Biofuel is a goldmine for Nigeria to harness in the quest for energy transition but the government must get its act right while industry players should live up to the billing
Nigeria, often referred to as the “Giant of Africa”, is grappling with the dual challenge of energy sustainability and environmental responsibility. With a population of over 200 million people and an economy heavily reliant on fossil fuels, the nation faces increasing energy insecurity and environmental concerns. In response to these challenges, Nigeria is exploring the potential of biofuels as a key ingredient in its energy mix. This article explores Nigeria’s current situation concerning biofuels, their potential, and their role in shaping the nation’s energy sustainability.
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Nigeria’s energy landscape and biofuels
Nigeria’s energy landscape has long been dominated by fossil fuels, particularly crude oil. This reliance on oil and gas has historically buoyed the nation’s economy, accounting for a substantial portion of its forex earnings and revenues. However, it has also left Nigeria exposed to the volatile fluctuations of global oil prices, impacting economic stability. Moreover, the environmental consequences of fossil fuel extraction, including pollution and contributions to climate change, cannot be ignored.
The country has started to look to biofuels for succor. However, what exactly are Biofuels? Biofuels are derived from organic materials such as crops, agricultural residues, and algae. They have emerged as a promising alternative to fossil fuels. Nigeria possesses diverse resources that could be harnessed for biofuel production, including oil palm, sugarcane, and cassava. Two primary types of biofuels are actively explored in the country – biodiesel and bioethanol.
Biodiesel is made from natural oils, and there are many types of oil that can be used. Biodiesel is usually made from soya oil but can also be made from animal fats and even from restaurant waste fat. Recycling restaurant waste is obviously very green, as it involves reusing something that would otherwise be thrown away to replace fossil fuels. However, research is also being done into making oil for biodiesel from algae, which would mean that biodiesel could be made without having to use additional farmland or reuse land used to grow food.
On the other hand, Bioethanol is made by fermenting plants such as cereals, some grasses, wood, or sugar cane and distilling the resulting alcohol. Bioethanol can be considered as a substitute for gasoline, and most cars can run with a bioethanol gasoline blend of up to 10% bioethanol, with flexible fuel cars able to tolerate up to 85% ethanol, and some cars specially designed to run on 100% bioethanol. Biodiesel is a substitute for diesel; all diesel engines can run on it without modification.
Recognizing the potential of biofuels for energy sustainability, the Nigerian government took concrete steps in 2007 to promote their production and utilization. One such milestone was the Nigerian Biofuels Policy and Incentives of 2007, which laid out the regulatory framework for biofuel development and provided tax breaks for investors. It aimed to “achieve 100% domestic production of biofuels consumed in the country by 2020”. Various other policies and incentives were also introduced along the line to encourage private investment in the biofuel sector.
Despite the government’s initiatives, Nigeria faced a series of challenges on its path towards widespread biofuel adoption. One of the primary obstacles is the lack of essential infrastructure for biofuel production, storage, and distribution. Additionally, concerns regarding land use conflicts, food security, and the social impact of large-scale biofuel projects have contributed to a cautious approach, as there is a huge gap between policy demand and actualization.
In 2012, a private firm signed a £2Billion deal with the Nigerian Government for a biofuel production complex at llemeso, Ekiti state, Nigeria.
Similarly, Kogi State Government under the leadership of Yahaya Bello signed an MoU with the Nigerian National Petroleum Corporation (NNPC) for the establishment of biofuel projects in the state. Foreign investments and private sector investments have also been made since the policy was published in 2007.
The NNPC also signed MoUs with State Governments for the building of fuel ethanol plants and cultivation of biofuel feedstock, some of which include Kogi, Kebbi, Gombe, Benue, Anambra, Cross Rivers, and Ondo. Despite these initiatives, the NNPC has still not kicked off large-scale commercial production of biofuels as directed by the policy.
However, these challenges are not without their corresponding opportunities. The prospects for biofuels in Nigeria appear promising. As the nation seeks ways to diversify its energy sources and reduce its vulnerability to global oil market fluctuations, biofuels remain a viable alternative. To ensure the success of this endeavor, Nigeria must address the existing challenges. Key actions include investing in crucial infrastructure, establishing clear sustainability criteria for biofuel projects, and fostering collaborative partnerships between government, industry, and local communities.
Very recently, the House of Representatives passed for Second reading “A Bill for an Act to Provide a Policy Framework for the Development of Biofuels Energy Industry in Nigeria”. This is a welcome development and a step in the right direction indicating vital parliamentary support for renewable energy in Nigeria. The bill aims to establish the Biofuels Energy Regulatory Commission and the Bio-Fuels Research Agency, marking a crucial step in Nigeria’s efforts to combat climate change and diversify its domestic economy. The bill also aims to encourage investment in the energy sector and offer incentives such as exemptions on Withholding Tax, waivers on Value Added Tax (VAT), and waivers on Import and Customs Duties.
If this bill is passed and implemented appropriately, Nigeria is bound to experience economic development and the empowerment of rural communities. It will also lead to improved farming techniques, increased agricultural research, and higher crop demand. The biofuels may even be used for co-generation of electric power as well as reduce tailpipe emissions, ozone pollution, particulate emissions, and replace toxic octane enhancers in gasoline.
Nigeria is among the top producers of important energy crops in the world and generates a significant amount of organic waste which can be used to achieve a twin benefit of fuel and environmental cleanliness. The biofuel business sector will help curb the high rate of unemployment in the country by engaging the youths, local farmers, and entrepreneurs.
Government and other stakeholders should ensure and encourage the continuity and full realization of the emerging biofuel projects in the country to meet the demand of the nation. There is a need to scale up from the research level and pilot plant to the industrial commercialization of biobutanol, biodiesel, and biogas in Nigeria. The policies and plans in the National biofuel policy incentive and other relevant authorities, if implemented, will accelerate the development in the biofuel sector, solve many environmental problems faced by the nation, and position Nigeria as a regional leader in biofuel production, simultaneously contributing to a greener and more secure energy future.