Kenya looks at ways to benefit from jatropha

Kenyan electricity generator KenGen has expressed interest in buying jatropha-based biodiesel from the local market. Spokesman James Wahogo said the company is keen to use the biodiesel to power its thermal power projects in place of the more expensive fossil-derived conventional diesel.

"It presents a major opportunity to save on foreign exchange," said Wahogo. KenGen uses at least Sh8 billion ($1.2 billion) every year to power its thermal electricity generators alone.

KenGen also sees jatropha as a major opportunity to help in reforestation and therefore reduce the rate of sedimentation in its hydro-power dams. The company says it is interested in further research and development of biodiesel and is keen to engage in projects that are environmentally friendly and will enhance cost competitiveness. KenGen's concern, like that of other interested industrial users including the Kenya Tea Development Authority (KTDA), is the assurance of sustained delivery of biodiesel.

"To keep processing plants running efficiently there is need to have sufficient and reliable quantities," said Wahogo.

Producers are also looking at export opportunities for biodiesel based on projections of usage around the world. For instance, the European Union plans to blend fossil fuels with 10 per cent biofuel by 2020. Another big market is China which plans a 20 per cent blend by year 2020, India 20 per cent blend by 2012 and South Africa 4.5 per cent blend by 2013. The United States has also announced plans to achieve a 30 per cent blend by 2030.

According to Faith Odongo, an officer at the Ministry of Energy, the government is keen to harness markets for biodiesel because the fuel offers better security of supply; promotes indigenous energy resources; will help replace wood fuel for cooking and kerosene for lighting and will promote tree growing as a commercially viable business enterprise

She said the market outlook is better because The Energy Act 2006, which became operational this week, "will enhance incentives to the private sector and ensure better regulation of the energy sector."

The new policy empowers the minister to promote the development and use of biodiesel, bioethanol among other forms of renewable energy. This is boosted by the establishment of National Biofuels Committee in 2006.

Jatropha farmers are also exploring opportunities to make extra income from global carbon financing, a mechanism whereby a party from an industrialised country may purchase emission reductions which arise from projects located in developing countries.

And because such carbon dioxide trade involving agricultural projects is only eligible under current international rules if they transform a non-forest into a forest, the jatropha-led industry will have an advantage because it qualifies as a forest crop.

Business Daily