Ethiopia prepares to produce, consume and export bio-fuel

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A new bio-fuel share company, expected to raise a capital of 250 million birr from interested parties, is set to start cultivating and extracting oil from jatropha and castor plants in Ethiopia within the next 18 months.

The rising levels of international oil prices have led the Ethiopian government to consider shifting to the consumption of bio-fuel. On average, Ethiopia spends over 10 billion birr annually on petroleum imports, that is, about 90 percent of the country’s earnings from foreign trade each year. Aiming to shift from the ruinously expensive fossil fuel to cost-effective bio-fuel, the Ethiopian Council of Ministers approved a bio-fuel development strategy in Ethiopia. The 16-page strategic document was prepared by the Ministry of Mines and Energy (MoME) in collaboration with experts at the Ministry of Trade and Industry (MoTI) and the Ministry of Agriculture and Rural Development (MoARD).

According to data from the Ethiopian Investment Agency, over 60 companies received licenses to participate in the bio-fuel business. However, not more than ten companies are actively involved.

Jatropha is a bio-fuel crop with potential for Ethiopia. It can grow in arid areas under dry climatic conditions with an estimated rainfall below 2,000mm per year. The yield is typically 1,000kg per hectare. However, where rainfall ranges between 900 and 1,200mm, jatropha can yield up to 5,000kg per hectare. The price of Jatropha and castor seeds in Ethiopia range between 0.45 to 0.75 dollars per litre. However, in Germany, a litre costs as much as 1.3 dollars.

Robel Debebe, Managing Director of Eco Energy, has confirmed that his company plans to cultivate 25,000 hectares of non-arable land for bio-fuel production. According to the director, his company has finalized deals with an Indian company, Jatropha World, for a consultancy and partnership agreement. Mr. Debebe and his five partners, among who include experts in renewable energy, are set to collect 250 million birr by selling public shares in order to set up the plantation. Eco Energy has also targeted Europe and specifically Germany as an export destination for its products. Robel further says that his company is going to complete an Environmental Impact Assessment to identify how to deal sensitively with the environment during the implementation period.

According to the managing Director, the project will have three phases. The first deals with setting up the plantation, while the second phase involves the production of non-refined products. The third and final phase of the project is concerned with processing the refined output of the oil. The final phase is expected seven years after the implementation of the first phase.

Bio-fuel is obtained from relatively recently lifeless or living biological material and is mostly comprised of vegetable oil – from jatropha, castor seed, or palm – mixed with methanol or ethanol, both highly combustible alcohols, as well as potassium hydroxide. This type of fuel can be burned in any diesel engine with much lower emissions compared to fossil fuels. Similarly, bio-diesel can also be made from animal fats. Ethanol can be obtained from sugarcane, corn or sweet potatoes, making all bio-fuel ingredients renewable, unlike fossil fuels.

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