National Biofuels Development Strategy and Action Plan (NBDSAP)

2.1.1 What are Biofuels ._ o u 2.1.2 The End Use of Biofuels ...

2.1.3 Global Developments..... 2.1.4 - Biofuels Development in SADC ... 22 Benefits and Risks of Biofuels... 2.2.1 General Benefits of Biofuels Production and Use.....

2.2.2 General Risks of Biofuels Production and Use...... 23 Biofuels in the Local Context 231 Farming for Energy ...c es ssssssssssssosesoe 13

2.32 Fuel Consumption and Demand in Swaziland

2.3.3 Biofuel Quality Standards .... 24 National Legislative Framework Relevant to Biofuels 2.4.1 Current Status of Biofuels Related Legislative Framework...

2.4.2 Needto Improve Legal Framework in Support of Biofuels Development ... 25 Land Use and Agricultural Production..... 251 Land Tenure.....

2.5.2 Present Land Use

2.5.3 Agricultural Production.... 3 RATIONALE AND OBJECTIVES FOR THE DEVELOPMENT OF BIOFUELS IN SWAZILAND..... 31 Justification for Biofuels...... 3.2 Biofuels Policy Framework

3.21 TheVision of Government....

3.2.2 Goaland Objectives of the Biofuels Action Plan.....

3.23 The Four Biofuel Pillars.... 4 THE NATIONAL BIOFUELS DEVELOPMENT ACTION PLAN .. 41 Introduction..

4.1.1 Facing the Realities ... 4.12 - International Experiences and Lessons Learned....

4.1.3 Understanding the Biofuel Production Challenges.....................

4.2 Focussing National Biofuel Development ...

4.3 Implementation Road-Map: Biofuels Development in Swaziland...

43.1 Step 1 - Create the Legislative Framework ..... 432 Step 2: Create the Institutional Capacity ..... 433 Step 3: Phased Implementation... 44 Enabling the Action Plan .... 441 Activities for Step 1: Create the Legislative Framework....... 442 Activities for Step 2: Establish the Swaziland Biofuels Authority... 443 Activities for Step 3, Phase 1: Feedstocks (upstream)

4.4.4 Activities for Step 3, Phase 2: Production & Markets (downstream) ...

4.4.5 Activities for Step 3, Phase 3: Sustainability and Rural Empowerment.... IMPLEMENTATION COSTS. 6 REFERENCES.... Acronyms and Abbreviations BS Diesel blended with 5% Biodiesel BTF Biofuels Task Force E10 Petrol blended with 10% ethanol EIA Environmental Impact Assessment FAO Food and Agriculture Organization GoS Government of Swaziland GTZ Deutsche Gesellschaft fúr Technische Zusammenarbeit MNRE Ministry of Natural Resources & Energy MOA Ministry of Agriculture NBDAP National Biofuel Development Action Plan NBDS National Biofuel Development Strategy NGO Non-Governmental Organisation PPO Pure Plant Oil ProBEC Programme for Basic Energy and Conservation PRSAP Poverty Reduction Strategy and Action Plan RED Research and Development RSA Republic of South Africa RSSC Royal Swaziland Sugar Corporation SACU Southern African Customs Union SADC Southern African Development Community SBA Swaziland Biofuel Authority SEA Swaziland Environment Authority SNL Swazi Nation Land SSA Swaziland Sugar Association SWADE Swaziland Water and Agricultural Development Enterprise SWASA Swaziland Standards Authority TDL Title Deed Land [ December 2009 - National Biofuels Development Action Plan ODU al benefits of The Government of Swaziland has recognized the potential socio-economic and environment has undertaken several properly planned biofuels development as a sustainable alternative to fossil fuels and information gathering studies to support a national decision making process. Force (BTF) was In order the facilitate coordination and broaden stakeholder participation a Biofuels Task Ministry of established and included as members the key ministries (Ministry of Natural Resources and Energy, Agriculture, Ministry of Enterprise and Employment, Ministry of Foreign Affairs and Trade, Ministry of Finance, Ministry of Public Works and Transport, Department of Customs and Excise, Swaziland Environment Authority, t Ministry of Economic Planning and Development and the Swaziland Water and Agricultural Developmen Enterprises (SWADE). A number of other organizations were given observer status on the BTF. In 2008 the BTF commissioned the preparation of a National Biofuels Development Strategy (NBDS) that sought to identify a long-term direction for biofuel feedstock production, refining and use. The NBDS proposed the creation of a Swaziland Biofuels Authority (SBA) that would assume overall management and implementation powers to roll out a national biofuels programme. The NBDS also called for a review of the legislative framework and the drafting of specific legislation that initially creates the SBA and changes to existing legislation that would allow for the blending of fuels. Other recommendations included the creation of stakeholder awareness and involvement, establishment of national biofuels producers association, a capacity development plan, a research and development programme, regulatory structures, financial incentives and an action plan for the production, processing and marketing of biofuels in the country.

1.1 PURPOSE OF NATIONAL BIOFUELS DEVELOPMENT STRATEGY The purpose of the NBDS is to provide guidance to the Government of Swaziland and other stakeholders to develop and nurture a biofuel industry in Swaziland, exploiting the country's opportunities and overcoming its key challenges. The development of a biofuel industry will strengthen energy security, create employment, improve land utilisation, support rural farmers and contribute towards the global reduction of greenhouse gases. The production, marketing and use of biofuels locally will also stimulate foreign and national investment. The energy challenge is especially acute in the transport sector, as most vehicles will continue to rely on liquid fuels for the decennia to come. Diesel and petrol, obtained from fossil oil, will gradually be blended with renewable liquid fuels. The most important among them are pure plant oil (PPO), biodiesel (diesel derived from PPO) and ethanol made from starch or sugar.

1.2 PURPOSE OF NATIONAL BIOFUELS DEVELOPMENT ACTION PLAN The purpose of the National Biofuels Development Action Plan (NBDAP) is to describe the implementing activities or tasks required in order to give effect to relevant sections of the NBDS. The NBDAP has been guided by the issues, strategy statements and actions presented in the NBDS. As will be discussed in a later chapter, the Ministry has opted to selectively implement the NBDS in a manner that is deemed fit and appropriate for the current and longer-term economic and developmental objectives. The NBDAP presents in Chapter 4 the recommended implementation plan that identifies the activities, implementing agencies and indicative budgets needed to develop a viable and appropriate biofuel industry.

1.3 BIOFUELS AND FOOD PRODUCTION Biofuel production has been widely associated with increasing competition with food production and the FAO High Level Conference on World Food Security in June 2008 agreed on the significant potential of bioenergy to contribute to rural development, in particular in developing countries, both as a source of economic growth and as a provider of energy services. However, it was also stressed that bioenergy growth should be managed = December 2009 - National Biofuels Development Action Plan - carefully to ensure essential food production activities are still able to continue and expand. It was generally agreed that food security should be put before energy policy goals, and that measures should be taken to avoid competition between food and energy.* The FAO Conference generally agreed that the 2008 food price crisis resulted from many causes. These include weather-related production shortfalls, declining stocks, increasing fuel costs, increased demand for both food and biofuels, and export restrictions in some countries. 2 OVERVIEW OF BIOFUELS This chapter provides a review of global and regional biofuels development and an overview of the benefits and risks of biofuel production. It outlines the importance of biofuels in the national context and presents information on present fuel consumption in Swaziland and on feedstock and biofuels production.

2.1 GLOBAL AND REGIONAL BIOFUELS DEVELOPMENT Increasing energy costs, environmental impacts of fossil fuels, uncertainty regarding future energy supply and the need to reduce the energy import bills in both developing and developed countries, have given incentives to encourage the production of petroleum substitutes from agricultural commodities.

2.1.1 WHAT ARE BIOFUELS? Biofuels can be defined as fuels produced from biomass for purposes such as transport, heating, electricity generation and cooking. They can be produced from agricultural and forest products and the biodegradable portion of industrial and municipal waste. This strategy focuses on liquid biofuels: bioethanol and biodiesel, which account for more than 90% of global biofuel usage. The main use of liquid biofuels is in the transport sector.” Biofuels can also be used for purposes such as domestic lighting, cooking and heating, especially in poor rural communities in remote or land-locked developing countries where the costs of fossil fuels transportation makes them tive. Their performance for these other uses, however, needs to be assessed against that prohil of other technologies such as biogas, micro hydro, wind and solar. Bioethanol is alcohol produced by fermenting and then distilling sugars from sugar-rich plants (e.g. sugarcane, maize, beet, cassava, wheat, sorghum). The alcohol is then purified to remove water. Both anhydrous bioethanol (<1% water) and hydrous bioethanol (1-5% water) can be used pure as fuels, but they are usually blended with gasoline. Blends of 5% or 10% of bioethanol in gasoline, denominated ES and E10 respectively, do not require any modification to the vehicle engine. Work is now underway to develop a “second generation” of bioethanol, based on cellulose rather than sugars. This technology will allow almost any plant biomass to be used for biofuels, including forestry products (e.g. short rotation coppices), sawmill wastes, crop residues (e.g. stalks, leaves and hulks) and energy grasses (e.g. switch grass), as well as waste paper and other industrial and domestic wastes. The most promising second- generation technology for bioethanol is enzymatic hydrolysis. Biodiesel is produced from the reaction of vegetable oil with alcohol in the presence of a catalyst to yield mono-alkyl esters and glycerine, which is then removed. The oil comes from oily crops or trees (e.g. rapeseed, sunflower, soya, palm, coconut or jatropha), but also from animal fats, tallow and waste cooking oil. Some types of biodiesel can be used unblended or in high-proportion blends with modification to the vehicle engine. A blend of 5% of biodiesel is denominated as BS. * FAO, 2008a. High-Level Conference on World Food Security, Rome, 3 - 5 June 2008. Report of the Conference. * CFC (Common Fund for Commodities). 2007. Biofuels: strategic choices for commodity dependent countries. — Note the difference between processed biofuels and unprocessed biomass fuels, such as firewood, charcoal, animal dung and crop residues that are burned directly for cooking, heating and industrial use. December 2009 - National Biofuels Development Action Plan The new second generation of biodiesel involves a number of different technologies to produce biodiesel which directly from non-fat biomass. For example, Biomass to Liquid (BTL) uses the Fischer-Tropsch process, involves gasification of wood, straw or municipal waste to produce biodiesel.

2.1.2 THE END USE OF BIOFUELS One of the driving forces behind the increasing use and development of biofuels is that they offer a convenient alternative to petroleum-derived gasoline and diesel and the potential to reduce greenhouse gas emissions thereby offsetting the impacts of climate change. Since climate change has been highlighted as one of the main drivers of biodiversity loss, the mitigation of greenhouse gas emissions would contribute to reducing the rate of biodiversity loss in the future? Among current technologies it appears that ethanol produced from sugarcane and the manufacture of biodiesel from pure vegetable oil, animal fats and used cooking oil, can substantially reduce greenhouse gas emissions when compared with petrol and diesel. The combustion of 1 tonne diesel fuel or petrol leads to over 3 tonnes of CO, emissions.* It is generally accepted that biofuels will have a limited ability to replace fossil fuels. Therefore progress towards a sustainable solution for transport requires an integrated approach which combines biofuels with other technological developments and broader transport policies, including public transportation.

2.1.3 GLOBAL DEVELOPMENTS f Biofuels offer a potential source of renewable energy and could lead to large new markets for agricultural producers. However, few current biofuel programs are economically viable, and most have social and environmental costs: upward pressure on food prices, intensified competition for land and water, and possibly deforestation. National biofuel strategies need to be based on a thorough assessment of those opportunities and costs. Globally, lower tariffs and subsidies in industrial countries will be essential for ensuring efficient allocation of biofuels production and guaranteeing social benefits to small farmers in developing countries.” With high oil prices and with few alternative fuels for transport, Brazil, the member states of the European Union, the United States, and several other countries are actively supporting the production of liquid biofuels from agriculture, usually maize or sugarcane for ethanol, and various oil crops for biodiesel. Possible environmental and social benefits, including mitigation of climate change, and contribution to energy security are cited as the main reasons for public sector support of the rapidly growing biofuel industries. As the economic, environmental, and social effects of biofuels are widely debated, they need to be carefully assessed before extending public support to large-scale biofuel programs. Those effects depend on the type of feedstock, the production process used, and the changes in land use. Global production of ethanol as fuel in 2006 was around 40 billion litres. Of that amount, nearly 90 percent was produced in Brazil and the United States. In addition, about 6.5 billion litres of biodiesel were produced in 2006, of which 75 percent was produced in the European Union. Brazil is the most competitive producer and has the longest history of ethanol production. Governments provide substantial support to biofuels so that they can compete with conventional fossil fuels. Such support includes consumption incentives (fuel tax reductions); production incentives (tax incentives, loan * Firbank, L.G. (2008). Assessing the Ecological Impact of Bioenergy Projects. * CBD (Convention on Biological Diversity). 2008. The potential impact of biofuels on biodiversity. * World Bank. 2007. World Development Report 2008. December 2009 - National Biofuels Development Action Plan guarantees, and direct subsidy payments); and mandatory consumption requirements. More than 200 support measures, which cost around US$5.5 billion to US$7.3 billion a year in the United States, amount to US$0.38 to US$0.49 per litre of petroleum equivalent for ethanol. Even in Brazil, sustained government support through direct subsidies was required until recently to develop a competitive industry. Brazilian ethanol production is now no longer subsidized, but petrol is heavily taxed favouring ethanol fuel consumption (54% tax). Domestic producers in the European Union and the United States receive additional support through high import tariffs on ethanol. The cost of biofuel production globally has been pushed up by increased feedstock prices during 2008. For example the cost of maize has risen over 60 percent from 2005 to 2007. Some have said this is due to increased biofuel production using essentially food crops, but it is now becoming clear that biofuels like ethanol and biodiesel have played virtually no role in the recent global surge in food prices. Prices of major grains and oilseeds that are used to make biofuels - like maize, wheat, soybeans, and palm oil - have sharply decreased in the second half of 2008.* The movements of all the internationally traded grains were part of a bigger speculative commodity boom, tied to oil, which itself fluctuated alongside the value of the dollar (and possibly in anticipation of the credit crunch). Biofuels output rose only very gradually over the course of the past two years, whereas prices for feedstocks jumped and then crashed. The same amount of biofuels is being produced, worldwide, than before the food price crash. Feedstock supplies are likely to remain constrained in the near term. However, unless there is another major surge in energy prices, it is likely that feedstock prices will rise less in the long term. Farmers will respond to higher prices by increasing the planted areas and supply of these feedstocks. At the same time, rising prices Will lower the demand for feedstocks because of the falling profitability of producing biofuels at these higher prices. Future biofuel technology may rely on dedicated energy crops and on agricultural and timber waste instead of food crops (so called second generation feedstocks), potentially reducing the pressure on food crop prices. But second-generation technologies to convert cellulose from these waste products into sugars distilled to produce ethanol or to gasify biomass are not yet commercially viable and will not be for several years. Moreover, some competition for land and water between dedicated energy crops and food crops will likely remain. — The success of biofuels varies from country to country and largely depends on the depth of government support. However, long term investments and increased efficiency have proved important in Brazil's case. Germany, the largest producer and user of biodiesel, is now reducing its incentives, to cut losses to the fiscus, and is moving to a mandatory target. This approach has problems as fuel off-takers will only buy until the annual mandate is reached. If mandates are fulfilled early in the year, then any additional biofuels produce could lose the market. Comparative analysis of international experience shows that the biofuels industry particularly as an infant industry is at the mercy of volatile oil prices, crop prices and exchange rates. It therefore requires government support in the initial stages * * Corn and soybeans have lost more than half of their value, whereas wheat dropped even more and now costs 55% less than at its highpoint in March 2008. Canola fell from a high of $730 per ton early in 2008 to $400/ton by October 2008. Prices of other internationally traded farm products are following the same downward path. The best illustration of the role of biofuels in this 'food versus fuel' story can be found by looking at the price movement of rice, one of the world's staple crops. Rice has not been used as a biofuel feedstock on any significant scale, but its price suddenly accelerated at the beginning of 2008, in line with record oil prices, only to drop just as spectacularly during October 2008. 7 World Bank. 2007. World Development Report 2008. * Agra CEAS/UNDP, 2008. Study of the Biofuels Market in Swaziland. December 2009 - National Biofuels Development Action Plan BIOFUELS DEVELOPMENT IN SADC. feasibility study examined the potential of SADC agricultural production for biofuels A SADC biofuels following crops were development and concluded that there is a biofuels potential in the region.5 The several analysed: oil palm, sweet sorghum, sugar cane, sunflower seed, soybeans, jatropha and cassava and a result countries were identified as having a sound feedstock base for bioethanol or biodiesel production. As by technical of the study, the SADC Secretariat established a SADC Biofuels Task Force in April 2008 supported sustainable biofuels industry within expertise by GTZ to promote the development of a competitive and Southern Africa. The Task Force has undertaken numerous activities around biofuels and bioenergy through its implementing partner Programme for Biomass Energy Conservation (ProBEC). ProBEC has a technical expert addressing sustainability issues for biofuels and attached to the ProBEC Mozambique office. The Technical Advisor, drawing on international and regional experience, is promoting sustainable biofuels activities and also provides support and advice to all Member States in their efforts to develop national biofuels strategies. At the 30 Meeting of SADC Energy Ministers in April 2009, Ministers urged Member States to accelerate their initiatives in developing biofuels as a source of alternative and cheap environmentally friendly fuel but also for rural development and poverty reduction. Ministers also noted the efforts made by Member States in developing guidelines, strategies, and policies for biofuel production and utilization and urged the SADC Secretariat and Member States to identify innovative mechanisms of collaborating with Brazil, which has vast experience in biofuels development under the South to South arrangements. Ministers directed the Secretariat to facilitate the development of an all embracing renewable energy regional strategy for consideration and approval at the next meeting and establish and coordinate a Regional Biofuels Task Force. The SADC countries are increasingly interested in developing a biofuel sectors and steps have been taken to set up national and regional biofuel coordinating bodies and policies. Most SADC member states have started biofuel projects with ethanol derived from sugarcane molasses and jatropha for biodiesel being the most common. Only South Africa, Tanzania and Mozambique have developed biofuels strategies but all other member states are in the process of formulating similar strategies to guide national developments. In addition, biofuels projects have been announced in several other SADC countries, e.g. Malawi, Mozambique, Zimbabwe, Zambia, Madagascar, Tanzania and Mauritius.”® The following sections briefly present some background to regional activities that are on-going. The South African government has readily embraced the establishment of a biofuels industry, citing job creation, the need for clean and renewable energy and the creation of markets for small-holder farmers, as key motivators. The Biofuels Industrial Strategy, published in December 200, outlines the RSA Government's approach to policy, regulations and incentives. The aim of the Strategy is to establish the enabling policy, legislative and fiscal framework for the production of up to 400 million litres of biofuels, constituting 2% of the total national consumption. Sugar cane, sugar beet, sunflower, canola and soya are to be feedstocks. A blending ratio of 8% bioethanol and 2% biodiesel is envisaged. Maize and Jatropha have specifically been excluded on food security and environmental grounds respectiverA" Incentives for biofuel production are limited to rebates on the fuel levy and entail a 50% rebate * SADC (2005). Feasibility Study for the Production and Use of Biofuel in the SADC Region. * Mozambique is one of the countries having a large production potential (estimated by the government at more than 21 million litres of ethanol and 40 million litres of biodiesel annually). Mozambique is a large producer of cassava (6 million tonnes annually) and interest in using cassava in ethanol production is growing, as well as in jatropha-based biodiesel production. * RSA-DME (2007), Biofuels Industrial Strategy of the Republic of South Africa. The strategy aims to achieve a biofuels market share of 2% of liquid road transport fuels by 2013. This target is to be based on local production which will exclude the food staple maize. The strategy assumes a Petroleum Products Licensing system to be put in place, which will require petroleum wholesalers to buy biofuels production December 2009 - National Biofuels Dev elopment Action Plan for biodiesel provided that no less than 1.2 million litres are produced per year. A 100% rebate will also be provided for bioethanol that forms part of a fuel blend. The Strategy links the granting of licenses and tax incentives to the use of feedstock grown by previously disadvantaged farmers on “under-uti lised' agricultural land. The strategy is also aimed at creating a development balance between previously disadvant aged farming areas and commercial farming areas. This will ensure the sustainable development of the biofuels industry as it looks both at creating commercial agricultural areas and providing firm opportunities for new and emerging farmers. There are numerous biofuel projects currently going ahead, facilitated and funded by parastatal agencies and programmes specifically funded by government to kick start a biofuels industry in the country. The Central Energy Fund (CEF), Industrial Development Corporation (IDC), AsgiSA and various provincial departments form an interlinked and complex network of government agencies pushing the biofuels agenda forward. These initiatives almost without exception include private capital. The country has already developed quality standards to regulate biofuel qualities: SANS 465:2005 exists for bioethanol as fuel ethanol component and suppliers must meet this quality standard. SANS 1935:2005 exists for biodiesel to be used as BS, and higher up to B100 and manufacturers must ensure compliance. The country has four projects being implemented currently with five in the pipeline. Biofuel projects are subject to environmental impact assessment if they fall within the set of “listed activities” in the 1998 National Energy Management Act. Although biofuel production is not specifically listed as an activity, it is covered by other activity classes involving industrial production and major changes to land-use. A major gap in South Africa's biofuel initiatives is the absence of specific government efforts to address international concerns over sustainability, and in particular to deal with the recent EU sustainability criteria. This would not be a problem for producers aiming at the local market, but would effectively close international markets to South African biofuels, and could also impinge on the ability of international companies to purchase the local product. Nevertheless, some private developers such as PhytoEnergy International appear to be dealing with this issue on their own, and are focusing on the export trade as a key component of their business model. The South African government is also aware of this issue and many developers are confident that it will be addressed in time. In Mozambique a “Political and strategic framework for biofuels of Mozambique” (Política e Estrategia de Biocombustiveis) was published in March 2009. In preparing their strategy, feedstock options were analysed closely recommending: sugarcane, sweet sorghum, cassava, maize (for ethanol), jatropha curcas, coco, sunflower, soy, ground nuts (for biodiesel). Based on sustainability of feedstock as well as evaluating their potential for income generation, cost of production, socio-economic and environmental impacts, the selected crops are: sugarcane and sweet sorghum for ethanol, and Jatropha curcas and coco for biodiesel. The strategy proposed a phased introduction of mandatory blending: Pilot Phase (2009-2015) — increase the level of blending up to 10% ethanol (E10) and 5% of biodiesel (85); Operational Phase (2015-2021) - E10 and 85 available nationwide and possible increase up to E20 and B20; Expansion Phase (2021 onwards): development of parallel distribution network for blending above E75- E100 and B100. In response to high foreign investment demand and interest, the government launched a land zoning exercise. The National Institute of Agronomic Research (Instituto de Investigacáo Agrária de Mocambique) undertook an according to their national market shares. The current 40% fuel levy reduction for biodiesel is to be increased to 50%, while fuel ethanol will enjoy a 100% exemption. Blends of 8% for ethanol and 2% for biodiesel are envisaged in South Africa. December 2009 - National Biofuels Development Action Plan and Forestry (Direccdo Nacional de Terras e agro-climatic analysis and the National Directorate for Land Florestas) undertook a land availability analysis. large-scale agricultural activities and a map of land- The assessments identified nearly 7m Ha of land suited for was prepared. Of the identified availability in the country (capturing contiguous areas of more than 1,000 Ha) g biofuel developments), the other 7m Ha, 3,780,933 Ha (54%) was found suitable for agriculture (includin and grazing. The primary focus for 3,185,097 Ha (46%) was identified for other purposes, such as forestry . biofuel developments has been identified as Manica, Sofala and Zambezia provinces and propose an enabling In April 2006, Tanzania established a National Biofuels Task Force to formulate The Task Force published guidelines for environment to facilitate the development of biofuels in Tanzania. is aggressively pursuing biofuels biofuels development in Tanzania and a comprehensive action plan. Tanzania date has been from private and bio-energy developments, both large and small-scale. The main thrust to Investment Centre (TIC) investors and a few key NGOs, supported by government in the form of the Tanzanian , but there are at least 40 and several key ministries. The TIC has so far registered a total of 8 developers projects in various stages of development according to sources in the ministries. country also has favourable Zambia has abundant agricultural land, well suited for a range of biofuel crops. The industry. Production rainfall patterns in combination with and existing water resources and a well developed uses its policy on renewable of biofuel feedstock and value added processing looks very promising. Zambia sector investment and energy to guide biofuel developments. It provides for government incentives to private implemented gives blending targets and standards for biodiesel. The country now has 7 biofuel projects being with two projects being formulated. and eight biofuel Madagascar has five biofuel projects underway (4 jatropha projects, 1 sugar cane project), production projects are in the pipeline. No land survey or agro-ecological zoning has been undertaken. The started process of establishing a methodology to develop regional and communal land use planning has been recently. 1980's Malawi has the longest experience with use of biofuels. It started blending bioethanol (15-20%) in the developing a but recently reduced this to E10 due to introduction of unleaded petrol. The country is currently and biofuels strategy that will guide existing and future developments as well as create the regulatory legislative environment that supports sustainable biofuel production and use. new The country uses its 2003 National Energy Policy to guide biofuel developments. The country gazetted regulations in February 2009 and is now rolling out regulations governing levies and related charges through Malawi Energy Regulatory Authority. Currently bioethanol is classified as alcohol punishing it with a 30% excise duty and a 17.5% VAT. This is proposed to change soon supporting the case to produce renewable energies. 2147 7iMBAI Zimbabwe's involvement in biofuels extends back to the 1970s, when the major sugar growers and processors in the lowveld area began to produce ethanol from waste molasses as a means of dealing with the sanctions being directed at the Rhodesian breakaway state. Production of ethanol (used in a petrol blend of between 15% and 20%) continued into the late ‘80s and early ‘90s under the new government, with production stopping around the time of a major drought, 2002-3, and has been effectively dormant since. Zimbabwe is making serious efforts to reduce dependence on imported petroleum products through increased production of biofuels. In 2005 the government embarked on a new programme to displace imported diesel 10 December 2009 - National Biofuels Development Action Plan with jatropha-derived biodiesel. This initiative in particular was approved by cabinet, and according to government is now the subject of stakeholder consultation. There are also plans to resume ethanol production in the lowveld and a plant is set to re-open in October 2009 with a production target of 25 million litres/annum. Most biofuels development in Zimbabwe has occurred through actions by individual ministries and parastatals such as NocZim and Science & Technology, and not as part of a concerted national programme. With assistance from a South Korean company and the Zimbabwe Reserve Bank providing most of the capital, a biodiesel plant was constructed in Mt Hampden with a potential output of 35 million litres/annum. The plant initially used cottonseed oil as an interim feedstock until jatropha oil could be provided. Plans were then developed to distribute jatropha seedlings to indigenous farmers as part of the land resettlement programme, targeting up to 120,000 ha of dedicated jatropha holdings by 2010, of which 40,000 hectares are said to be in place at present. Botswana is moving forward aggressively with a national programme for biofuels development in two key areas: 1) Biodiesel from jatropha and animal fats 2) Bioethanol from sweet sorghum This programme is the direct result of a study commissioned in 2007 and completed in 2008, which included a detailed assessment of crop suitability, market potential and technical feasibility. The study targeted several areas for jatropha and sweet sorghum, including the Pandamatenga area near Kasane for sweet sorghum and the central district was identified as the most suitable area for production of jatropha. The Pandamatenga option has not materialised due to problems gaining support from local farmers, and this option is now on hold. The biodiesel option has now expanded to potentially encompass more than one location for the crops. The study also suggested that it is economical to produce biodiesel at large-scale, i.e. around 50 million litres per year, while small-scale producers may also be able to benefit from biodiesel production provided that they focus on producing raw oil only. Although the study identified jatropha as the main source of biodiesel, the long lead times required to produce a mature jatropha oil crop has led government to consider the use of beef tallow as a substitute feedstock in the first few years, a possibility which arises because of Botswana's large commercial beef industry. The study further recommended that both forms of biofuels will only be competitive if government reduces the current fuel levy by 50% for bio-ethanol and 75% for bio-diesel. Other options including VAT rebates and green levies were also considered by the consultant. By comparison, bio-ethanol is seen as having a lower potential for development and one of the main targets would be bioethanol gel for lamps and stoves in rural communities. The Department of Energy Affairs is currently developing a national Energy Policy which will have a chapter on biofuels. The policy is almost complete with only the development of high level strategies, which will have clear targets to be finalized. In National Development Plan 9, there is a mandate to promote research and development on new and renewable sources of energy, which implicitly includes biofuels; it is expected that government will provide a clearer policy direction for biofuels in NDP 10 (which will be starting in April 2010), particularly with regard to blending ratios and time frames. The country is not implementing any biofuel projects at the moment pending the results of two feasibility studies. Both are centred on biodiesel using jatropha and animal fat. Despite limitations of climate and arable land, Botswana is moving ahead aggressively to identify and implement biofuels opportunities, particularly for biodiesel. If the current plans for large-scale biodiesel 11 Plan December 2009 - National Biofuels Development Action African to use animal fats in biodiesel production. production are realized, they will also be the first country in ng the sustainability of biofuels production, and The country is also actively involved in the process of improvi ar. the current plans for national guidelines will address this issue in particul

2.2 BENEFITS AND RISKS OF BIOFUELS number of benefits to the country; however, The introduction of biofuels may lead to the realisation of a resolved. challenges that face biofuel production (as opposed to use) need to be and varied, ranging from employment creation, The total economic benefits of the biofuels project are many such as transport for haulage, sunflower oil poverty alleviation, technology transfer, to positive externalities business spinoffs are expected to jointly or, in for domestic use, carbon credit sales, etc. These initiatives and through new savings, investments, reduced some cases, even individually, to improve economic growth technologies." imports, leapfrogging due to enhanced human capital expertise and new

2.2.1 GENERAL BENEFITS OF BIOFUELS PRODUCTION AND USE Benefits may include: » Decreasing fuel import expenditure e Increasing export income * Enhancing energy security, especially in the transport sector * — Diversifying agricultural production, including smallholder involvement e Strengthening and diversifying rural economy and employment e Contributing to soil conservation and improving degraded ecosystems e Reducing greenhouse gas emissions. environmental conditions. The benefits that can be achieved relate to a variety of economic, social, and value of imports substituted. Savings on fuel import constitute of savings of foreign exchange equal to the Local fuel production contributes to energy security. farm incomes. Expansion of The feedstocks planted for energy cropping involve more farmers and can improve economy and create agricultural production, processing and marketing will strengthen and diversify the rural rural employment. ion and desertification and Environmental benefits can be achieved through halting and stabilising deforestat to a cleaner partial restoration of ecosystems. Biofuel programs have also the potential to contribute environment through greenhouse gas savings (reduced CO; emission). economy “has a particularly high potential to create employment” and that UNEP** observed that a green of green jobs within the green jobs are likely to outstrip brown (dirty) jobs in the coming decade. The creation change. Swaziland biofuel development will better equip the nation to face the challenges of climate GENERAL RISKS OF BIOFUELS PRODUCTION AND USE - Risks may include: « Growing competition for land and water e — Increasing food production insecurity * GoS-MNRE, 2006 a. Bio-Energy Evaluation Study. * UNEP, 2008. Green Jobs: Towards Decent Workin a Sustainable, Low-Carbon World. 12 December 2009 - National Biofuels Dev elopment Action Plan * — Decreasing biodiversity and ecosystems * — Increasing pollution of water and air * — Increasing greenhouse gas emissions. The risks that have to be considered relate not only to general availabili ty of land and Water, but also to loss of habitat (ecosystems) and biodiversity. Depending on the type of land being used for feedstocks, biofuel programs may also increase greenhouse gas savings. Biofuel production is a possible threat to food security through rising food and commodity prices for consumers due to new demand. Water and air pollution and other effects of the biofuel production may lead to human health risks.

2.3 BIOFUELS IN THE LOCAL CONTEXT

2.3.1 FARMING FOR ENERGY The National Energy Policy calls upon Government to investigate and promote the use of environmentally friendly fuels, energy products and technologies. As part of the implemen tation of the National Energy Policy, the MNRE published in May 2006 the Bio-Energy Feasibility Study: Farming for Energy Project, which analyzed the possible volume of biomass potentially producible in Swaziland and an estimation of the commercial and technical opportunities to process this biomass into biofuels. In addition the study looked at how Swaziland could develop and establish her own sustainable agro-industrial sector based around biofuels. The study looked into a range of issues including the distribution and sales system, export opportunities, laws and regulations needed for implementation and investment regulations required for short and long term development goals. The Bio-Energy Feasibility Study confirmed the viability of biodiesel and bioethano l based on locally grown and managed crops. Crops identified as having potential for the production of biodiesel included sunflower, soybeans, jatropha, sesame and safflower and for bioethanol sugarcane , sweet sorghum and cassava. The by- products of biofuels can also stimulate other industrial activities like soap from glycerine production, cogeneration from bagasse, seedcake and vegetable oil production. Fuel production through farming would develop a new energy economy in Swaziland that has the potential to create more jobs and development in the rural areas and will have significant direct and indirect (multiplier effect) economic, social and environmental benefits to the whole economy. 2 FUEL CONSUMPTION AND DEMAND IN SWAZILAND The energy picture in Swaziland is characterised by heavy dependence on imported energy from South Africa, which dependence has increased steadily over the years. The country has no refining capacity and hence imports all of its fuel from South Africa. The total petrol consumption in Swaziland in 2007 was 115m litres, the total consumption of diesel 122m litres, and that of paraffin about 8m litres. The demand for petroleum products amounts to 23% of the total energy demand. On average, a total amount of E1,564,658,333 was spent on the purchase of fuel by consumers in 2007. According to demand projections, the consumption of petrol will increase to about 183 million litres and that of diesel to about 170m litres by 2015. Consumption of paraffin has remained reasonably constant over the last 10 years, and is therefore expected to remain at present levels for the foreseeable future. The consumption of fuel is not expected to show a linear increase in relation to the number of vehicles due to more economical use of fuel in modern engines and the change in motorist behaviour at increasing fuel prices. Biofuel blending needs to be phased in to make sure feedstock production can meet the blending requirement. Final blending targets of B10 and E10 are currently aimed at. 13 t Action Plan December 2009 - National Biofuels Developmen is Sugar Corporation and USA Distillers) in Swaziland The current production of ethanol (Royal Swaziland and USA Distillers produces 134,000 litres/day at 96.4% strength approximately 60m litres per year (the RSSC produces 120,000 litres/day). . Production of and is limited to a pilot bioethanol project Current biofuel feedstock production in Swazil litres since the project began in February 2008. bioethanol from the RSSC plant has been at 2,444 an activities of D1 Oils Swaziland, which has started Biodiesel feedstock production was limited to the a over the next five to ten years to supply 13 million ambitious programme to cultivate 10,000 Ha of Jatroph for D1 Oils ceased operations in May 2009 and are looking litres of refined Jatropha oil for blending. However, a new but no further development is anticipated unless new investors. Initial plantings are still in place investor can be found. of is viewed as one reason behind the slow introduction The lack of a clear policy direction from Government the utilisation of land for biofuel production and biofuel technologies and feedstock. Challenges around ck development. production costs remain critical obstacles to further feedsto such biofuels to a national quality For the introduction of biofuels in a new market it is necessary to produce engine manufacturers. Therefore the appropriate standard to ensure widespread adaptation by vehicle . The Swaziland Standards Authority (SWASA) has standards have to be in place before biofuel use can proceed national standards and is pivotal in mandating the legal and institutional mandate to facilitate and develop relevant biofuel standards. and dispensing requirements that need to be Both biodiesel and bioethanol have their own handling, storage the production of bioethanol is the replacement of met to ensure adoption. The most important point for The ethanol content of fuel ethanol has to be water to avoid corrosion and the segregation of ethanol blends. for anhydrous ethanol. at least 99.5% which is even higher than the Brazilian standard ed over years. The standards for biofuels Standards for biofuels already exist worldwide and have been develop SANS 465:2005 for bioethanol as fuel ethanol in Swaziland should mirror those developed in South Africa, ie 1935:2005 for biodiesel to be used as B5, component and suppliers must meet this quality standard and SANS and higher up to B100 and manufacturers must ensure compliance. adopting new standards and this procedure SWASA have a well documented procedure for introducing and must be followed to ensure national adoption. LEGISLATIVE FRAMEWORK RELEVANT TO BIOFUELS 24 NATIONAL d

2.4.1 CURRENT STATUS OF BIOFUELS RELATED LEGISLATIVE FRAMEWORK and enforce the provisions of the NBDAP. There is currently no comprehensive legal framework to domesticate provide a satisfactory coverage of The country relies on partially outdated pieces of legislation, none of which biofuels production and trade. y Board from a public The SwazilandElectricity Company Act (2007) transforms the Swaziland Electricit (SEC), which is wholly owned by the enterprise into a company, the Swaziland Electricity Company Electricity Act of 2007 removes the Government. This development along with the establishment of the SEB, in conjunction with the internal monopoly in the electricity supply industry. The corporatization of the future allow other players to compete restructuring ensures a commercialisation of operations and will in the period, other elements of the restructuring will continue to be on an equal footing. During the Plan establishment of the Energy Regulatory Authority, according to the Energy implemented, including the 14 December 2009 - National Biofuels Development Action Plan Regulatory Authority Act of 2007. Under this Act, the Authority will amongst other functi for the issuing of licences for activities in the ons, be responsible energy sector. There are ancillary pieces of legislation that regulat e areas of close importance to the biofuel industr framework. These pieces of legislation require amend y ments to include biofuel as a product similarly seeking regulation. The Fuel Oil Levy Act no 1 of 1979 is to facilitate the collection of fuel levy by imposing levies on “any fuels” including petrol, diesel, aviation spirit, kerosene, distilla te fuel, residual fuel oil, grease and petroleum gas. The Price Control Order no 25 of 1973 provides for the regulation and marketing of goods at prices fixed by the Price Controller appointed in terms of the Act. The Price Controller in terms of this Act is empowered to: * - Fixthe maximum price at which any goods may be sold by any person; * — Fixthe maximum price at which any person may purchase any goods from any other person; * — Fixthe maximum charge that may be made by any person for any specified service; * . Prohibit any person from making any change for any specific services. This Act is utilised in the fuel sector to guide and control the pricing of fuel to safeguard the interests of the consum ers. Pursuant to this objective as well as other conside rations, a petroleum unit was established to implement Legal Notice No. 65 of 1996 which amongst other things seeks to curb and prevent rebates in petroleum trade as well as ascertaining “the correct pricing model to be used for assessing the necessary review of the oil industry profit margins” in Swaziland. The Customs & Excise Act No 21 of 1971 provides for the levying of customs, excise and sales duties and a surcharge, the prohibition and control of the import, export or manufacture of certain goods and for incident al matters. The Income Tax Order No 46 of 1973 regulates tax that is levied on the annual income of individuals, companies, corporations and unincorporated businesses based upon the amount earned. The Control of Supplies Order 46 of 1973 controls and regulate s the supply of goods to the public or a section of the public to uphold their interest as well as the supply of goods to any particular area as mentioned in the regulations. The Disposal or Use of Petrol Regulations No 46 of 1973 designa tes the legal times and dates upon which a reseller may sell or dispose of petrol. It further limits the quantiti es to be supplied by the wholesalers to their bulk consumers. It also prohibits the delivery of petrol other than directly to the tanks. The Environment Management Act of 2002, which is the supreme law governing environmental matters in Swaziland, is to promote the enhancement, protection and conservation of the environment and where appropriate, the sustainable management of natural resources . The Act is intended to provide and promote the enhancement, protection and conservation of the environment and the sustainable management of natural resource s. It also turned the Swaziland Environment Authority (SEA) into a body corporate and established the National Environment Fund. In terms of this Act, the SEA has the power to halt any and all developments that have not been adequately scrutinised for their environmental impact. Any policy, bill, regulation, programme or plan requires a Strategic Environmental Assessment. The Environmental Audit, Assessment and Review Regulations of 2000 is to provide for prior environmental assessment before undertaking any developmental activity in the country so as to practically avoid and/or mitigate adverse impacts on the environment during their implemen tation. They make provision for a 15 Plan December 2009 - National Biofuels Development Action s, viz.; sustainable important principle in environmental matter systematic implementation of the most ecosystems and s, to a large extent, conservation of some development, and its application. This ensure ts implementations concept of public participation during projec habitats. They further put into practice the environment. that are likely to have adverse impacts on the nmental ion for plant species and requires that an Enviro The Flora Protection Act of 2001 provides protect nous flora. of any activity that would impact on indige Impact Assessment (EIA) be carried out in respect and (2008) is intended to provide for the management The Biodiversity Conservation and Management Bill international of Swaziland and to give effect to ratified conservation of biodiversity in the Kingdom to matters connected therewith and inciden tal thereto, agreements affecting biodiversity in the Kingdom and Management Act No. 5 of 2002. enacted within the framework of the Environment use of ces Bill (2006) captures issues on the access and The Access and Benefit Sharing of Genetic Resour Environment Management Act of 2002, it recogni ses its biological diversity. Although not made in terms of the with such issues as community rights, including plant supremacy. The Bill supplements the Act and deals Bill for the management of ABS issues. The breeders’ rights. It proposes institutional arrangements s the country's indigenous knowledge system and supplements the Seed Varieties Act and further protect establishes a certification system. - 242 NEEDTO IMPROVE LEGAL FRAMEWORK IN SUPPORT OF BIOFUELS : DEVELOPMENT NBDS identified a need for a With no legislation covering biofuel use and production, the specific g will deal with all the issues surrounding fuels includin comprehensive petroleum legislation framework that of evolution. Such legislation should not be too biofuels as well as other issues that are in the process and use of biofuels and other alternative energy restrictive but accommodative of the ongoing developments is broadly couched in an enabling language, sources. It is recommended that the legislative framework pments, facilitating use of biofuels through providing for necessary accommodation for future develo provide empowering, guiding or delimiting recognition and removal of legal barriers. The legislation will and secondary legislative instruments or provisions that may be spread across a number of primary consolidated in a single instrument.* 25 LAND USE AND AGRICULTURAL PRODUCTION 251 LAND TENURE (SNL) and Title Deed Land (TDL). The two main forms of land tenure in Swaziland are Swazi Nation Land by the chiefs. SNL accounts for about SNL is held in trust for the nation by the King and is mostly administered rights of use are held for agriculture 74% and consists of arable land, grazing land, and forests. Individual use the remaining land as a common resource (communal (subsistence crop production); communities SNL is not communally used but controlled extensive grazing and community forestry). However, about 25% of be used as collateral; consequently farmers by government, parastatals or companies. Unlike TDL, SNL cannot on SNL generally lack access to commercial finance. and is mainly used for industrial TDL is individually or corporately owned, covers about 26% of the country al farming under irrigation (mainly timber plantations, livestock production (ranching) and commerci sugarcane, but also fruit). land. The pressure on land is driven by Under the 2005 Constitution, all people have equal access and rights to uses, e.g. agriculture and residential the growing population and the demand for more land for competing land and biodiversity conservation in the in peri-urban areas, forestry and grazing in the Highveld, sugarcane * Gos-MNRE, 2006a. Bio-Energy Feasibility Study. December 2009 - National Biofuels Dev elopment Action Plan Lowveld. Mechanisms of land allocation and administration are not adequate to appropriately deal with the multifaceted physical planning, which is exace rbated by poor chiefdom demarcation and disput es, as well as lack of discussion fora. The main land use in Swaziland is extensive grazing : communal extensive grazing covers 50% of and commercial ranching 19%. Grazing takes the country places on natural grasslands, savannas and woodlands, which areas are also used for community forestry. Small- scale subsistence rainfed agriculture covers about large-scale commercial irrigated and rainfed 12%, and crop production 6%. Plantation forestry covers about 8%, and the remaining 5% is made up of national parks and urban areas.> Land suitable for arable cultivation is rather limited; it is estimated at about 20% of the country or 350,00 The area under crops is estimated (2005) at 120,000 0 Ha. Ha (70,000 Ha rainfed and 50,000 Ha irrigated), which substantial is a decrease of the percentage rainfed compared to levels in the 1980s and 90s.° Land under irrigationis increasing annually with 1,000-2,000 Ha, mostly driven by expansion of the sugar industry, although alternatives are now being sought due to decreasing profitability of the production of sugar Swaziland and insufficient surface water. The newly in irrigated land - mainly in large irrigation schemes such as of the Komati River - was formerly used for subsistence farming or grazing. There are strong indications that an increasing propor tion of arable land is no longer used; most likely as the combined result of the HIV/AIDS weakened labour force and recurrent droughts affecting the country and region as a whole. However, some of this rainfed arable land, together with land used for grazing, is converted to residen tial use, in particular in informal peri-urban areas, but also as part of formal urbanisation. Changes in land use for industrial timber plantations or for conser vation have been very minor in recent years, although there has been pressure to convert more land to either of these uses. AGRICULTURAL PRODUCTION Agriculture is the backbone of the Swazi economy and is critical for achieving the overall development objectives of the country. The agriculture sector of Swazila nd is acutely dualistic. A dynamic commercial sub- sector established on TDL that occupies 26 percent of the land, holds an estimated 90 percent of available irrigation infrastructures, and uses modern technologies to produce mainly cash crops. A traditional sub- sector, based on communal tenure in the Swazi Nation Land (SNL) involves semi-subsistence smallholder agriculture with communal grazing. The agricultural sector's share of GDP decreased from about one-third at independence in 1968 to less than nine percent in 2003. However, agriculture is far more importa nt for Swaziland's population and for national economic development than its contribution to GDP suggests . Crucially, agriculture plays a key role in the lives of the majority of the population, since over 70 percent of the population and households rely on agricultural output as a major source of income and food security, either as small-scale producers or as recipients of income from employment on medium and large-scale farms and estates. Commercial TDL agriculture remains the principal catalyst for agricultural economic development and income generation. Commercial estates generate more than 70 percent of all agricultural output. The share of crop production on SNL of total agricultural output has dropped from 33 percent in 1996 to 14 percent in 2003. * FAO/GoS-MOAC, 1994, Present Land Use. The figures quoted for arable use are gross figures including infrastructure, grass strips, etc.; net figures are at least 30% less. Land Use has changed since 1994, in particular small-scale farming has decreased, notably in the Dryland areas (Lowveld). ** Murdoch, 1970; FAO/GoS-MOAC, 1994; FAO/Go5-MOAC, 2005; Agricultural Diversification Policy 2008 (preliminar y) a7 2009 - National Biofuels Development Action Plan s about 650,000 people depend to a greater or lesser Commercial estates employ about 20,000 people, wherea extent on the traditional subsistence sector. tially less than the 35 % of the manufacturing sector, Although the contribution of agriculture to GDP is substan one third of value added within the manufacturing agricultural output forms the raw material base for about g also contribute substantially to national export sector. Agriculture and agriculturally-based manufacturin iture through their contributions to the direct and earnings, thereby allowing increased government expend indirect tax base. crop on TDL) and maize (the main staple crop on Crop production mainly consists of sugarcane (the main cash e. Cotton used to be widely grown on both TDL SNL). Other important cash crops include citrus and pineappl has tobacco. and SNL, but has very much declined in the last few years, as and the area under sugarcane has continuously Sugar is the most important agricultural produce of Swaziland with expansion currently slowing down. The increased since the sixties, reaching 52,000 ha in 2006/07, on of sugar 631,000 tons. Presently, the 2007/08 production of sugarcane was about 5 mt and producti non-existent in the early 1990s. industry has about 500 small-scale growers, which were virtually industry, the production of pulpwood and the The major agro-industrial activities in Swaziland are the sugar These activities take place in the private sector, with processing of fruit (canned fruit and liquid concentrates). ion of agro-industrial activities is on the export high technology and management levels. The main orientat ustrial output. market, which accounts for more than 90 percent of all agro-ind moderate quantities of groundnuts, pumpkins, Following maize as the most important subsistence crop, well as very limited quantities of sorghum, beans, sweet potatoes and vegetables are grown on SNL as s. cowpeas, melons, watermelons, cassava, bananas, peaches and avocado to produce enough maize to meet domestic needs. As a result of low productivity on SNL Swaziland is unable has been well over 100,000mt, with some During the 1980s and 1990s the maize production in most years Since 2001 the total annual production peaks of 140,000mt and some lows of 50,000mt as a result of drought. record lowest harvest of 27,000 mt in has largely fluctuated between 60,000 and 80,000mt, with an absolute d at around 160,000 to 2007, only one-third of the five-year average. Domestic needs are normally estimate 180,000mt.?7 to pre-2000 levels. However, food It is essential that food production levels in Swaziland are restored alternative possibilities in addition to the production should also be boosted by exploring and exploiting Opportunities to improve overall food and current more traditional and conservative ways of producing food. arable crops through selecting and cultivating new or agricultural production can be found by diversifying underutilised crops. RATIONALE AND OBJECTIVES FOR THE DEVELOPMENT OF BIOFUELS IN SWAZILAND B TIFICATION FOR BIOFUEL A July 2008 report by the 7 Gos-MOAC/FAO, 2005. Strategy Brief for National Food Security and Agriculture Development: Horizon 2015; would need 212,000mt of UN Food and Agriculture Organization (FAO) and WFP Crop and Food Supply Assessment Mission said Swaziland75,500 tonnes. The country cereal for the marketing year 2008/09 (April-March), against an estimated domestic availability of around and 13,000mt of rice. An would need to import around 136,500mt of cereals, comprising 81,000mt of maize, 42,500mt of wheat estimated 20 percent of the population is thought to be going hungry. the improved vields so The poor harvest evoked a flow of aid from donors, which helped boost anticipated overall 2008 production, but reduced their support; far have created a catch-22 situation: the food security crisis has been mitigated to some extent and donors have now, input prices are sharply higher, but there is not enough money to subsidise the cost to farmers. 18 December 2009 - National Biofuels Development Action Plan The production and use of biofuels have entere d a new era of global growth, with both the scale of the industry and the number of countries involved reachi ng unprecedented levels. Surging investments in biofuel production are being driven by a variety of factors, s which include countering rising international fuel costs and a desire to reduce energy dependence on oil exporting countries thereby increasing energy security. Underlying the growing commitment of governments to biofuels development is the desire to find new markets for farmers and their products - thereby providi ng employment, diversifying livelihoods, enhancing energy security and reducing emissions of carbon dioxide and other gases that are contributing to global warming. The combination of the certainty that crude oil and energy prices will increase in the short to medium term, the fact that carbon credits can be developed and traded, as per Kyoto Protocol, the knowledge that particular trees and crops suited to biofuel production can grow under rainfed and irrigated conditions in Swaziland, and the fact that such biofuel can relatively easily be mixed into diesel or petrol to make biodiesel and bioethanol, makes it very attractive for Swaziland to develop a strateg y on how to achieve the many opportunities that could arise from biofuels. A national biofuels strategy will provide incentives for investments that take advantage of these opportunities while also taking into account the need to minimize risks to food security for the poor, address environmental concerns, protect the rights of indigenous peoples and achieve a net reduction in emissions.

3.2 BIOFUELS POLICY FRAMEWORK

3.2.1 THE VISION OF GOVERNMENT Subject only to the provisions of the Constitution, all policies in Swaziland should facilitate the Vision of the Government, as expressed by the Prime Minister in 2004: “To build a truly twenty-first century Kingdom of Swaziland, culturally united, integrated and stable, economi cally prosperous and socially well organised with equal opportunities for all, irrespective of gender, and responsibility from all”. In line with the Vision, the Mission of the Government of the Kingdom of Swaziland is: “To provide a climate and infrastructure that will progressively maximise the quality and security of life of the people of Swaziland and make the best use of the country’s natural and human resources ”. To this end, the 1999 National Development Strategy (NDS) includes a subsidiary Vision and Mission Statement that is intended to inspire and direct socio-economic development up to 2022: “By the year 2022, the Kingdom of Swaziland will be in the top 10% of the medium human develop ment group of countries founded on sustainable economic development, social justice and political stability”.

3.2.2 GOAL AND OBJECTIVESOF THE BIOFUELS ACTION PLAN — The National Biofuels Development Action Plan is predominantly driven by the need to address issues of economic development and environmental benefits. The NBDAP seeks to take advantage of the country's existing skills and knowledge in sugarcane production and utilisatio n of molasses for ethanol production whilst cognisant of the urgent need to stimulate rural development and to reduce poverty by creating sustainable income-earning opportunities. Furthermore, the NBDS contribu tes towards the achievement of the renewable energy goals and the reduction of greenhouse gas emissions — an important step to combat global warming. The goal of the National Biofuels Development Action Plan is to ensure that: “The biofuel potential of Swaziland is developed and the production managed in an environmentally sustainably way, without constraining food security and benefiting all people in Swaziland”. 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4.4 ENABLING THE ACTION PLAN three steps. It provides required to implement the NBDAP via its This chapter describes the specific tasks or activity. s and likely budget to implement the task timelines, relevant stakeholders, task owner action hierarchy using tion listed in the NBDS was slotted into an Each appropriate suggestion or recommenda a tier system as follows: Criticality Action Example Pillar 2: — sustainable : | Biofuel four N/A of the Feedstock Production pillars strategy High - success of the onto determin study Commis asi € Key — action Scope of target feed-stocks and curren items strategy is dependent on food and non-food uses Strategy : implementing the action Document completely Major — sub- Medium - Steps may Convene stakeholder discussion 2 steps need to be revised / to review current and expected | future — production of each!i changed as necessary as the strategy is feedstock 3 Details Low - a punch list of “to- Determine guest list 30 r 2009 - National Biofuels Development Action Plan requirex for implementing the sub- steps 4 Sub details Base Level - Tactical Send invitations and arrange operations venue The top Tier (0) is the pillar, the seco nd tier (1) are key actionable items , the third tier (2) are the major required of the actionable items. For steps the purposes of the biofuels action plan, lower level tiers (3 to 4) are The following tables present the result s of a storyboarding exercise that sough expectations referenced in the National t to translate the goals and Biofuels Development Strategy into discr eet actions. The following series of graphics presents the critical tasks and subtasks for each with supporting details and documentat of the four pillars of the NBDS ion. A top-level “Gannt” chart of the Tier 1 steps for the four pillars is supported by additional Gannt charts for each pillar with the tier two and some tier three tasks identified. Linkages betw chart and key milestones identified. een steps are included on the The resulting activities from these proce sses are presented as: 4.4.1 — Activities for Step 1: Create the Legislative Framework (page 32)

4.4.2 Activities for Step 2: Establish the Swaziland Biofuels Authority (page 37)

4.4.3 Activities for Step 3, Phase 1: Feedstocks (upstream) (page 43)

4.44 Activities for Step 3, Phase 2: Production & Markets (downstream) (page 47) 445 Activities for Step 3, Phase 3: Sustainabi lity and Rural Empowerment (page 52) 31 uels Development Action Plan December 2009 - National Biof Director Compliance, “Monitoring & Evaluation Biofuels tative association, a National ed to form their own represen Biofuel producers will be encourag , marketing and regul atory matters the SBA and Government on trade Association, which will interact with esentation of the inter ests of s of cond uct and adhe renc e to set standards and general repr including code producers and distributors. ramme s the results of the biofuels prog gned and used by the SBA to asses A monitoring framework will be desi ion of biofu els, feed stock its objec tives . Data colle ction will cover: production and consumpt relative to level of the value chain, that of small scale farm ers, area cultivated, prices paid at each production including l performance of the industry will of co-p rodu ct, jobs crea ted and the price of fossil fuel. Environmenta sales also be monitored. key stakeholders, define its rnme nt actio n is neede d to estab lish the SBA and, in consultation with Gove te, place the frameworks that will promo rd thinking institution to put in mandate. The SBA should be a forwa and investment prog ramm es will be lopment and use. Initial SBA activities encourage and support biofuel deve in Step 1. financed from fuel-levies established The SBA: the marketing and trade of co-o rdin ate and lead the invo lvement of relevant institutions into a) will biofuels. ction and processing tocks and liquid biofuels though produ b) - will control the production of feeds licenses. line with SACU's regulations - will monit or the impor t and expor t of feedstocks and liquid biofuels in c) and national laws. of biofuels are enforced. s required for the marketing and sales d) - will ensure that the safety regulation 28 December 2009 - National Biof uels Dev elopment Action Plan e) will, with the cooperation of the SWASA, develop and upho ld national biofuel quality stan dards. safety measures. 8) will identify key capacity challeng es and opportunities in trade industry. and marketing aspects of the biofuels h) will facilitate the establishmen t of a capacity building proc respect of trade and marketing ess that strengthens the indu functions. stry’s ability in i) will facilitate the establishment of a Biodiesel Producers Associat registration system for biofuel prod ion in the country and develop uction. a i) — will establish a National Biof uel Coordination Committee (NBC and civil society representatives) C) of key stakeholders (public, who will be involved in marketin private g and trade of biofuels k) — will promote research in agronomy, production and dist technologies of suitable biodiese ribution on biofuel feedstock l feedstocks. and 1) will investigate the options of biofuel feedstocks, €.8. PPO, whic and can easily be used, also in h does not need further processi remote areas and at ng small scale. m) will undertake water impact asse ssments to assess the scale and cognisance of national water asse significance of the impact in full ssments and plans. n) will develop and apply national environmental sustainability crite feedstocks and processing have ria to ensure that biodiesel only minimal impact on biodiver sity and food security. PHASED IMPLEMENTATION Step 3 is the core implementati on plan for biofuel development. It is broken down into three disti “build slowly from strength”. nct phases to Phase 1: Develop downstream bioethanol markets — equates to Pillar 3 of the NBDS *Workwith existing sugar companie s to commercialize by-products (molasses) * Focuson developing marketing and distribution capabilities * — Keepcapital costs to a minimum Phase 2: Diversification of ethanol feedstocks (upstream) — equates to Pillar 2 of the NBDS * Targeted focus on feedstock diversific ation * — Close partnership with limited number of established contract farmers * — Leverage and extend marketing capability developed in Phase 1 Phase 3: Empower Rural Farmers— equates to Pillar 4 of the NBDS * — Use knowledge gained in Phase 2 to establish extension program to encourage small holders to grow appropriate feedstock * — Useestablished market develope d in Phase 1 to set reliable grain price s and quality standards 29 Action Plan December 2009 - National Biofuels Development * Develop and monitor markets standards * — Develop and monitor quality and safety funding e — Monitor prices and set fuel-tax needs to ensure stable * Implement R&D programs

4.3.4 STEP1- CREATE THE LEGISL VE FRAMEWORK and regulations. The cornerstone of a successful biofuel Step 1 is the establishment of biofuel supportive laws and regulatory environment that encourages biofuel industry rests with a supportive and conducive legislative at the same time is regulated to ensure fair and investments, blending and fiscal support measures whilst environmentally sustainable. equitable benefits, defined operational limits and is es that amongst other things, mandates biofuel Biofuel development has to be guided by legal mandat requires regulations to manage what is a complex production, processing and use. Such an industry also organizational and logistical process. returns on their investment and that the system in Investors need assurance that they will be able to achieve rence and only market forces and inherent risks will which they operate is transparent and free from interfe determine the level of their success. laws must be drafted and adopted that gives rise Therefore, an umbrella biofuel act or amendments to existing laws will guide: to a conducive legislative and regulatory environment. Such o — Fuel quality standards o — Biofuel price-control mechanisms o Mandatory biofuel blending rates o Marketing and trade related benchmarks accountability. o Fiscal incentives and supportive financial governance and 26 December 2009 - National Biofuels Development Action Plan Draft and enact legislation that defines biofuels and commits the government to development of the industry Create laws to regulate production and trade of biofuels and associated byproducts Determine taxation, levies, blending requirements and pricing formulae to ensure self- funding of industry Step 2 is the establishment of the Swaziland Biofuels Authority (SBA) that will develop and regulate the industry. The NBDS recognized the importance of creating a coordinating and managing body to manage the complex processes needed to establish and manage a viable biofuel industry. The NBDS called this body the Swaziland Biofuels Authority and would be established via an Act of Parliame nt. The establishment of the SBA will follow national procedures already in existence in terms of the Public Enterprise (Control and Monitoring) Act of 1989. The SBA is the coordinating and regulating institution that will have the authority over biofuels. SBA operations will be guided by a governing board which will comprise members from the relevant ministries, the private sector (i.e. growers and processors) and representatives of civil society. The SBA will manage, coordinate and report on all the aspects and activities of the developm ent of biofuels in Swaziland. Though the SBA will have to identify sustainable long-term funding, funding sources could comprise of government, donors, budgetary transfers, disbursements from the COM projects, and selected levies on some goods. 27 Action Plan December 2009 - National Biofuels Development , cassava, castor beans) would increase rural e — Crops suited for small-holders (ie jatropha, sorghum ent yield and quality requirements needed for empowerment but are unlikely to achieve consist processors. ane, soya, oil seeds such as sunflower and canola) e Crops suited for large-scale producers (ie sugarc but would be highly efficient in consistent yields and would not create significant rural empowerment quality requirements. the conversion of land from food production to fuel The Ministry is also aware of the increasing concern over biofuel sector could threaten the country's ability to production and that integrating small-holders into a ted with this are the potential increases in produce sufficient food to feed its growing population. Associa is converted to biofuel crops affecting many environmental degradation and risk as more and more land important ecosystem services and goods. have faced in the past when converting from The Ministry is also very aware of the challenges rural farmers ion. The history of cotton production which subsistence based production to more commercialised product seed for processing, has been marked with used thousands of contracted rural farmers to produce cotton in debt and unable to produce sufficient many unfortunate challenges and failures that left many farmers acknowledges that such challenges can be cotton to keep the processing plant operating. The Ministry resources, but in the overcome through well planned interventions, capacity building and access to financial environment that has not favoured cotton production in Swaziland, short-term and in a global economic at this time. attempting to solve the challenges is beyond the country's capacity viable biodiesel production model that the The Ministry is also aware that globally there is no demonstrable ble provision of economic feedstock. Attempts country could adapt or adopt that would achieve the sustaina Jatropha failed. The failure was partly by D1-BP Fuel Crops from 2005-2009 to grow and commercialise d does not have an ideal agro-ecological economic but mostly agronomic difficulties with jatropha. Swazilan successes in jatropha production and environment for jatropha. In addition there have been few international before it can be viably introduced the trend now is focusing more on research and domesticating wild varieties crops such as soy, sunflower and canola. to farmers. The majority of biodiesel is derived from traditional food regionally and internationally, in producing The Ministry is also aware of Swaziland's comparative advantage sugar from sugarcane and the significant global demand for bioethanol. Swaziland produces some 620,000t annually with the resulting availability of some 190,000t of of sugar already some 52,619 Ha of land under molasses (the most common feedstock for bioethanol). The country has current potential, therefore, for sugarcane which yields, after processing, around 190,000t of molasses. The per annum (using a conversion ratio is producing fuel grade bioethanol from molasses is about 50 million litres in 2007 was 115m litres and by 4 kg of molasses / 1 litre of ethanol). The total petrol consumption in Swaziland some 18m litres of bioethanol would be 2015 is estimated to be 183m litres. If an E10 blend was implemented, needed by 2015 and this is well within feedstock availability. from 2004 to 2008 is RSSC installed ethanol production capacity is 32m litres/year. RSSC ethanol production presented below. 2009 2008 2007 2006 2005 2004 Production 24,152,000 9,100,000 13,062,000 13,660,000 13,101,447 Potable (litres) 25,853,00 Fuel grade (litres) 2,444 are also advantageous. The The environmental benefits of using bioethanol derived from cane molasses 87-96%. Molasses derived greenhouse-gas savings (% vs. petrol) for cane derived bioethanol is between from 8 to 9 units of energy for each unit bioethanol also has a favourable energy balance and returns expended.

4.2 FOCUSSING NATIONAL BIOFUEL DEVELOPMEN 24 December 2009 - National Biofuels Dev elopment Action Plan Cognisant of the economic, environmental and production challenges, the Ministry makes the following recommendations: * Focus near term on existing sugar producers to commercialize process by-products o Swaziland has good experience with sugarcane and has established businesses in the sector with some experience making bioethanol o Requirement is for development of downstream (production, blending and marketing) infrastructure and expertise - Swaziland has none at present o Critical to determine the appropriate stimuli: demand requirements (blending mandates) and price supports (fuel levies) to sustainably fund the industry * — Delay rural empowerment until functioning extension programmes, production modalities, crop selection and solid markets have been established © Initiate agronomic trials of promising biofuel crops that are suited to small-holder production constraints and opportunities o Protect the small-holder from market failure (ensure there is demand for their produce and a price history they can trust) and develop viable business plans for selected crops o Identify realistic and viable funding sources that can be accesse d and utilised by small-holder farmers to develop their biofuel feedstock production o Train extension officers to focus on environment-appropriate and commercially viable feedstocks * — Delay investment in biodiesel feedstock production for the foreseea ble future. There is presently no example of a profitable biodiesel industry anywhere in the world so the Ministry recommends waiting for other countries to prove viability first then re-evaluate the introduction of biodiesel feedstock production. * — Establish a biofuel regulator to manage and coordinate biofuel production, marketing and utilisation.

4.3 IMPLEMENTATION ROAD-MAP: BIOFUELS EVELOPMENT IN SWAZILAND This NBDAP proposes the implementation of a focused and refined NBDS through a phased implementation plan: Step 1: Create the Legislative Framework: Create legal authority for biofuels production and use. * — Establish key program goals and definitions * Enable production and sale of bioethanol * Setmandatory blending requirements * — Create mechanism for funding industry Step 2: Create the Institutional Capacity: Develop Institutions to manage industry * — Create, staff and fund the Swaziland Biofuels Authority * — Finalize complete value-chain investment plan * — Initiate funding mechanism to capitalize investment plan * — Develop R&D programs Step 3: Implementation: Phased implementation to “build slowly from strength” 25 Action Plan December 2009 - National Biofuels Development as well as small- both mechanized TDL experienced farmers » — Unfocused: The strategy encompasses holder SNL subsistence farmers of e an opinion on the likely costs and benefits » Costs unknown: The draft strategy does not ventur developing a biofuels capability for Swaziland they are history of biofuels development suggests that « — Difficult task even for rich countries: The of oil with very few exceptions (e.g.: Brazil) usually uneconomic at the recent average price y: It has limited capacity to sustain a long-term e Swaziland is a small resource-constrained countr investment in a large-scale biofuels program ng targets within five years, requiring a large e Toofast: The Draft plans to meet large national blendi time frame scale biofuels industry development in a very short to a phased biofuel implementation plan that seeks For these and other reasons, the Ministry recommends biofuels an economically and environmentally sustainable keep costs low as the nation learns how to build scope for the biofuel industry will mature and broade n the industry. In time building on the experience gained, participation of lower skilled and resourced producers. to reflect and assess regional and global success and In developing this NBDAP, the Ministry has had time a wide boom’ that saw millions of Dollars invested into failures in biofuel production. The original ‘biofuel s on on those investments. International concern range of international projects has not yet seen any return , has caused many countries to review their biofuel environmental, financial and social impacts of biofuels the most appropriate benefits whilst avoiding the programmes and to scale back or investigate further negative impacts. once considered as a tool for poverty alleviation The Ministry is aware that international biofuel production, aims. There are continental examples where small- and rural development, has failed to achieve these noble has worked, e.g. Mali but there are no examples of scale biofuel production for village level energy needs large-scale production projects have been private large-scale production having achieved this. To date all resulted in a variety of social, institutional and sector funded often utilising communal land that has all experienced these forms of impacts and environmental concerns. Ghana, Tanzania and Mozambique have ional instruments. It should also be noted that each country has tried to tackle them using their own institut land area available for a variety of uses whereas the countries cited are physically much larger and have the of poor land use planning no longer has contiguous Swaziland is much smaller in comparison and after decades activities that would not require the resettlement of large land areas suited for large-scale agricultural numbers of residents. cing alternative livelihoods to the thousands of The Ministry is also acutely aware of the importance of introdu ment and using biofuel crops as one tool to rural farmers battling with poverty and a degrading environ is aware of the low level of successful contribute towards resolving their situation. However, the Ministry e poor farmers in many neighbouring countries. penetration of biofuel feedstock production by rural resourc successful programme that produces feedstocks for The Ministry has not been able to identify a single ne derived ethanol in Malawi and Zimbabwe, any processing into biofuel. Nor has it found, apart from sugarca le blending ratios. As a consequence, suitable crops that could fulfil national biofuel demands at even negligib feedstock production be delayed until such the Ministry is proposing that rural empowerment through biofuel and processing technologies. Currently sweet time as the country has identified and tested suitable crops ion is suited to small-scale and is a dryland sorghum is a preferred candidate for rural farmers as its product crop, intensive research and testing has to be crop, but with little or no previous national experience with this they are assured of its economic viability carried out to ensure that should it be introduced to rural farmers, is that it can provide both food and fuel and availability of extension support. An advantage of sweet sorghum 22 December 2009 - National Biofuels Dev elopment Action Plan as its grain can be harvested for use as food and its stalk processed for its carbohydrate potentially offers a win win situation and is increa and sugar. It singly being used in regional biofuel projects. The Ministry is cognisant of the route taken by the sugar industry when it first began in the 1950s. small, built institutional and legislative capacit It started y, identified and created markets and the logistic s to move and sell its product, exploited favourable agro-ecologi cal conditions to expand production and finally began to integrate small-holder farmers to produce feedst ock for its processing facilities. All the time, in association With South African research institutions, it improv ed its cane varieties, improved its land manag ement practices, optimised the use of inputs, improved its water utilisation efficiency and improved its processing technologies. During the formulation of the NBDS, stakeholders strongly voiced their concerns over the use of land biofuel crops while the country is trapped in a for vicious cycle of food insecurity, poverty and the increasing impacts of climate change affecting all facets of econom ic development. The Ministry of Agriculture was concerned that there was not enough land availab le to produce both food and fuel particularly at suggested in the NBDS (70,000 to 100,000 Ha). Interna scales tional development agencies operating in Swazil and also expressed a concern that the production of biofuel crops using rural farmers was inappropriate given severe challenges the same farmers faced in produc the ing food crops that has resulted in such agencies providing emergency food relief to hundreds of thousands of Swazis over many years. The Ministry is also aware of the importance of a well functioning institutional and legislative environment that not only supports biofuel developments but also promotes them. A conducive institutional and legislative framework, as articulated in the NBDS, is viewed by stakeho lders as being vital to ensure a sustainable and economically rewarding biofuel sector that meets the core objectives of the country's economic development plans, its environmental commitments and its commit ment to poverty alleviation. Cognisant of these concerns, the Ministry of Natural Resour ces and Energy, the main driver for the NBDS, took a decision to focus biofuel development on existing technol ogies that have a proven economic and technical viability and exploit the country's existing position of strength in sugar production. As has been described in early chapters, biofuels are derived from organic matter principally plants, that are grown and processed to extract useable oils or liquids that can be blended with petrol or diesel with little or no change in engine performance but with environmental advanta ges with a reduction in pollutants entering the atmosphere. The types of crops suited for this purpose have been describ ed in early chapters and all are considered suitable for Swaziland's agro-ecological environment. However, the NBDS identified that such crops should be grown by rural farmers on small plots feeding bigger growers and processors that in turn refine the oils to established quality standards for blending by national oil companies. Stakeholders identified that the production of any of the identified crops would require detailed land suitability assessments, farmer capacity building, improv ements in existing extension service activities, funding to secure production inputs and research on crop agrono my and husbandry to ensure consistent yields. A review of the different production systems and scales by the Ministry identified that the discrepancies between small-sale and large-scale production in land take, vields, costs, skills and logistics is significant and that capacity to address these major challenges to uplift rural farmers to levels associated with commercialised biofuel feedstock production would take lots of time and resource s. The Ministry acknowledged that there are major differences in the ability of biofuel feedstock production to achieve significant levels of rural empowerment product ion whilst at the same time provide the feedstock at economic prices. 23 els Development Action Plan December 2009 - National Biofu negative biofuels and detaching from ess ener gy secu rity thro ugh production and use of 1. To addr for fossil fuels. developments in the market tion of strength and experience. capacity slowly and from a posi 2. To build biofuel production the operation of the biofuel and rural dev elo pme nt thro ugh close and harmonious 3. To enhance agricultural sectors. gas overall reduction of greenhouse erns through contributing to the 4. To address environmental conc ate change. emissions and helping to reduce clim lop new export markets and ote expor t deve lopm ent thro ugh providing opportunities to deve u . To prom improving the trade balance. objectives: The NBDAP has the following key k 1. Create an enabling legislative framewor 2. Create a national Biofuels Authority of biofuels, feedstocks and blending 3. Implement a phased development er of outcomes and lead to or will coincide with a numb Achievement of the Action Plan Objectives will benefits: ate biofuel feedstock production, and regulations that permit and regul 1. A new or revised suite of laws processing, blending and use; developments in the country; ituti on with an overa ll mand ate to manage and coordinate all biofuel 2. Ainst the country; and its use in all petrol imported into 3. The rapid introduction of bioethanol suitable alternative feedstock programme that successfully introduces 4. A crop research and development options to rural farmers; e responsibilities of ity to implement and manage the divers 5. Improved technical and logistical capac EÉ biofuel production and use; op the infrastructure required to that satisfy private investors to devel 6. Sustainable financial mechanisms meet national biofuel requirements; and international standards and biofuel production network that meets 7. An environmentally sustainable expectations.

3.2.3 THE FOUR OFUEL PILLARS was formulated. or building blocks around which the strategy The NBDS presented the four essential elements Pillars: The NBDS referred to these as the four Biofuels Arrangements pillar 1: Adequate Institutional and Legal and identifying the human, institutional and systemic capacity Important factors in this process are developing provisions for supportive legislation. pillar 2: Sustainable Biofuel Feedstock Production utilization of land and marketing of feedstock, based on rational This pillar covers the sustainable production land degradation. The ts on biological diversity and addressing and water, whilst minimizing adverse impac r participation. feedstock production will involve smallholde , Marketing and Trade pillar 3: Sustainable Biofuels Production on sound economic trade biofuels in a sustainable manner based The principle of this pillar is to produce and and financial management. 20 December 2009 - National Biof uels Development Action Plan 4 HE NATIONAL BIOFUELS DEVELOPMENT ACTION PLAN This Action Plan provides the impl ementing methodology that trans lates the NBDS into more focused defined activities. and * — Oil price peaked at $149 per barrel in summer 2008, now less than half that in 2009 * — Biofuels were linked to the world food-price crisis (perhaps unfairly...) and countries were advised to consider the implications on food secur ity before embarking on large-scale biofuel projects * - Biofuels remain uneconomical in all contexts except Brazil at current oil prices o USoverbuilt for ethanol - leading to huge industry shakeout o Palmoil and other food oils remain too expensive for use in biodiesel © Other biodiesel feedstocks failed to deliv er on yields (jatropha) o Brazil's success comes after a deliberate 30 year effort to foster the industry * — Despite large investment, biofuels in Africa still remains a nascent industry prospects and a mixed social/environm with uncertain economic ental legacy ry of Natural Resources and Energy, hereinafter referred to as the Ministry, global biofuels “boom” has since retre acknowledges that the ated to a phase of cautious and infor med development. 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The cost of implementing this Action Plan [ B == | Recurrent H Total ‘ W Year of ‘ Fixed Cost Step Costs | | l cost ‘ 1 | |\ - |‘ “ E650,000.00 E650,000.00 1: Create the Legislative Framework i 2010 I | Fep W E2,860,000.00 E2,470,000.00 ‘ E5,330,000.00 run the Swaziland ‘ 2011 ‘ Step 2: Establish and | | l Biofuels Authority } | I | J‘ W E1,430,000.00 \ N E1,430,000.00 ’:{ep 3, Phase 1: Feedstocks (upstream) l 2012- | 2015 ‘ ! | | E45,200,000.00 | step 3, Phase 2: Production & Markets | 2013- ‘ £45,200,000.00 \ (downstream) |20 | | | W E1,510,000.00 E1,510,000.00 Rep 3, Phase 3: Sustainability and Rural ‘ 2014- “ ‘ Empowerment ! L l l E51,650,000.00 l E2,470,000.00 TOTAL T E A Africa. The impacts on Land, Food and Forests. African Biodiversity Network, 2007. Agrofuels in ting in Market in Swaziland, prepared by Agra CEAS Consul Agra CEAS/UNDP (2008), Study of the Biofuels conjunction with F.O.Licht. 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