reduce emissions of Greenhouse Gases (GHG), compared to traditional fossil fuels. For example, if ethanol is made from low yielding crops that need high inputs of petroleum-based fertiliser they could generate more GHG than petroleum fuels do. The calculation of the net energy balance is a complex issue that needs to take the entire fuel cycle from feedstock production to consumption into account; in most cases consumption is excluded. The energy balance will depend on the type of feedstock used and the ways in which they are cultivated. This makes the use of relatively new crops to Tanzania such as Jatropha controversial as it is uncertain what quantity of fertilizers and pesticides will needed in order to achieve commercially viable yields. Feedstock such as sugar cane has been very energy efficient in Brazil, with the energy balance ranging from 3.7 to 10.2 units, the average being 8.3 units (Langevfin, 2005). In flooding area where there is natural influx of nutrients through folding, no petroleum-based fertilisers are needed. This is unlikely to be the case in Tanzania due to the more pronounced dry season, and energy will be needed for drip irrigation. The sites chosen for crops will need to have relatively productive soils in order to make the energy balance efficient and reduce the need for input of petroleum based fertilizers. 6.2.1.2 Greenhouse Gases The type of land use changes required to cultivate biofuels is highly important in predicting the effects that growing feedstock will have on emissions of soil and vegetative carbon. The conversion of large carbon sinks such as tropical forests and wetlands to the cultivation of crops will result in greater emissions of soils carbon and carbon from plant matter than would likely be saved through the replacement of fossil fuels with biofuels (The Royal Society, 2008). Moreover, the loss of large carbon sinks could have additional negative impacts on the climate system reducing GHG absorption and leading to increased atmospheric concentrations of GHG. The use of artificial fertiliser should be regulated in order to prevent emissions of gases such as N2O which, can be released on site or from waters downstream from the site.
6.2.1.3 Genetically Modified Organisms (GMOs)
GMOs are being developed in order to increase yields to meet biofuels demand and reduce the need for pesticides. This may result in cross-pollination of wild relatives, thereby affecting
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biodiversity (Envirocare, 2007). Another potential risk is that some of the energy crops may become invasive. 6.2.1.4 Soils The uses of agrochemicals in large-scale biofuels plantations will adversely affect soil health. Nitrogen fertilizers can cause acidification of soils and surface waters. Intensive farming often causes soil erosion. This problem is often worsened in areas such as most of Tanzania that have periods of drought followed by heavy rains, the resulting loss of organic soil nutrients released into nearby surface waters causes eutrophication. Intensive activities carried out during harvesting can cause compaction of the soil, which affects soil structure, biodiversity and may result in water logging (IEA, 2002). In addition this can deplete soil nutrients and organic matter, reduce the soil’s ability to hold water, and reduce soil fertility. The frequency of harvesting and replanting is key as soil exposed during and after harvesting is vulnerable to erosion. The removal of crop residue can lead to a reduction in soil quality, one study on corn fields in the US found that organic carbon was reduced by 35% when residue was harvested rather than retained (Wilhelm et al, 2003). The amount that can be removed without increasing associated GHG emissions depends on the feedstock. As a result of this perennial crops generally have less negative impacts on soil erosion than annuals. 6.2.1.5 Forests and biodiversity Clearing of large areas of natural forests habitats to give way to biofuels crop farming is a major concern as more plantations are set up in Tanzania. Currently areas of high biodiversity value that are outside established forest reserves can be cleared for plantations. This includes East African Coastal Forest (EACF) which has a high level of endemism as a result of being separated from other moist forests by savannahs and grassland. The establishment of plantations in areas of high biodiversity value could have dire consequences for biodiversity. In order to mitigate this impact, all areas that will be available for biofuels feedstock production need to have a proper land use plan and forest types within these areas should be designated according to their biodiversity and cultural values. In addition lack of land use planning and coordination makes habitat fragmentation of forested areas more likely unless provision is made to connect these areas through a series of wildlife corridors. Habitat fragmentation also results in biodiversity loss and is a major issue of concern. As new crops are introduced and used as feedstock the effects of these on the native flora and fauna is uncertain, some may turn out to be aggressive invasive species that may adversely affect neighbouring land. Characteristics of forests should be identified in a land use plan. The High Conservation Value (HCV) concept is an effective tool that can be used to carry this out, shown in Box 4. The HCV concept can be applied to all ecosystems and is now being used in many different fields including conservation and natural resource management, advocacy, landscape mapping and has also been adopted by government agencies and institutional donors. The process aids in identifying what is particularly important about an area rather than focusing on certain forest types or way in which timber is harvested. The management goals are that ’Management activities in HCVFs shall maintain or enhance the conservation attributes that define them and be characterised by a precautionary approach’.
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6.2.1.6 Water catchments Worldwide agriculture accounts for 70% of freshwater use, this figure may be as high as 90% in developing countries (Kojima et al, 2005). The two main concerns about water use involve the amount of water used for irrigation and the effects that farm run off will have on local water supplies and ecosystems. Water is a scarce resource in many parts of Tanzania. Water used for biofuels could reduce the amount of water available for other land uses such as food crops, and deplete the local water table. There is also the risk of large scale irrigation projects causing salinisation. This process may occur in irrigated areas which have low rainfall and the concentrations of minerals such as magnesium, sodium and calcium build up in the surface soil. This may also occur in coastal areas as a result of a reduction in the ground water level and the intrusion of marine water. As many biofuels projects in Tanzania are planned for both dry and coastal areas salinisation is potentially a large threat to the water supply and soil fertility. More studies need to be undertaken in order to assess the risk of this occurring. This threat is heightened with the cultivation of biofuels crops such as Jatropha. Jatropha is promoted as feedstock that can survive on arid lands, but realistically will need varying but large quantities of water for irrigation if to be economically viable. Agricultural run off will have a negative effect on water quality and needs to be reduced to a minimum. Less than half the amount of nitrogen applied from fertilizers is absorbed by plants, the majority of it going into surface waters, lost to the air or absorbed into the ground water (UNEP, 2000). Chemicals such as nitrogen oxides cause acidification and eutrophication. Eutrophication, characterised by rapid plant growth, leads to a reduction in oxygen present in the water negatively affecting freshwater ecosystems by decreasing species diversity, increasing plant and animal biomass, sedimentation (causing a reduction in the life span of lakes). These affects local livelihoods by making water undrinkable, foul smelling and hard to treat, causing important commercial species of fish to disappear and impeding water flow and the navigability of a river, and reduce the amenity value of water leaving the water hazardous to human health. The WHO report that as many as 220,000 people die each year from pesticide poisoning, with millions affected by mild to severe effects each year (WHO&UNEP, 1990). Inorganic nitrogen
Box 4: Definition of High Conservation Value Forest The high conservation value concept was originally developed by the Forest Stewardship Council (FSC) to help forest certification and is now being used for all types of ecosystems. The key to the concept of HCV Areas is the identification and maintenance of High Conservation Values (HCVs). The Network focuses on the following six main types of High Conservation Values: HCV1- Areas containing globally, regionally or nationally significant concentrations of biodiversity values (e.g. endemism, endangered species, refugia). HCV2 - Globally, regionally or nationally significant large landscape-level areas where viable populations of most if not all naturally occurring species exist in natural patterns of distribution and abundance. HCV3 - Areas that are in or contain rare, threatened or endangered ecosystems. HCV4 - Areas that provide basic ecosystem services in critical situations (e.g. watershed protection, erosion control). HCV5 - Areas fundamental to meeting basic needs of local communities (e.g. subsistence, health). HCV6 - Areas critical to local communities’ traditional cultural identity (areas of cultural, ecological, economic or religious significance identified in cooperation with such local communities) Source: HCV Resource Network Charter, Version 1 September 2006
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Box 5: An expansive model for sugar cane ethanol production in Brasil The expansion model for the integration of sugar cane with prevailing land uses aims to avoid displacement of livestock to remote regions, causing leakage effects such as deforestation. It also promotes milk and cattle intensification and investment opportunities for the local economy. The expansion model has the potential to reduce the displacement of livestock and therefore the risk of indirect off-site deforestation caused by the establishment of new cattle ranches in remote forested areas. Explanation of model The expansion model integrates sugarcane cropping with livestock husbandry by treating the bagasse produced (which normally has a low digestibility) with high pressure steam, steam-hydrolyzed bagasse can then be sold on or given to local farmers. Benefits Animal production In Brasil this resulted in reducing the amount of land needed to sustain a herd of cattle by roughly 30%. Farmers income can increase not only due to the high productivity, but also due to income from sugarcane on the remaining available land. Local economy The dependence on one economic sector is reduced, diversifying the local economy decreases farmers’ vulnerability to varying profits. This will also increase opportunities for labour and increase the range of production chains and services. Local social structures As livestock producers will not move and instead intensify production locally the existing supply markets for goods and services will improve and grow. Environment The increased production may discourage farmers from migrating to remote regions, which will reduce the impact of farming on biodiversity and the avoided deforestation will also reduce the loss of standing carbon. Increased production of sugarcane ethanol lead to decreased GHG emissions globally and locally. Sugar cane industries In order for the model to work support is needed from the ethanol plants, who initially need to sell the bagasse at no profit for the system to be economically viable. However this cost could be covered if the operation was carried out under a certification scheme.
Source: Sparovek et al, 2007
fertilizer accounts for 60% of anthropogenic nitrogen, the resulting disruption of the nitrogen cycle has serious implications for climate change and ozone depletion (Worldwatch Institute, 2007). As hybrid crops are developed it is likely that more nitrogen pesticides will be needed. Sugarcane requires substantial herbicides when grown on a commercial scale. In Brazil as sugarcane farmers switch to practices that do not involve tilling the land more weeds are present, increasing herbicide use (Coelho, 2005). However with sugar cane the amount of inorganic fertiliser used can be reduced by recycling vinasse and filter cake. Oil seed crops such as Jatropha and other perennial crops generally have much lower water demands and need less chemicals than annual feedstock crops. In addition de-oiled cake can be used as a fertilizer, although the nitrogen contained in this can still have a mild negative impact on soil health. In India Jatropha oil itself has been used as a biodegradable pesticide. However as a new commercial crop to Africa it is unsure how much water will be required for it to produce high yields. 6.2.1.7 Indirect Land Use Change (ILUC) ILUC occurs when one form of land use is displaced to another area. People forced to farm in other areas will need more land for cultivation. Some of the current proposed operations pose a large threat to biodiversity as they plan to employ a large workforce most of whom will have to be brought in from elsewhere. This influx of settlers to an area will have a significant impact and natural habitat will have to be cleared in order to build houses. A casual labour force could have an impact on the surrounding area and local forest reserves if they are involved in extractive activities such as logging during lax times when employment activities are not available on the plantations. If biofuels are established on fertile soils, food crop cultivation may be displaced to other, more marginal, areas, causing more land to be cleared, potentially reducing food crop yields, and increasing deforestation. Taking land out of food crop cultivation could also raise food prices, thus exacerbating poverty. Intensification of land use activities have the potential to reduce the amount of land needed, however this has to be balance with the negative environmental effects that can be caused by chemical inputs. Box 5 shows an expansion model developed in Brazil that is sensitive to socioeconomic and environmental concerns and can improve land efficiency (Sparovek et al, 2007).
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6.2.1.8 Discharge of effluent from processing of biofuels Due to the current status of biofuels production in Tanzania this is a lower priority than other issues linked with biofuels in Tanzania. However in order to maximise both production and mitigate negative environmental impacts in the future the following areas will need to be addressed:
� The amount of effluent discharged from biofuels processing plants. This should be controlled and regulated in order to keep the amount reduced to a minimum
� The efficiency of the process of converting feedstock to bioethanol and biodiesel should be maximised by using farm inputs such as bagasse from sugar cane in order to reduce the amount of exterior inputs required.
6.3 The EIA process
Many stakeholders voiced their concerns at the stakeholder workshop held in Morogoro Region about the effectiveness of the current EIA process under NEMC. One large part of the criticism stems from the EIA carried out in Kilwa for Bioshape Tanzania Ltd. The report described intact miombo woodland as being degraded and did now identify that parts of the land bought by Bioshape was East African Coastal Forest, an area that would be classed as HCVF type 1, containing endemics and threatened species. Bioshape did carry out two International EIAs, a carbon mass balance and an energy balance for the Jatropha plantation after this in order to comply with regulations in the Netherlands (Wilbert Hermans, Pers. coms.). Most of the biofuels projects in Tanzania started without approval of EIA. This is due to lack of coordination within the government and lack of resources within NEMC. Some key issues that have been identified include:
� The quality and depth of analysis provided by consultants is highly variable with some key aspects either not covered or given insufficient attention.
� The review process needs to be more robust and currently may fall short as a result of insufficient staff numbers and time; financial restrictions which may prevent NEMC staff from ground-truthing EIA work; a lack of data generated independently of the consultants with which to assess certain claims; NEMC staff also need to build up experience, competency and confidence in order to undertake the critical, rigorous analysis which is needed.
� There is a lack of process support and generic guidance for staff in order to determine the technical specifications needed to carry out different types of EIAs.
� There is a lack of policy and process guidance for practitioners on what to look for, how to monitor and determine non-compliance and how to make appropriate responses.
� The level of co-ordination and in some cases co-operation between ministries can be inadequate (including between Vice Presidents Office and NEMC) which affects the quality of the EIA process and certificates.
� Monitoring and enforcement work may fail to ensure that issued Environmental Certificates are complied with. The institutional responsibilities for this work have been confused and resource and capacity constraints undermine the effectiveness of the regulatory system.
� Under the EMA, officers need to be gazetted as environmental inspectors before they can undertake compliance and enforcement activities however it is questionable whether this is currently the case.
At present, the EIA process is the only true regulatory mechanism in place to evaluate new biofuels projects and the full range of impacts discussed in this study. As a practical matter, this process is the only means for cross-sector coordination among relevant ministries. As a legal matter the full range of impacts should be addressed an analyzed. The capacity limits raised in comments above, indicated that this only existing safeguard – the EIA process – is woefully inadequate to manage the biofuels development process. It does provide the best project-specific regulatory mechanism, and would be a likely vehicle for implementing future policy and regulatory changes.
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6.4 Food security The competition between food crops and energy crops has become an international debate. Growing sugarcane to produce ethanol, for example, may result in land area devoted for food production being reduced, eroding local food security and causing shortages. Price increases for some biofuels crops that are also staple foods put food security at risk, raising prices and increasing, rather than decreasing, poverty. This is likely to happen if it is more profitable to sell food crops to biofuels producers. The FAO in 2006 reported a historical low in world stocks-to-use ratio for grains and world cereal reserves falling to the lowest level in more than two decades coinciding with record levels of demand (surpassing global production) for biofuels crops. 6.5 Land use and ownership For a viable biofuels industry, the land must also be capable of supporting sufficiently high crop yields for production in order to be economic. The need for arable land in growing feedstock for biofuels may threaten the land available for growing food crops. Tanzania Investment Centre has a major role to play in allocating land for investment purposes. TIC has developed a Land Bank, with several land plots for potential investment opportunities all over Tanzania. However, this has not been very transparent and it is uncertain what analysis if any has been done on the land being offered in terms of the existing land use. Biofuels farming may result in the concentration of land ownership and land access into fewer hands of investors. As a result of this biofuels initiatives should not result in increased marginalization and poverty for poor farmers. Particular concerns include:
� Inadequate funding to prepare, monitor and implement the land use plans; � Rural communities are unaware of the value of their land and will put too small a price on
their land when negotiating with companies; � Inadequate land use plans at national and village levels; � Outdated land data base; � Unregulated influx of investors wanting to buy large tracts of land; � Land allocation for biofuels plantations should take into consideration other competing land
use requirements; � Inadequate appreciation of the value of land that is being inaccurately represented as semi
and arid (marginal) land. Recognition needs to be made of the value of some land which is being put forward as “marginal land”
• Although degraded land for energy crops could help in the rehabilitation of soil; • Need to avoid large-scale farmers taking over most productive land to grow biofuels crops
leaving out small-scale farmers who lack ability to compete; • Biofuels farming resulting in the concentration of land ownership and land access into fewer
hands of investors; • The lack of proper and effective coordination in the whole land acquisition process.
6.6 Land acquisition process Issues to address on the concerns over land acquisition process for biofuels investment are:
� Share of investment to villagers, � Highlight schemes for compensating communities, � Transparency in land allocation, � Enforcement of relevant laws that define land allocation and ownership.
Currently communities may not be aware of their land rights nor the impact that selling the land will have on their livelihoods in the long term.
More resources are needed for the preparation and monitoring of land use plans. These should be prepared and implemented with the village, local government and national land use planning commission.
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Box 7: The Komati Basin Downstream Development project, Swaziland
The aim of this project was to alleviate poverty in rural agricultural communities through participation in commercialized, irrigated businesses. The project consists of 4 main parts;
� The setting up of smallholder farmer associations in the form and composition decided by the members to best further the aims of the project
� Design and implementation of measures to mitigate negative environmental and social impacts of the scheme
� Development of irrigated smallholder farms on approximately 7400 hectares of land along the Komati River. The majority of the smallholders growing sugarcane
� Monitoring of the measures designed to mitigate the environmental and social impacts.
The KDDP has demonstrated an enviable success in getting farmers organizations to diversify and vertically integrate their commercial production. To date about 3 700 hectares of production land has been planted to sugarcane and 350 hectares has been dedicated to diversified agricultural production. A total of 239 homestead garden businesses have been established. Other business enterprises established include dairy, poultry, bee production, beef feedlot, haulage and water usage monitoring.
Box 6: Biofuels in Kizawgu, Northern Ghana
A Norwegian company, Biofuel Africa, a subsidiary of Bio Fuel Norway
bought 38,000 hectares of land from a rural community in Northern Ghana on which it wanted to create “the largest Jatropha plantation in the world”. The
company bypassed official development authorization. The land agreement was
instead signed with the village chief’s thumb print, and the implications of the
agreement not properly understood. A myriad of promises were made to the
community such as the provision of jobs and improved livelihoods none of
which actually materialised and were instead a list of campaign gimmicks made
in order to gain community land. The forest plays important lives in many of
the local people’s livelihoods and the land cleared ended up destroying forest
products such as sheanuts which the community are dependent on. Although the
community successfully appealed against the development this wasn’t after
2600 hectares of forest had been cut down, leaving a community even more
vulnerable in an area which had already suffered from drought.
Source: Nyari, 2008
6.7 Displacement of communities Large-scale biofuels introduction may force communities out of their territories. Loss of their territories will have long-term opportunity costs for farming communities. Communities in areas identified suitable for biofuels production such as Kigoma, Kisarawe, Kilwa, Bagamoyo, etc have distinct territories with well-defined natural boundaries, settlements, rivers, etc. Their territories have been used for small scale farming, and cultural beliefs. Some observers have noted that If investments in large-scale biofuels introduction force these communities out of their territories, the loss of their territories could plunge the farming communities into economic and cultural exploitation, as they will be labourers in foreign owned biofuels plantations (Envirocare, 2007).
6.8 Community relations and rural development
Biofuels represent important opportunities and challenges for sustainable development, both globally and domestically. Biofuels have the potential to help to improve rural employment and livelihoods. However there are currently many concerns about how the industry is going to benefit local people. Although promises have been made to local communities in terms of support for social and economic activities e.g. employment, incomes, building schools, dispensaries, roads, etc., these are not being monitored and regulated and there are currently no legally binding agreements to hold companies to fulfil these promises, leaving communities in a highly vulnerable position. This has happened in biofuels development in other parts of Africa, as shown from the case study in Ghana (Box 6). There have been calls for an independent watch dog being involved in order to oversee the investments made into local communities. This could also assess the investors’ corporate social responsibility policies and make sure that they are holding themselves to these standards.
A large fear is that local people will only be employed as labourers in foreign owned biofuels plantations, and that this will not result in significant improvements in livelihoods. Out growers schemes run in conjunction with the large scale biofuels farms could aid rural development in terms of skills sharing, improvement of agricultural expertise and increased revenue to local communities. Box 7 gives an example of successful out grower’s scheme that have contributed positively to rural development.
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7.0 Key Policy Recommendations
7.1 Coordination 7.1.1 Coordination of Biofuels and Forestry Policies Currently, the Ministry of Natural Resources and Tourism is not a member of the NBTF. As the ministry primarily responsible for forestry policy, this is a major oversight. Both within Tanzania and internationally, the most likely and most damaging land use change precipitated by biofuels production is clearing forest land. The impacts to biodiversity and GHG emissions have been adequately described. Intra-governmental coordination on this issue is critical to ensuring that recent gains from ongoing forestry policy and practice in Tanzania are not quickly erased by the biofuel boom. Incorporating the MNRT into the NBTF is not enough; a specific set of strict guidelines and evaluations should be established through a joint effort with the MNRT for biofuels projects that involve clearing forest land. This evaluation should include an assessment of biodiversity and climate impacts from the project. In addition, education and capacity building efforts related to local involvement in sustainable forest management must continue and be incorporated into all land use planning efforts and meaningful discussions with local communities about development options. 7.1.2 Moratorium on land acquisition and land clearing until guidelines are set Currently, private sector interest in biofuels in Tanzania is developing rapidly, while Government capacity to manage the situation is lacking. There is an uncontrolled land acquisition, with negative impacts related to corruption, transparency, forest clearing. Rural communities are not sufficiently being protected from dubious investors and false promises. Until the Government’s investment guidelines are published, the NBTF should issue a moratorium on all biofuels investments related to land acquisition and land clearing. Private investors should be clearly informed of this moratorium. 7.1.3 Regulations and guidelines set quickly and with greater stakeholder consultation The development of biofuels investment guidelines has already been on-going for two years. This process needs to be quickly arrived at a (interim) conclusion so as not to stall or thwart desirable investment. At the same time, however, the guidelines must be thorough and not neglect important environmental, economic and social issues.
More stakeholders should be involved in the work of the NBTF. Policies formed around biofuels should take into account the views of all stakeholders in order to be effective. This includes research institutions and universities such as Sokoine University of Agriculture, University of Dar es Salaam and the private sector such as NGOs and CSOs, community representatives, etc. 7.1.4 Certification, sustainability criteria and standards Tanzania should adopt the highest possible sustainability standards. Already, world developments in the biofuels industry are seeing preferences given to producer countries with high standards. The EU is developing sustainability criteria which will give preference to those biofuels complying to these criteria. Hence, biofuels developed under highest standards are likely to have a market advantages and be purchased at favourably higher prices. Future Tanzanian biofuels need to ensure access to the primary export market in the EU. The Tanzanian NBTF should closely monitor developments in the EU related to the establishment of sustainability standards and subsequently adopt those standards as their own.
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7.1.5 Blending policy Government blending policy should be 10% ethanol in petrol and 20% biodiesel in diesel fuel, progressively implemented to achieve these targets by 2018. 7.1.6 Detailed monitoring procedures of biofuels companies set The Government needs to require transparency from biofuels investors due to their obvious impacts on rural communities and the environment. Stringent technical and financial reporting standards – submitted quarterly to all necessary on-line Ministries – would lead to wider knowledge sharing and greater collaboration within the Government. 7.2 Environment and Biodiversity 7.2.1 Strengthen EIA process under NEMC The environmental and social impacts of bio-energy development could be used to focus energy into improving the rigor of EIA's and encourage sustainable development in Tanzania. Many of the following issues could be tackled under the DANIDA-funded EISP which provides NEMC and the VPO with approximately $700,000 US per year:
o Make the list of EIA consultants publicly available; o Consistency and quality could be improved by using a risk scoring system for impacts
vis-a-vis receptors/health/biodiversity/livelihoods. Priorities and a library of enforceable conditions should support these priorities;
o The process needs to be more transparent, with the guidelines made more accessible to the public;
o Encourage greater public engagement; o Greater technical assistance from International EIA experts could help build capacity.
Reports could be sent out to experts in each particular field; o Give greater autonomy/ freedom from political pressure; o Independent expert panel to assess EIA; o Greater coordination between NEMC, TIC and the Vice President’s office; o An enforcement policy that sets out the framework by which NEMC respond to
breaches of the law related to the seriousness of the environmental, health and economic impact and the attitude of the offender. This could include a site warning, warning letter, control notices, stop orders, prosecution, injunction etc.
7.2.2 Biodiversity and ecosystem protection Areas of High Conservation Value should be set aside as no-go zones these include but should not be limited to:
o Ecologically sensitive areas such as coastal forests, miombo woodlands, etc o Areas that provide critical ecosystem services such as watersheds o Areas critical to local communities’ traditional cultural identity o Areas fundamental to meeting basic needs of local communities such as subsistance,
heath, etc GIS studies should be carried out in order to aid the rapid assessment of HCVs in areas where biofuels investors are targeting. In order to avoid habitat fragmentation and human wildlife conflicts, wildlife corridors need to be established 7.2.3 Protection of resource base Effective monitoring of pollutants should be carried out by biofuels companies. This should include monitoring for nitrogen and other pollutant levels present as a result of pesticide and fertilizer use. Perennial crops are likely to have far less impact on soil health. In-depth hydrological studies should be carried out in order to assess the amount of water available for irrigation and the potential impact on downstream consumers.
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7.2.4 Essential baseline data needs to be collected Baseline data needs to be collected in order to make sophisticated and informed decisions about a biofuels policy. A study funded by the World Bank in Mozambique (2007) looked at food security, land use patterns and areas for protection. In Tanzania, the following data would be valuable:
• A national land mapping exercise; • GIS studies identifying areas of High Conservation Value; • A thorough food needs scenario to 2050. This should evaluate current food production,
potential for increasing productivity of current production, current food requirements, population growth trends, extrapolated future food needs, and other “set aside” land use needs not related (directly) to food production, such as watershed protection, water source protection, anticipated areas of new biodiversity conservation, cultural needs, etc.
7.3 Socio-Economic 7.3.1 Biofuels companies form partnerships with the government and NGOs External expertise will be needed in order for companies to effectively implement best social and environmental standards set out in an EIA. There is also a great opportunity for Public-Private Partnerships (PPPs), which can also help in building up the capacity of local government. This may stimulate many rural development opportunities, such as cooperatives and small-scale out-grower ventures in surrounding areas to large scale plantations. This could also involve synergistic investments in which companies can share costs with the government for building up rural infrastructure both for biofuels plantations and services to rural people. Mechanisms should be developed to ensure that commitments made to rural communities as part of biofuels projects are binding and implemented.
7.3.2 Progressive tax incentives Tax incentives should be given to companies along the lines of the Brazilian social fuel seal that rewards companies for buying feedstock from and investing in local farmers. (See section 2 above) 7.3.3 Land Acquisition The land acquisition process should be more transparent and needs to be coordinated more effectively on a national basis. In order for the land acquisition process to be more transparent, TIC’s database of potential land available for biofuels investor should be made public and easily accessible. Adequate compensation for land is also required. Fixed procedures/protocols governing how companies can approach communities need to be established. An independent body, which would act as a broker should attend the negotiations to ensure that communities are aware of their land rights and the various options available to them.
One-off payments for land are unlikely to be successful in the long term to create rural development. Instead long term payment schemes should be assessed. This includes communities becoming minor shareholders in the company and receiving regular dividends. 7.3.3 Land Use Planning Areas set aside for biofuels plantations should be subject to a land use plan. More funding should be available to prepare, monitor and implement land use plans, which should be developed as a precursor to project approval. Moreover, project developers should not directly fund or assist communities with land use plan development. Land allocation for biofuels plantations should take into considerations other competing land use
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requirements, especially with fertile land that could be used for food production and with forestry land that could be actively managed to produce sustainable forest products. This process would be helped if the current land data base is updated and properly takes into account present patterns of land use and land ownership. During land use planning each land type needs to be accurately described, and criteria used to describe lands as “marginal” or “degraded” should be clearly defined and documented. 7.3.4 Biofuels should be promoted for a range of uses Promote local consumption of biofuels for such uses as Multi Functional Platform, domestic energy for cooking, and local transport. Project developers should be encouraged to effectively use all by-products.
7.3.5 Encourage sustainable crops and land use practices Funding for research should be sought to look into increasing the land efficiency of biofuels and agriculture in general. This will help to create more biofuels expertise in Tanzania. New types/ varieties of crops with higher yields that would not compete with food crops should be researched and promoted, including advanced cellulosic ethanol. These should not be reliant on the heavy use of petroleum-based chemicals. Intercropping should be carried out of biofuels with food crops in order to reduce impacts on food security. The use of agricultural waste and forest residues for biofuels production should be encouraged. This should include second generation biofuels (for example, extracting biogas/ethanol from Jatropha seedcake). 7.3.6 Food Security Put policies in place that ensure food security is not adversely affected by biofuels. Biofuels policy should take into account long term goals of greater food security within Tanzania. An analysis of food security and available arable land needs to be carried out within Tanzania. Growing biofuels on degraded land and arid land would reduce competition with food crops and threats to food security (though reduce biofuels output and thus profitability). 7.3.7 Rural development In order to promote rural development out-growers schemes should be promoted whenever possible. Biofuels companies and appropriate government bodies should provide increased technical assistance and support to potential out-growers. 7.3.8 Relationship with the local communities. Promises made to the communities need to be written down in a legally binding documents. All community members should be involved in the decision making processes (not just village council members). Communities affected by biofuels investments should be educated on their rights and obligations. The rights of a community to access and use resources and produce adequate food should be absolutely protected in both the short and long term. Cultural values attached to land should be protected and respected by investors. Health and safety issues to farm workers should be clearly adhered to by investors.
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Annex I: References
• Biopact (2007). http://biopact.com/2007/04/dutch-propose-biofuels-sustainability.html • Coelho,S.T. (2005). Biofuels – Advantages and trade barriers. Presentation to the United
Nations Conference on Trade and Development, Geneva. • Dufey, A. (2006). Biofuels production, trade and sustainable development: emerging issues.
International Institute for Environment and Development, London • Eijck, J AND Romijn, H (2006). Prospects for JATROPHA Biofuels in Developing Countries:
Ana analysis for Tanzania with Strategic Niche Management. Eindhoven University of Technology, the Netherlands
• Euractiv (2008). http://www.euractiv.com/en/energy/member-states-push-revise-renewables-plans/article-173208
• European Biodiesel Board, Statistics, available at http://www.ebb-eu.org/stats.php • Envirocare (2007). The socio-economic and environmental impacts of biofuels industry in
Tanzania. Envirocare, Dar es Salaam • ESMAP (2005). Advancing Bioenergy for Sustainable Development – Guide for Policymakers
and Investors (Vol. I, II & III). Energy Sector Management Assistance Programme, the World Bank, Washington DC
• IEA (2002). Sustainable Production of Woody Biomass for Energy. Position paper prepared by International Energy Agency (IEA) Bioenergy, Paris.
• Gonsalvesj, J.B (2006). An Assessment of the Biofuels Industry in Thailand. Paper presented at United Nations Conference on Trade and Development, Geneva.
• GTZ (2008). A Roadmap for Biofuels in Kenya – Opportunities and Obstacles. German Technical Cooperation, Kenya.
• GTZ (2005). The Jatropha Booklet – A guide to the Jatropha System and its Dissemination in Zambia. German Technical Cooperation, Zambia
• GTZ (2005). Liquid Biofuels for Transportation in Tanzania. German Technical Cooperation, Germany..
• Kojima, M and T. Johnson (2005). Potential for Biofuels for Transport in Developing Countries. The World Bank, Washington DC.
• Langevfin, M (2005). Fuelling Sustainable Globalisation; Brasil and the Bioethanol Alternative. InfoBrazil http://www.infobrazil.com/conteudo/Front_Page/Opinion/Conteudo.asp.asp?ID_Noticias=972&ID_Area=2&ID_Grupo=9.
• Lenntech website http://www.lenntech.com/eutrophication-water-bodies/eutrophication-effects.htm
• Licht, F.O (2007). World Biodiesel Markets: The Outlook to 2010. • Nyari, B (2008). Biofuels land grabbing in Northern Ghana.
www.gaiafoundation.org/documents/biofuelsghana.pdf • Philip, H.D (2007). An Exploration of the Potential of Producing Biofuels and the Prospective
Influence of Biofuels Production on Poverty Alleviation among Small-Scale Farmers in Tanzania. Masters thesis; Department of Economic and Technological Change of the Centre for Development Research, Bonn University
• RLDC (2007). Jatropha Production in Semi-Arid Areas of Tanzania. Rural Livelihood Development Company, Tanzania
• Roberntz, P. WWF Sweden personal communication • Sawe, E.N (2007). Liquid Biofuels – Small Scale Production and Use (Issues, challenges and
opportunities). Paper presented at Eastern and Southern Africa Regional Workshop on Biofuels, Nairobi Kenya.
• SEA (2007). Policy, Legal and Regulatory Environmental Scan for Biofuels. The Swedish Energy Agency, Stockholm, Sweden
• Sparovek et al (2007). Sugar cane ethanol production in Brazil: an expansion model sensitive to socioeconomic and environmental concerns. Biofuels, Bioprod. Bioref. 1:270-282
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• The Royal Society (2008). Sustainable biofuels: prospects and challenges. Royal Society, United Kingdom.
• UNEP (2000). Global Environment Outlook. GEO-2000, Nairobi, UNEP; United States Department of Energy, Energy Information Administration, Germany Energy Data, Statistics and Analysis, available at http://www.eia.doe.gov/emeu/cabs/Germany/Oil.html
• UNIDO (2004) • URT(1998). National Forest Policy. Ministry of Natural Resources and Tourism. United
Republic of Tanzania. Government Printers, Dar es Salaam. • URT (1999). The Tanzania Development Vision 2025. United Republic of Tanzania.
Government Printers, Dar es Salaam. • URT (1999a). The Land Act, 1999. Ministry of Lands and Human Settlement Development.
Government Printers Dar es Salaam. • URT (1999b). The Village Land Act, 1999. Ministry of Lands and Human Settlement
Development. Government Printers, Dar es Salaam. • URT (2001). Agricultural Sector Development Strategy. Ministry of Agriculture and Food
Security. Government Printers, Dar es Salaam.
• URT (2002). Forest Act, 2002 (Parliament Act No. 14 of 2002). Ministry of Natural Resources and Tourism. Government Printers, Dar es Salaam,
• URT (2005). National Strategy for Growth and Reduction of Poverty (NSGRP). Vice President’s Office. Government Printers, Dar es Salaam.
• URT (2003). National Energy Policy. Ministry of Energy and Minerals. Government Printers, Dar es Salaam.
• URT (2008). Bioenergy Development in Tanzania. A paper presented to Biofuels Stakeholders’ workshop in Morogoro.
• URT (1997). National Environment Policy. Vice President’s Office. Government Printers, Dar es Salaam..
• URT (1997). National Land Policy. Ministry of Lands and Human Settlements Development.. Government Printers Dar es Salaam.
• URT (1997). Agricultural and Livestock Policy. Ministry of Agriculture and Livestock. Government Printers, Dar es Salaam.
• URT (2004). The Environmental Management Act. Vice President’s Office, Government Printers, Dar es Salaam. .
• URT (2003). Agricultural Sector Development Strategy. Ministry of Agriculture and Livestock. Government Printers, Dar es Salaam.
• TIC website: www.tic.go.tz • WHO (World Health Organisation) in collaboration with UNEP (1990). Public Health Impact of
Pesticides Used in Agriculture. Geneva, WHO • Wetlands International (2008). Biofuels in Africa. • Wilhelm, W.W. and J. Cushman (2003). Implications of using corn stalks as a biofuels source:
A joint ARS and DOE project. Eos. Trans. Agu, vol 84, no 46, ars.usda.gov/research/publications/publications.htm?SEQ_NO_115=166979
• Worldwatch Institute (2007). Biofuels for Transport; global potential for sustainable energy and agriculture. Earthscan .
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Annex II: Terms of Reference
Introduction: In recent years there has been some unprecedented demand for alternative sources of energy in order to reduce the ever growing demand and price of fossil fuels. Globally, agro fuels have now become very important and are apparently attracting significant business investments. Countries such as Brazil, Malaysia and several European countries are leading the race to develop and use bio fuels technologies. Multinational companies are intensifying their efforts in developing countries, looking for opportunities to invest in this energy sub-sector. Substantial investments in this regard are taking place in Nigeria using both cassava and sugar cane, in Cote d’Ivoire for production of ethanol from sugar cane, maize and sweet sorghum, and later to manufacture bio-diesel from cotton-seeds and cashew nut residues. In East Africa, initiatives for production of bio-fuels are taking place in Kenya, Uganda and Tanzania. In Tanzania alone, over 14 companies have started or are in various stages of establishing bio-fuel production systems, and more are likely to come. While many individuals and companies are busy looking for opportunities to invest in bio-fuels, some serious environmental, social, economic and ethical concerns (e.g. effect on food production, displacement of local communities, land appropriation) are being raised globally and nationally. About this Consultancy: Just like other organizations, World Wide Fund for Nature (WWF)-Tanzania Programme Office is one of the important stakeholders of bio-fuels. Bio-fuel initiatives have in many ways direct impact on what WWF is doing on the ground. It is for this very reason that Energy for Sustainable Development (ESD) is selected and engaged as competent consultant to conduct a situational analysis on the status of bio-fuel business in Tanzania, Africa and globally in general highlighting the main issues regarding the development of bio-energy and the issues relevant to WWF, development initiatives and challenges and opportunities associated with bio-energy development in these countries and Tanzania in particular The purpose of this study is to analyze the impact of this industry and its existing and potential strengths, weakness, opportunities and threats to environment, bio-diversity conservation and socio-economic aspects in Tanzania as a whole. The expected output from this study is a detailed situation analysis report on biofuels industry in Tanzania, East Africa and globally SWOT analysis. Recommendations on feasibility of these investments in Tanzania in-terms of pros and cons would have to include recommendations on policy guidelines and best practices on the same that would enable relevant decision makers to make informed decisions regarding bio-fuel investments in this country. Main Task: Carry out a Situation Analysis biofuels industry in Tanzania and elsewhere around the world drawing important lessons and experiences through a SWOT analysis approach. This task will include carrying out in-depth and necessary desk reviews, formal interviews, field observations and consultations to obtain relevant information to be compiled in the Situation Analysis Report on Biofuels. Specific Tasks:
1. Carry out a Scoping Exercise: Literature review (Wider perspective) plus information collected from a few selected field visits to inform WWF and other interested institutions about bio-fuel situation in the country and associated socio-economic and conservation concerns.
2. Facilitate a Stakeholder Planning Workshop: This will be a national w/shop that will
involve all important stakeholders on bio-fuel to discuss and draft guidelines for bio-fuel development in Tanzania.
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3. Based on study and workshop findings, ESD to organize and conduct Training Session:
The purpose of this training is to build capacity of key pro-environmental and developmental NGOs, Government decision makers and Private companies on bio-fuel in Tanzania.
Outputs:
1. Report on situation analysis of biofuels industry 2. Planning workshop proceedings 3. Report on recommended guidelines and criteria for Biofuels development in Tanzania 4. Training Report
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Annex III: Questionnaire for Structured Interview
OVERVIEW OF POTENTIAL, OPPORTUNITIES & CHALLENGES 1. DO YOU THINK BIOFUELS ARE GOOD OR BAD FOR TANZANIA’S ECONOMY? 2. WHICH IS THE MOST IMPORTANT LIQUID BIOFUELS TO THE ECONOMY? WHY? 3. WHAT ARE THE MAIN FACTORS THAT MAKE TANZANIA SUITABLE FOR BIOFUELS PRODUCTION? 4. WHAT ARE THE MAIN CHALLENGES IN ESTABLISHING A BIOFUELS INDUSTRY? 5. DO YOU THINK BIOFUELS ARE A THREAT TO TANZANIA’S ENVIRONMENT? EXPLAIN AND
SPECIFY? 6. DO YOU HAVE ANY CONCERNS ABOUT INCREASING BIOFUELS PRODUCTION IN TANZANIA? IF
YES, THEN WHAT ARE THEY?
LAND ACQUISITION
1. WHAT ARE THE PROCESSES/PROCEDURES TO ACQUIRE LAND FOR BIOFUELS AND OTHER
SECTOR INVESTMENTS? 2. HOW DOES COMMUNITY PARTICIPATE? 3. HOW IS COMPOSITION [COMPENSATION?] BEING DONE? WHO DECIDES?
GOVERNMENT POSITION ON BIOFUELS 1. DO YOU THINK THE GOVERNMENT SHOULD ENCOURAGE BIOFUELS IN TANZANIA? IF YES, THEN
HOW SHOULD THEY DO THIS? 2. WHAT ARE THE BEST WAYS TO ENCOURAGE FARMERS AND OTHERS TO PARTICIPATE IN
GROWING BIOFUELS FEEDSTOCKS? 3. WHAT IS THE BEST MODEL FOR FARMING BIOFUELS? 4. WHAT CROPS SHOULD THE GOVERNMENT BE PROMOTING FOR BIOETHANOL AND WHY? 5. WHICH TYPES OF ORGANIZATIONS AND INSTITUTIONS SHOULD BE INVOLVED IN BIOFUELS
PRODUCTION IN TANZANIA AND WHY? 6. WHICH GOVERNMENT MINISTRY SHOULD LEAD BIOFUELS EFFORTS IN TANZANIA? 7. SHOULD THE LEAD AGENCY BE A GOVERNMENT DEPARTMENT WITHIN A MINISTRY OR A STAND-
ALONE AGENCY? 8. ARE THERE ANY TECHNOLOGICAL, AGRICULTURAL OR OTHER RESEARCH PROJECTS THAT YOU
THINK WOULD HELP BIOFUELS DEVELOPMENT IN TANZANIA? IF YES, WHAT ARE THEY?
BIOFUELS POLICY INITIATIVES/NATIONAL BIOFUELS TASK FORCE 1. WHEN WAS BTF FORMED AND HOW? 2. HOW IS COMPOSED? LIST OF MEMBER ACCORDING TO THEIR INSTITUTIONS/ORGANIZATIONS 3. WHAT ARE TORS FOR THE BTF? ENDLINE? 4. WHAT ARE ACHIEVEMENTS OF THE BTF SO FAR? 5. DO YOU THINK BTF HAVE ENOUGH INFORMATION ON BIOFUELS SECTOR TO ACCOMPLISH
ASSIGNED TASKS? EXPLAIN AND SPECIFY? 6. WHAT DO YOU THINK THE PRINCIPLES TO GUIDE BIOFUELS INVESTMENT IN TANZANIA SHOULD
BE?
EXISTING BIOFUELS PROJECTS 1. WHEN WAS THE PROJECT STARTED IN TANZANIA? 2. WHICH BIOFUELS DOES THE PROJECT AIM TO PRODUCE? IS IT FOR EXPORT OR LOCAL
CONSUMPTION? 3. HOW MUCH LAND DID THE PROJECT ACQUIRE? FROM WHERE? AND WHAT IS THE TARGET
AMOUNT OF LAND TO BE ACQUIRED [?]? 4. WHAT WAS THE USE OF THAT LAND BEFORE? 5. DID THE PROJECT CONDUCT EIA? IF YES, WHEN AND BY WHOM? 6. DID THE PROJECT DISPLACE COMMUNITIES? IF YES, WAS COMPENSATION MADE? HOW? 7. WHAT IS THE CURRENT STATUS OF THE PROJECT?
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Annex IV: List of Persons Interviewed
No. Name Title Institution
1 Mr. Ngosi Mwihava Assistant Commissioner for Renewable Energy
Ministry of Energy and Minerals
2 Mr. Paul Kiwele Principal Forest Officer and Member of National Biofuels Task Force
Ministry of Energy and Minerals
3 Mr. Godfrey Sanga Renewable Energy Expert Tanzania Traditional Energy and Environment Development Organization (TaTEDO)
4 Mr. Thomas Mkunda Project Officer Tanzania Traditional Energy and Environment Development Organization (TaTEDO)
5 Dr. Hamimu Hongo Director Forming for Energy and better Livelihoods in Southern Africa (FELISA)
6 Mr. Abdallah Nkindi Programme Officer Envirocare
7 Ms. Loyce Lema Executive Director Envirocare
8 Abdul Omary (Babu Poa)
Marketing Manager Moto Poa Company Ltd
9 Mr. Mohamed Ngude Research Officer and Member of National Biofuels Task Force
Tanzania Petroleum Development Cooperation (TPDC)
10 Mrs. Esther Mfugale Agricultural Officer Ministry of Food Security and Cooperatives
11 Mr. Alinanuswe Leonald District Beekeeping Officer Kisarawe
12 Kirsten Roettcher
Land Use Planning/Biodiversity Conservation Specialist
SEKAB Bioenergy (T) Ltd
13 Mr. James Michael Chemical and Processing Engineer
Diligent (T) Ltd
14 Mr. Arfaksad Ndilanha National Coordinator Programme for Biomass Energy Conservation in Southern Africa
15 Mr. Athumani Mkambala Village Chairperson Mhaga village
16 Mr. Ally Lugome Village member Mhaga village
17 Mr. Hamis Dua Village member Mhaga village
18 Mr. Mustapha Mfangavo District Forest Officer Kilwa district
19 Mr. Hatibu Ramadhani Acting Ditsrict Agricultural Officer
Kilwa district
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No. Name Title Institution
20 Mr. Daniel Lusingu District Planning Officer Kilwa district
21 Mr. Senso Magesa District Land Officer Kilwa district
22 Mr. Mtemi Husein Miya Director of Operation Bioshape Tanzania Ltd
23 Mr. Wilfred Onyoni Director General Bioshape Tanzania Ltd
24 Ms. Lilian Mkony Executive Director Jatropha Products Tanzania Ltd
25 Mr. Albert Mshanga Operation Manager Jatropha Products Tanzania Ltd
26 Mr. Charles Meshack Executive Director Tanzania Forest Conservation Group (TFCG)
27 Ms. Nike Dogatt Advisor Tanzania Forest Conservation Group (TFCG)
28 Mr. Aflaeli Nasari Village Executive Officer Leguruki village, Arusha
29 Mr. Luca Mbise Member of village energy team and user of multifunctional platform
Leguruki village, Arusha
30 Mr. Godluck Kaaya Multifunctional Platform Operator
Leguruki village, Arusha
31 Mrs. Wariombora Kaaya Member of village government Leguruki village, Arusha
32 Miss Kristen Kurczak BP
33 Mr Rommert Schramm Agriculture Officer FAO
34 Mr Wilbert Hermans CEO? Bioshape Holdings, Holland
35 Mr. Razi Latiff Programme Officer European Union, Tanzania
36 Mr. Silas Olang Coordinator – Livelihood Initiative for Tanzania
Oxfam UK
37 Mr Andrew Perkin Biologist Oxford Brookes University, UK
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No. Name Title Institution
38 Mr Nick Hepworth Water consultant University of East Anglia, UK
39 Mr Peter Roberntz Forest and Bio-energy Officer WWF Sweden
40 Mr. Bart Jan van Beuzekom
Programme Officer – Sustainable Energy and High Value Chains
Horn of Africa Regional Environment Centre and Network, Ethiopia
41 Mr. Livinus Manaynaga Managing Director KAKUTE
42 Ms. Lea Hansen Natural Resources Technical Advisor
CARE International in Tanzania
43 Mr. Negusu Aklilu Director Forum for Environment, Ethiopia
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Principles for Sustainable Biofuels 1. Legality Biofuel production shall respect all applicable laws of the country in which they occur, and all international treaties and agreements to which the country is a signatory. 2. Consultation Biofuel projects shall arise through fully transparent, consultative and participatory processes that involve all relevant stakeholders. 3. Climate Change and Greenhouse Gases Biofuels shall contribute to climate stabilization by reducing GHG emissions as compared to fossil fuels. Emissions shall be estimated via a consistent approach to lifecycle assessment, with system boundaries from “root to tank”. This shall include direct and indirect GHG emissions, for instance from fossil energy used in growing, transporting and processing biofuels. It shall also include GHG emissions resulting from land use changes as land is converted to biofuel crop production, or as other production is displaced. 4. Human and labor rights Biofuel production shall not violate human rights or labor rights, and shall ensure decent work and the well-being of workers. 5. Socio-economic development Biofuel production shall not violate land or water rights, and shall contribute to the social and economic development of local, rural and indigenous peoples and communities. 6. Food security Biofuel production shall not impair food security. 7. Conservation Biofuel production shall not directly or indirectly endanger wildlife species or areas of high conservation value. 8. Soil Biofuel production shall not directly or indirectly degrade or damage soils. 9. Water Biofuel production shall not directly or indirectly contaminate or deplete water resources. 10. Air Biofuel production shall not directly or indirectly lead to air pollution. 11. Biotechnology If biotechnologies are used in biofuels production, they shall improve the social and/or environmental performance of biofuels, and always be consistent with national and international biosafety and transparency protocols.
Annex V: Systems for Promoting Sustainable Development
The following international systems and organisations have developed to guide agriculture, forestry and the biofuels sector. They incorporate different environmental and social concerns and could be used as a road map for how policy relating to biofuels could be developed within Tanzania. The Roundtable for Sustainable Biofuels Principles The Roundtable on Sustainable Biofuels is an international initiative bringing together farmers, companies, non-governmental organisations, experts, governments, and inter-governmental agencies concerned with ensuring the sustainability of biofuels production and processing. It is a project of the Energy Center at Le Collège du Management de la Technologie, Ecole Polytechniques Fédérale de Lausanne. The Roundtable is hosting a series of meetings, teleconferences, and online discussions with the aim of achieving global, multistakeholder consensus around the principles and criteria of sustainable biofuels production.16 In 2007 the steering board for the Roundtable developed a list of “principles and criteria” for sustainable biofuel production17. This was submitted to a diverse group of worldwide stakeholders and modified based on their comments. (WWF International has participated in this process through the Johannesburg Working Group.) The principles define the ideal conditions under which the biofuel industry could operate. According to the roundtable's own view of these principles, they “are highly aspirational, and represent an ideal performance of biofuels. Obviously, very few biofuel supply chains currently fulfil these principles. The purpose of these principles is to indicate the ideal scenario towards which stakeholders should be progressing.”18 As aspirational goals, these principles offer a high standard against which a national policy for biofuels and individual projects can be measured. As the Government of Tanzania engages more fully in biofuels policy development, it may wish to engage in the process for commenting on and further refining the principles. The principles are undergoing a second round of stakeholder comment; a new version will be available soon. A summary of the existing draft principles are set forth in the box.
16 See http://cgse.epfl.ch/page65660.html
17 Roundtable on Sustainable Biofuels, second version of global principles for sustainable biofuels production
October 23, 2007
18 http://cgse.epfl.ch/page70341.html
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The Roundtable on Sustainable Palm Oil (RSPO) Principles
RSPO is a WWF led initiative started in 2001 and originally consisted of Aarhus United UK Ltd (a European vegetable oil producer), Golden Hope Plantations Berhad, Migros, Malaysian Palm Oil Association, Sainsbury's and Unilever as the main stakeholders together with WWF. This initiative was started as a result of the negative environmental and social impact that palm oil plantations have had in countries such as Malaysia and Indonesia. The inaugural meeting of the Roundtable took place in Kuala Lumpur, Malaysia on 21 - 22 August 2003 and was attended by 200 participants from 16 countries. The key output from this meeting was the adoption of the Statement of Intent (SOI) which is a non-legally binding expression of support for the Roundtable process. As of 31 August 2004, forty seven organisations have signed the SOI. The principal objective of RSPO is “to promote the growth and use of sustainable palm oil through co-operation within the supply chain and open dialogue between its stakeholders”19. In October 2007, the RSPO issued a report entitled “Principles and Criteria for Sustainable Palm Oil Production” which also includes indictors and guidance on implementing the principles.20 The “criteria and guidance were applied for an initial pilot implementation period, and were reviewed at the end of the period. The objective of the pilot implementation period was to enable field testing of the principles and criteria, and thereby allow guidance to be improved.” establish a working group to consider all issues relating to Greenhouse Gas emissions, in terms of their relevance to the oil palm sector. This may include the development of amendments to the RSPO Principles, Criteria, Indicators and Guidance, which should then be reviewed within one year after adoption. The original “Principles and Criteria” are summarised below.
19 RSPO Press Statement 2004
20 Available at: http://www.rspo.org/download_list.aspx?catid=4&ddlID=16
RSPO Principles Principle 1: Commitment to transparency Principle 2: Compliance with applicable laws and regulations
Principle 3: Commitment to long term economic and financial viability Principle 4: Use of appropriate best practices by growers and millers Principle 5: Environmental responsibility and conservation of natural resources and biodiversity Principle 6: Responsible consideration of employees and of individuals and communities affected by growers and mills Principle 7: Responsible development of new plantings Principle 8: Commitment to continuous improvement in key areas of activity
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Rainforest Alliance Sustainable Agricultural Standard The Rainforest Alliance is an international conservation organisation based in the United States and dedicated to conserving biodiversity and ensuring sustainable livelihoods by transforming land-use practices, business practices and consumer behaviour related to tropical forests. It sets standards for sustainability and provides its certification seal to farms and forestry enterprises that meet its comprehensive standards. The Sustainable Agriculture Network (SAN) is a a coalition of leading conservation groups that links responsible farmers with conscientious consumers by means of the Rainforest Alliance's certification seal. In February 2008, SAN issued a “Sustainable Agricultural Standard”, which is in fact a set of criteria and standards.21 The standards address most important environmental, social, legal, labour and agricultural issues as well as community relations and health and safety in the workforce. In order to reduce the amount of documentation needed by farmers, auditors concentrate more in physical indicators that can be used to assess the state of farm management. SAN have adopted a scoring system that encourages the continuous improvement of farm management. To achieve certification the farmers must comply with 50% of all principles and criteria and 80% of all criteria overall. Although not specifically designed for biofuel projects, these comprehensive standards could be used as guidance for developing sustainable practices for the agricultural and social justice aspects of biofuel production. The key criteria of the Standard are described below:
21 Available at: http://www.rainforest-alliance.org/agriculture.cfm?id=standards
Rainforest Alliance Sustainable Agricultural Standard Feb 2008 SOCIAL AND ENVIRONMENTAL MANAGEMENT SYSTEM Critical Criterion. The farm must have a system for avoiding the mixing of certified products with non-certified products in its facilities and during harvesting, packaging and transportation. All transactions involving certified products must be recorded. Products leaving the farm must be duly identified and accompanied with the relevant documentation indicating a certified farm as origin. ECOSYSTEM CONSERVATION Critical Criterion. All existing natural ecosystems, both aquatic and terrestrial, must be identified, protected, conserved and restored through a conservation program. The program must include the restoration of natural ecosystems or the reforestation of areas within the farm that are unsuitable for agriculture. The program must include the establishment and maintenance of shade trees for those crops traditionally grown with shade, in areas where the agricultural, climatic and ecological conditions permit. The farm must maintain the integrity of aquatic or terrestrial ecosystems inside and outside of the farm, and must not permit their destruction or alteration as a result of management or production activities on the farm. The wood used for pallets or for posts to support greenhouses, cableways or similar infrastructure must come from legally approved sustainable sources, from the moment of the first contact made for the certification process.
WILDLIFE PROTECTION Critical Criterion. Hunting, capturing, extracting and trafficking wild animals must be prohibited on the farm. Cultural or ethnic groups can hunt or collect fauna in a controlled manner and in areas designated for those purposes under the following conditions: a. The activities do not involve species in danger of or threatened with extinction. b. There are established laws that recognize the rights of these groups to hunt or collect wildlife. c. Hunting and collection activities do not have negative impacts on the ecological processes or functions
important for agricultural and local ecosystem sustainability. d. The long-term viability of the species’ populations is not affected. e. These activities are not for commercial purposes. WATER CONSERVATION The farm must not discharge or deposit industrial or domestic wastewater into natural water bodies without demonstrating that the discharged water compiles with the respective legal requirements, and that the wastewater’s physical and biochemical characteristics do not degrade the receiving water body. If legal requirements do not exist, the discharged wastewater must comply with the following minimum parameters:
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Water Quality Parameter Value
Biochemical Oxygen Demand (DBO5, 20) Less than 50 mg/L Total suspended solids Less than 50 mg/L Grease and oils Less than 30 mg/L Fecal coliforms Absent PH Between 6.0 – 9.0
The mixing of wastewater with uncontaminated water for discharge into the environment is prohibited. The farm must not deposit into natural water bodies any organic or inorganic solids, such as domestic or industrial waste, rejected products, construction debris or rubble, soil and stones from excavations, rubbish from cleaning land, or other similar materials. FAIR TREATMENT AND GOOD WORKING CONDITIONS FOR WORKERS Critical Criterion. The farm must not discriminate in its labor and hiring policies and procedures along the lines of race, color, gender, age, religion, social class, political tendencies, nationality, syndicate membership, sexual orientation, marital status or any other motive as indicated by applicable laws, ILO Conventions 100 and 111, and this standard. The farm must offer equal pay, training and promotion opportunities and benefits to all workers for the same type of work. The farm must not influence the political, religious, social or cultural convictions of workers. Workers must receive pay in legal tender greater than or equal to the regional average or the legally established minimum wage, whichever is greater, according to their specific job. In cases where the salary is negotiated through collective bargaining or other pact, the worker must have access to a copy of this document during the hiring process. For production, quota or piecework, the established pay rate must allow workers to earn a minimum wage based on an eight-hour workday under average working conditions, or in cases where these conditions cannot be met.
It is prohibited to directly or indirectly employ full- or part-time workers under the age of 15. In countries where the ILO Conventions have been ratified, the farm must adhere to that established in Convention 138, Recommendation 146 (minimum age). Farms contracting minors between the ages of 15 and 17 must keep a record of the following information for each minor: a. First and last name. b. Date of birth (day, month and year). c. First and last name of parents or legal guardian. d. Place of origin and permanent residence. e. Type of work carried out on the farm. f. Number of hours assigned and worked. g. Salary received. h. Written authorization for employment signed by parents or legal guardian. Workers between 15 and 17 years old must not work more than eight hours per day or more than 48 hours per week. Their work schedule must not interfere with educational opportunities. These workers must not be assigned activities that could put their health at risk, such as the handling and application of agrochemicals or activities that require strong physical exertion. Any type of forced labor is prohibited, including working under the regimen of involuntary imprisonment, in agreement with ILO Conventions 29 and 105 and national laws. The farm does not withhold any part or all of workers’ salaries, benefits or any rights acquired or stipulated by law, or any of the workers’ documents, in order to force them to work or stay on the farm, or as a disciplinary action. The farm does not use extortion, debt, threats or sexual abuse or harassment, or any other physical or psychological measure to force workers to work or stay on the farm, or as a disciplinary measure. OCCUPATIONAL HEALTH AND SAFETY Critical Criterion. All workers that come into contact with agrochemicals, including those who clean or wash clothes or equipment that has been exposed to agrochemicals, must use personal protection equipment. The farm must provide this equipment in good condition, and must provide incentives to workers to use the equipment. The equipment must reduce contact with the agrochemicals and the possibility of acute or chronic poisoning, and must comply with the strictest of the following requirements: a) the requirements indicated on the products’ Material Safety Data Sheet, b) any applicable laws; or c) the equipment indicated in Annex 2 of this standard. COMMUNITY RELATIONS
The farm must respect areas and activities that are important to the community socially, culturally, biologically, environmentally and religiously; these must not be affected by farm activities. The farm must implement and carry out policies and procedures for identifying, consulting and considering the interests of local populations and community interest groups regarding farm activities or changes that could have a negative impact on their quality of life or on local natural resources.
The farm must have policies and procedures for prioritizing the hiring and training of a local labor force and for contracting and acquiring local services and products.
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INTEGRATED CROP MANAGEMENT Critical Criterion. The following chemical or biological substances cannot be used on certified farms: a. Biological or organic substances that are not legally registered in the country for use on that particular crop. b. Agrochemicals that are not registered officially in the country for the specific crop. c. Agrochemicals that are prohibited by the United States Environmental Protection Agency (EPA) or by the
European Union. d. Substances that have been identified in the Stockholm Convention on Persistent Organic Pollutants (POPs). e. Agrochemicals included in Annex III of the Rotterdam agreement that are prohibited or severely restricted by the
United Nation Environmental Program’s Prior Informed Consent (PIC) program. f. All Pesticide Action Network Dirty Dozen products. The farm must take steps to avoid introducing, cultivating or processing transgenic crops. When nearby transgenic materials are accidentally introduced into a certified farm’s crop, the farm must develop and execute a plan to isolate the crops and provide follow-up in order to comply with the requirements of this criterion. SOIL MANAGEMENT AND CONSERVATION Critical Criterion. New production areas must only be located on land with the climatic, soil and topographic conditions suitable for intensity level of the agricultural production planned. The establishment of new production areas must be based on land use capacity studies that demonstrate long-term production capacity. The cutting of natural forest cover or burning to prepare new production areas is not permitted. INTEGRATED WASTE MANAGEMENT The farm must have an integrated waste management program for the waste products it generates. This must be based on the concepts of refusing or reducing the use of products that have actual or potential negative impacts on the environment or human health waste as well as reusing and recycling waste. As part of this program, the sources and types of waste must be identified and the quantity (weight or volume) must be estimated. The activities of the integrated waste management program must be in accordance with the types and quantities of waste generated.
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Mondi Wetlands Project Farms Management System for Sugar Cane Growers (South Africa)
The Sustainable Sugarcane Farm Management System (SuFarMS) was developed in South Africa and pioneered by Noodsberg cane growers to mitigate undesirable environmental and social impacts of sugar cane farming. This has been developed in then absence of an existing local system but was in line with South African strategic plan for agriculture. SusFarMS define an environmental management system as “A comprehensive system of practices needed to achieve rigorous compliance with environmental legislation and better practice, anticipate environment related problems and measure consistency of environmental performance”. In 2004 the WWF Global Freshwater Programme joined forces with Noodberg cane growers in order to develop a sustainable sugar initiative. The system is based on principles that are underpinned by criteria and indicators, the performance of which are judged by verifiers. SusFarMS may form a type of eco-labelling in the near future. Principle 1 Economic Economically sugar cane production is maintained or enhanced Principle 2 Social The rights of employees and the local community are upheld and promoted Principle 3 Environmental Natural assets are conserved, critical ecosystem services are maintained and agricultural resources are sustainably used.
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Principle Criteria Indicator(s) Verifiers
Land use planning A written land-use plan that promotes sustainable sugar cane production exists Implementation of the land
use plan Profitability/ viability of a farming operation is planned on an annual basis
Annual financial Plan
Economic The agronomic and mechanisation practices of the sugar cane farm are integrated with the climate, soils, water, and topography to maintain a optimum and sustained economic crop
Production potential of the land is maintained or enhanced
Recording and monitoring of inputs Occupational Health and Safety Act Safe Working Environment Precautionary measures for potential hazards Health and Safety representatives
Farmers comply with the Occupational Health and Safety Act 85 of 1993
Training for health and safety
A working environment that is safe and without risk to the health of the employees is provided and maintained
Farmers who provide employee villages ensure that the villages are safe and without risk to the health of the employee
Village management
Written contract requirements Farmers comply with the basic conditions of the Employment Act 75 of 1997, and in terms of section 51 (1), the Sectoral Determination establishing conditions of employment and wages for employers and employees in the Farm Work sector
Sectoral determination of farm workers
Farmers contribute to employee unemployment benefits by complying with collection of contributions for the Unemployment Insurance Fund as prescribed by the unemployment Insurance Contribution Act 4 of 2002
Employer and employee responsibilities
The right to fair labour practices is upheld
Farmers provide for disablement, diseases or death from occupational activities as prescribed by the Compensation for Occupational Injuries and Diseases Act 130 of 1993
Employer and employee requirements
Farmers comply with the Land Reform (Labour Tenants) Act 3 of 1996
Rights of labour tenants The rights and security of tenure of labour tenants and farm occupiers is upheld Farmers comply with the Extension of Tenure
Security Act 62 of 1997 Rights of farm occupiers
Preferential employment opportunities
Farmers contribute towards the economy of the local community
Farmers can demonstrate participation in actions to strengthen the local economy
Consultations with local communities
Farmers contribute towards a skills development levy
Farmers comply with the Skills Development Levies Act 9 of 1999
Employer requirements
Recreational facilities for the public are applied where appropriate
Public use of land for recreational use is available on the farm on a voluntary basis
Facilities for public use
Social
Cultural assets are protected All heritage area, objects and sites recognised in terms of the National Heritage Resources Act of 1999, and the KwaZulu Natal Heritage Act 10 of 1997 are protected
Managing cultural resources
Protected trees Nationally protected species Regionally protected species
Threatened and protected species are protected
Natural Heritage sites/ sites of conservation significance
Alien and invasive plants posing potential threats to biodiversity are controlled
Control of alien invasive plants Protection of ecosystems
Biodiversity assets and threatened eco systems are conserved
Threatened ecosystems are protected Better management practices for natural ecosystems
Critical ecosystem services are processes are identified and plans for their maintenance included in the Land Use Plan
Maintenance of ecosystem services and processes
Minimising air pollution Prevention of soil and water pollution Waste management Disposal of hazardous waste
Critical ecosystem services and processes are maintained and protected
Significant pollution and degradation of the environment is prevented, contained, minimised or remedied
Authorisation of scheduled and listed activities Regulations under the Conservation of Agricultural Resources Act Mapping of soils
Conservation terraces
Environmental
Natural agricultural resources are sustainably used (soil, water resources and vegetation excluding weeds and invasive plants)
Soil erosion is minimised
Waterways
