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Biofuel developments in Mozambique. Update
and analysis of policy, potential and reality
Marc Schut
a,n
, Maja Slingerland
b
, Anna Locke
c
a
Communication and Innovation Studies, Wageningen University and Research Centre, P.O. Box 8130, 6700 EW Wageningen, The Netherlands
b
Plant Production Systems Group, Wageningen University and Research Centre, P.O. Box 430, 6700 AK Wageningen, The Netherlands
c
Ministry of Agriculture, Mozambique, The Cedars, Gravel Path, Berkhamsted HP4 2PJ, United Kingdom
article info
Article history:
Received 12 February 2010
Accepted 23 April 2010
Keywords:
Biofuels
Development
Mozambique
abstract
Climate change, rising oil prices and concerns about future energy supplies have contributed to a
growing interest in using biomass for energy purposes. Several studies have highlighted the biophysical
potential of biofuel production on the African continent, and analysts see Mozambique as one of the
most promising African countries. Favorable growing conditions and the availability of land, water and
labor are mentioned as major drivers behind this potential. Moreover, the potential of biofuel
production to generate socio-economic benefits is reflected in the government’s policy objectives
for the development of the sector, such as reducing fuel import dependency and creating rural
employment. This article provides an overview of biofuel developments in Mozambique and explores to
what extent reality matches the suggested potential in the country.
We conclude that biofuel developments mainly take place in areas near good infrastructure,
processing and storage facilities, where there is (skilled) labor available, and access to services and
goods. Moreover, our analysis shows the need to timely harmonize current trends in biofuel
developments with the government’s policy objectives as the majority of existing and planned projects
are not focusing on remote rural areas, and – in absence of domestic markets – principally target
external markets.
&2010 Elsevier Ltd. All rights reserved.
1. Introduction
Increases in the price of fossil fuels, and growing concerns
regarding their finite availability, use and impacts (including
climate change) have driven the demand of biomass for energy
purposes worldwide (Commission of the European Communities,
2006; van Dam et al., 2008, 750). Biofuels are perceived to be a
good alternative to fossil fuels and ‘a pathway out of poverty’ for
developing countries. Biofuels may provide new incentives for
investments in agricultural research and development, offer
farmers a new source of income (Smeets et al., 2007, 103–104),
and stimulate linkages to input and food markets that currently
do not exist (FAO, 2008b). On the other hand, concerns raised in
the food-fuel-feed debate provide a good example of how biofuel
production might lead to competing claims on land, water, labor,
and other resources.
Like many other countries, Mozambique has explored the
potential for renewable energy options to meet its energy needs
(Jumbe et al., 2009). There is a growing interest in the production
of biomass for biofuels, and large-scale, mainly foreign invest-
ments have been made. Evidence of Mozambique’s biophysical
suitability for biofuel feedstocks exists with the long-term
presence of sugarcane plantations in different parts of the
country. As the first biofuel projects are becoming tangible, there
is a need to monitor and analyze the factors that are driving
the direction of biofuel developments in Mozambique; exploring
to what extent reality matches the suggested potential in
the country.
2. Background on Mozambique
Mozambique is one of the fastest growing economies in sub-
Saharan Africa, with a growth of around 7% per annum since the
early 1990s (World Bank, 2008). Although poverty rates had
dropped from 69% in 1997 to 54% in 2003 (Arndt et al., 2008a, 1),
Mozambique is still among the world’s poorest countries. On the
August 2007 U.N. Human Development Index (USAID, 2009b)
it ranked 172 out of 182 countries, the lowest among the 14
Southern African Development Community (SADC). Average
income levels are low, with a GDP per capita of US$364 in 2007
(World Bank, 2008). The country has approximately 21.4 million
ARTICLE IN PRESS
Contents lists available at ScienceDirect
journal homepage: www.elsevier.com/locate/enpol
Energy Policy
0301-4215/$ - see front matter &2010 Elsevier Ltd. All rights reserved.
doi:10.1016/j.enpol.2010.04.048
n
Corresponding author. Tel.: +31 317 484635; fax: +31 317 486094.
E-mail addresses: marc.schut@wur.nl (M. Schut), maja.slingerland@wur.nl
(M. Slingerland), anna.locke09@gmail.com (A. Locke).
Energy Policy 38 (2010) 5151–5165
ARTICLE IN PRESS
inhabitants with an average life expectancy of 42 years at birth
(World Bank, 2008). Prevalence of malnourishment in the total
population was 44% between 2002 and 2004 (FAO, 2008a, 17).
For 2007, the HDI indicated adult literacy rates of 44.4% for the
population of 15 years and above (UNDP, 2009).
Despite its relatively high rates of economic growth, Mozam-
bique still faces widespread poverty which is claimed to be the
result of historical factors including the Portuguese colonization
and armed conflicts that uprooted social networks and destroyed
most of Mozambique’s commercial and transport infrastructure,
educational and health systems. Moreover, the country is vulner-
able to natural disasters (floods and droughts); is facing limited
and uneven market development; rural–urban differentiation; and
socio-economic differentiation in relation to control and access to
assets (particularly land). According to De Matteis et al. (2006, 7),
35% of the population is highly vulnerable to food insecurity,
which besides food availability is believed to be a result of the
ineffective access, storage and distribution of food (cf. Arndt et al.,
2008b; Batidzirai et al., 2006, 55; USAID, 2009a). Despite having
much more propitious agro-climatic conditions, vulnerability to
chronic food insecurity is highest in the Northern provinces.
Mozambique stretches 2500 km along the coast of southeast
sub-Saharan Africa and has a land area of 799,390 km
2
(PARPA II,
2006). Of this land area, 36 million ha are arable, of which
approximately 10% is under cultivation (FAO, 2007). Because of
the country’s fertile lands and favorable climate, Mozambique is
attractive for agriculture, which employs 80% of the estimated 8.8
million labor force (African Development Bank, 2008,3;Econergy,
2008, ES4). The remaining 20% is involved in the industrial,
transport, communication and service sectors (World Bank, 2009).
As Mozambique is 100% dependent on oil imports (FAO,
2008a, 17), a considerable and increasing amount of the total GDP
is being spent on fuel and energy; 10% of the total value of
imports in 1997, 15% in 2006 and 17% in 2007 (World Bank, 2008),
which explains the government’s interest in exploring alternative
energy sources, such as biofuels.
3. Biofuel time-line in Mozambique
The biofuel discussion in Mozambique became prominent in
2004. During the election campaign, the government encouraged
Mozambican farmers to produce Jatropha on all unused, marginal
soils so Mozambique could become an oil exporting country
instead of being wholly dependent on oil imports. The govern-
ment promised that: ‘‘Biofuels will not displace Mozambican
farmers from their lands, and that government policy would
require the use of underutilized or empty lands, would avoid
using lands allocated for food production, and that Mozambique
will refine its own raw materials.’’ (Frontier Markets, 2008). The
initial idea was that 5 ha of Jatropha were to be planted in each of
Mozambique’s 128 districts. The Mozambican extension service
started sourcing Jatropha seeds, mainly from Malawi. Most of the
seeds were of poor quality; they had been stored for a long time
and often under adverse conditions, resulting in low germination
rates (TechnoServe and ICRAF/IIAM, 2006, 18). Apart from
distributing the seed, there was lack of real follow-up, hence crop
maintenance was neglected, and many plants died. The few
farmers who produced Jatropha seeds did not know what to do
with them, as organized markets and supply chains were absent.
Nevertheless, the promotion of biofuels by the Mozambican
government had by that time attracted numerous private investors
as well as some biofuel-related development projects. Plantations
of Jatropha were established with only limited information
available regarding seed varieties, good agronomic practices,
production systems, markets and scale of operations. In addition,
the belief that Jatropha hardly requires nutrients for its growth and
is drought resistant stimulated investments on marginal land,
which later turned out to be unsuitable for growing Jatropha.
While interest in Jatropha as a ‘miracle crop’ spearheaded
the political promotion of biofuels, there was also significant
private sector and government interest in the production of
ethanol. The principal feedstock considered was sugarcane,
although an increasing level of interest began to be shown in
sweet sorghum over the last 2 years.
Concerns about potential pressure on land, water, food produc-
tion and lack of control over this process resulted in an intense dis-
cussion between government, private sector, NGOs and academics.
As a result, large-scale land-requests were frozen between October
2007 and May 2008, while the government undertook agro-
ecological land zoning. The first biofuel project in Mozambique
was approved in October 2007; since then, three more large-scale
projects have been formally approved by the government. In March
2009, the Mozambican government approved a national policy and
strategy for biofuels. In December 2009, the government voided the
contract of one of the approved companies, as they failed to comply
with their contractual obligations.
4. Theoretical framework and methodology
Over the last years, several studies have highlighted the
(biophysical) potential of biofuel production on the African
continent (Batidzirai et al., 2006; Diaz-Chavez and Jamieson,
2008; Smeets et al., 2007). Mozambique is seen by analysts as one
of the most promising African countries for biofuel production, as
it has abundant and unexploited land and water resources. These
projections have provided strong arguments for the promotion of
biofuel production in Mozambique. Although we acknowledge the
importance of studies on biophysical potential, we believe there
are other drivers that determine how and where biofuel
production in Mozambique could be successful. Investment
theory explicitly studies the relative importance of specific
biophysical, socio-economic and legal factors that guide invest-
ment location decisions (Davidson, 1980; Wheeler and Mody,
1992). As these factors are sector dependent (Wheeler and Mody,
1992), and biofuels form an emerging sector, it is important to
understand and analyze the variables which are dominantly
driving the direction of biofuel developments in countries like
Mozambique. Moreover, mapping the current biofuel develop-
ments vis-
a-vis long-term policy objectives for promoting
biofuels, allows for the timely and adequate development and
implementation of policy tools to harmonize investor and
government objectives.
The objective of this paper is to integrate, analyze and visualize
knowledge from different disciplines to show how dynamics
between biophysical potential, policy and legal frameworks, and
socio-economic factors need to be understood to explain current
biofuel developments in Mozambique (Fig. 1). By doing so, we
hope to complement existing studies and provide additional
insight in the complexities that are driving the direction of biofuel
developments in Mozambique. Our efforts to integrate knowledge
from different disciplines in the form of maps were inspired by
the idea that such visualisations could serve as boundary objects
(cf. Ewenstein and Whyte, 2009).
To reach our objectives, we present various forms of data.
Firstly, we conducted a literature study to analyze multiple
sources of secondary data; scientific reports and papers on biofuel
potential, biofuel-related policy documents, and media reports
related to biofuel developments in Mozambique. Secondly, we
analyzed investment data in collaboration with the Agriculture
Promotion Centre (CEPAGRI) of the Ministry of Agriculture of
M. Schut et al. / Energy Policy 38 (2010) 5151–51655152
ARTICLE IN PRESS
Mozambique. Thirdly, we undertook geographical mapping of
biofuel developments in Mozambique. This inventory includes
the operational biofuel projects and expressions of interest
throughout the country, as well as existing and planned biofuel-
related processing and storage facilities. This data was comple-
mented with information collected from ten field visits to both
commercial and smale-scale biofuel projects, and more than
and 50 interviews with policy-makers, investors, farmers, NGO
representatives and researchers.
5. Policy framework for biofuel developments
This section identifies and discusses the (inter)national
policies, agreements and legislation related to biofuel production,
processing and trade in Mozambique. Subsequently we look at
how incentives and restrictions established in these policies could
influence the development of the biofuel sector in Mozambique.
5.1. Trade agreements
Mozambique is a signatory to several trade agreements that
establish the terms and conditions for access of Mozambique’s
potential biofuel production to key regional and international
markets, namely the EU, the US and SADC (cf. Rebello Da Silva and
Da Silva Garrilho, 2003, 84–85).
Access to the EU market for biofuels is granted under two key
agreements: (1) the Cotonou Protocol between the EU and
African, Caribbean and Pacific countries, which is in the process
of being transformed into a regional economic partnership
agreement (EPA) between the EU and SADC and (2) the ‘Every-
thing But Arms’ arrangement which grants duty-free access to the
EU market for all goods (except arms) for least developed
countries. As a result, duty-free access is provided for ethanol,
biodiesel, and vegetable oil exports from Mozambique to the EU.
However, only ethanol and biodiesel produced in compliance
with the EC’s recently published sustainability criteria will be
eligible for the market incentives for biofuels sold on the EU
market.
Mozambique also has duty-free access to the US market under
the Generalized System of Preferences (GSP) which grants
reduced duty or duty-free access to developing countries. This
was extended by the African Growth and Opportunity Act (AGOA)
in 2000, a United States Trade Act that significantly enhances US
market access for (currently) 39 sub-Saharan African countries,
including Mozambique.
The SADC Trade Protocol is an agreement between eleven
SADC members
1
aimed at promoting regional trade in the bloc.
Under this agreement, tariffs on intra-regional trade of certain
goods have been eliminated or substantially reduced. Tariffs on
so-called ‘sensitive goods’ are to be eliminated by 2012, although
final details remain under discussion, and Mozambique has until
2015 to comply. When fully implemented, the protocol will give
Mozambican products duty-free access to a market of over 200
million people with a GDP of US$275 billion, with reciprocal
treatment for the goods from the other members (Embassy of the
United States, 2006). However, in the case of biofuels, the
final size of the regional market, and Mozambique’s access
to it, will depend on the establishment of harmonized fuel
standards and blending mandates or authorization in the other
member countries.
5.2. Land law
According to the Constitution, all natural resources in
Mozambique, including land, belong to the state. Land acquisition
procedures are governed by the Land Law (Law No. 19/97 of 1
October 1997) and its Regulation (Decree No. 66/98 of 8
December 1998) and culminate in the attribution of a 50-year
renewable lease in the form of a land title or Direito de Uso e
Aproveitamento dos Terras (DUAT). Article 3 of the Land Law
states that: ‘‘Land is the property of the State and cannot be sold
or otherwise alienated, mortgaged or encumbered’’, and estab-
lishes three means of acquiring land:
1. through existing occupation established by customary norms
and practices (Land Law Article 12 and Regulation of the Land
Law Article 9). This includes used and unused (fallow and
common) lands that a rural household needs to have access to
and control over for a certain period of time;
2. through existing occupation ‘in good faith’ (Land Law Article
12 and Regulation of the Land Law Article 10) when people
have occupied the land for at least ten years without challenge,
which aims to protect the rights of displaced persons that
settled in lands during the civil war that were formerly owned
by colonial powers; and
3. through a formal request to the State (Land Law Article 12 and
Regulation of the Land Law Article 11).
Article 13 of the Land Law and Article 27 of the Regulation of
the Land Law state that formal requests to the State must be
accompanied by a community consultation, which seeks to ensure
that community rights are taken into account and provides an
opportunity for communities to negotiate some element of
compensation or benefit with investors. The Land Law (Article
11) and its Regulation (Article 18) require that foreigners have an
approved investment project in order to apply for a DUAT.
Land-requests submitted to the government are evaluated
initially by the relevant government departments that oversee the
activity at provincial level (Regulation of the Land Law Article 24
(2) and Article 26 (1)). When the area requested is greater than
1000 ha and therefore no longer the remit of the Provincial
Governor alone, evaluations are requested from the relevant
government departments at national level, and requests have to
be authorized by the Minister of Agriculture (Regulation of the
Land Law Article 26 (3)). Where proposals involve areas of more
than 10,000 has or investment values greater than US$100
million, they have to be submitted to the Economic Council
Fig. 1. Framework to analyze the drivers of biofuel developments in Mozambique.
1
Botswana, Lesotho, Malawi, Mauritius, Mozambique, Namibia, South Africa,
Swaziland, Tanzania, Zambia and Zimbabwe
M. Schut et al. / Energy Policy 38 (2010) 5151–5165 5153
ARTICLE IN PRESS
(comprising the key Ministries involved in the social and
economic sector) and Council of Ministers (Land Law Article 22
(3)) for approval.
2
Provisional DUATs are attributed for two years
to foreigners and five years to nationals, after which definitive
DUATs are allocated, subject to review by the government that
production plans have been fulfilled.
5.3. Investment law
The basic legal framework for investment in Mozambique is
established by Law No. 3/93 (the Investment Law of 1993). The
Regulation, approved by Decree No. 14/93 in 1993 and subse-
quently altered by Decree No. 36/95 in 1995, defines the
procedures for project evaluation. The government’s Investment
Promotion Centre (CPI) is responsible for implementing the
legislation. All investment proposals have to be signed off by
the Minister for Planning and Development, which oversees CPI.
Government approval of an investment project is necessary to
gain access to certain fiscal benefits provided under the Code of
Fiscal Benefits (Law No. 4/2009 of 12 January, 2009), which
altered Decree No. 16/2002 of 27 June 2002, subsequent to the
original Code of Fiscal Benefits approved by Decree No. 12/93 of
21 July 1993. The Code of Fiscal Benefits is expressed in a legal
agreement between the government and the investor. It estab-
lishes incentives for investors to locate production in less-
developed provinces. Two location-specific incentives are
granted:
Investment tax credits for five years are provided, equal to 5%
of total realized investment in Maputo City province and 10%
for other provinces. A greater distinction is made in relation to
designated ‘‘rapid development zones’’, which are privy to a
tax credit equivalent to 20% of total realized investment. These
are geographical areas which have ‘‘great natural resource
potential but which are lacking in infrastructure and have a
weak level of economic activity’’ (Code of Fiscal Benefits).
These include the Zambeze river valley, which covers all
districts in Tete province, most districts in Zambe
´zia and Sofala
provinces and four districts in Manica province, Niassa
province and Nacala district.
Deduction of expenditure on infrastructure undertaken by the
investor, equal to 110% of expenditure for projects located in
Maputo City province and 120% of expenditure for projects in
other provinces. No additional benefit is granted for the rapid
development zones.
In September 2009, the government of Mozambique announced
its plans to create special duty free industrial areas in the city of
Nacala-Porto, Nampula province. The objective is to promote
social and economic development of some provinces in the centre
and north of the country, namely Zambe
´zia, Tete, Niassa and Cabo
Delgado (Macauhub, 2009c). This is most relevant for processing
activities, which are heavily dependent on the use of imported
goods and machinery.
5.4. Linking land and investment
Until recently, the process for evaluating land title requests
and the evaluation of investment proposals linked to these
requests were quite separate. The land title process concentrated
mainly on the administrative steps laid down by the Land Law
and its Regulation, while investment proposals were evaluated
by CPI.
As a consequence of the increase in expressions of interest for
large tracts of land, the government made two changes to the
project review procedure. Firstly, it tightened the link between
the processes for awarding land titles and approving investment
proposals. Whereas previously a proposal for a large-scale
investment project could be approved by the Council of Ministers
independently of the land process, from 2007, investment and
land-requests had to be submitted together to the Council of
Ministers, with the two processes being launched simultaneously
(Circular No. 009/DNTF/07 of 16 October 2007). In addition, the
Provincial Governor had to submit an evaluation of both the land
request and investment project.
Secondly, at the end of 2008, the Council of Ministers approved
the introduction of Investment Guidelines (Resolution 70/2008).
These are applied to large-scale projects, defined as more than
10,000 ha, establishing the type of information required for the
presentation of projects to the Council of Ministers for their
analysis. This now represents the legal basis for the evaluation of
large-scale agrarian projects, including many of the biofuels
projects submitted to the government.
5.5. National biofuel policy and strategy (NBPS)
On 21 May 2009 the Mozambican government published a
national biofuels policy and strategy (Resolution 22/2009), partly
based on a study on the technical, economic, social and
environmental feasibility of biofuel production in Mozambique
(Econergy, 2008). The Resolution, approved by the Council of
Ministers, aims to contribute to energy security and sustainable
socio-economic development by exploiting agro-energetic
resources through stimulating the diversification of the energy
matrix, contributing to the well-being of the population and
promoting socio-economic development, particularly in rural
areas (Government of Mozambique, 2009, 15).
The policy and strategy describes several measures intended to
promote biofuel production while limiting potential negative
impacts on society and the environment. Some of the important
political and strategic pillars are: proposed limits on land
allocation to biofuel production on the basis of suitable agro-
climatic regions through land zoning; approval of selected
feedstocks, namely sugarcane and sweet sorghum for ethanol,
and coconut and Jatropha for biodiesel; the use of sustainability
criteria to select investment projects and allocate land titles; the
creation of a domestic market for biofuels via blending mandates,
which will be gradually phased in at increasing levels; increase
export to create tax-revenues and foreign currency; the promo-
tion of regional markets for biofuels; and the establishment of
tariffs for the purchase of electricity produced from biomass,
particularly cogeneration of electricity as a by-product of the
ethanol production process.
While the biofuels policy and strategy provides a general
framework and guidelines for the development of the sector,
further legislation in the form of Regulations will provide the
necessary detail on the pricing mechanism for domestic sales of
biofuels; the Biofuels Purchasing Programme, which will probably
be based on an auctioning system; the level of fiscal incentives
provided to the sector, in the form of substantial discounts on the
existing fuel tax (TSC); the levels of blending mandates; and the
level of tariffs to be established for cogenerated electricity
produced from bagasse.
2
Article 15 of the Regulation of the Investment Law. This article states that
agricultural projects of over 5000 ha and forestry and livestock projects of over
10,000 ha should be submitted to the Council of Ministers. However, Article 22 (3)
of the Land Law, which stipulates that requests for over 10,000 should go to the
Council of Ministers seems to have taken precedence.
M. Schut et al. / Energy Policy 38 (2010) 5151–51655154
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The NBPS states that: ‘‘With modest expectations of biofuel
expansion to 450,000 ha, combined with compulsory blending
of E10 (10% of ethanol with 90% of gasoline) and B5 (5% of
biodiesel with 95% of fossil diesel), the biofuel industry is
expected to generate substantial macroeconomic benefits,
including the reduction of oil imports and the creation of
approximately 150,000 direct and indirect new jobs’’ (Govern-
ment of Mozambique, 2009, 17–18).
6. Mozambique’s biophysical potential
Mozambique has unexploited natural resources, favorable
agricultural conditions and abundant labor that give it enormous
economic potential for overcoming the present state of under-
development (Diao et al., 2007; Rebello Da Silva and Da Silva
Garrilho, 2003, 65). The most recent exercise that summarizes
Mozambique’s biophysical potential on a national scale is the
agro-ecological zoning carried out between October 2007 and
May 2008. The zoning was coordinated by an inter-ministerial
working group in which the National Institute of Agrarian
Research (IIAM) identified the agro-climatic suitability of different
areas, and the National Directorate for Land and Forestry (DNTF)
assessed land availability. The zoning was carried out at a scale of
1:1,000,000, capturing contiguous areas of more than 1000 ha.
Underpinning this exercise are a range of existing studies,
including a national forestry inventory, soil and climate data
and maps of agro-climatic suitability for different crops, including
several potential biofuel feedstocks such as sugarcane and
Jatropha. Land availability was determined by excluding existing
DUATs (community or private), mining areas, projects submitted
for approval, and projects ‘in the pipeline’.
The land zoning exercise identified 6,966,030 million ha as
being available for large-scale agricultural, forestry and livestock
activities (IIAM and DNTF, 2008). Table 1 shows the distribution
of available land per province (excluding Maputo City province).
Table 1 also includes work by Batidzirai et al. (2006) who
studied Mozambique’s annual biomass production potential for
2015 based on climate and soil characteristics. This study’s main
conclusion was that Mozambique has an estimated annual
biomass production potential for 2015 of 6670 PJ using surplus
land under moderate agricultural technological inputs.
While the land zoning exercise provided an important basis for
guiding the government in its land allocation decisions, several
concerns exist in relation to its reliability and usefulness:
The current scale is too large to allow for more than a broad
overview of land availability.
Most of the soil suitability data were out-dated and analysis of
agro-climatic suitability was based on rainfall data from the
1980 s.
The zoning only considered water availability from rainfall,
excluding opportunities for irrigated agriculture near rivers.
In addition, the accuracy of the land availability data has been
called into question. A random locality in Mozambique identified
as available based on 1 km
2
satellite databases turned out to be
extensively utilized and inhabited when viewed at the finer
resolution provided by Google Earth (Watson, 2008, 13).
A more accurate land zoning exercise is currently being carried
out on a scale of 1:250,000.
7. Social and economic factors
This section describes and discusses the social and economic
factors that influence biofuel developments in Mozambique. It
focuses on the availability and quality of labor force, and access to
infrastructure and services.
A rough indicator of potential labor force is population density
per province. Mozambique has an average population density of
20.1 people per km
2
(WFP, 2009). In 2000, population rates per
km
2
were highest for Nampula, Maputo and Zambe
´zia provinces.
Population density was lowest found in Niassa and Tete provinces
(Table 2).
Quality of labor can be expressed in literacy rates, Net
Enrolment Rates (NER), and achievement levels of formal
education. According to the Mozambican Household Survey
2002–2003, adult literacy rates are around 50%
3
. There is evidence
of large differences in literacy rates between rural households
(27%) and urban households (66%) (Castanheira Bilale, 2007, 78).
Manica, Maputo, and Maputo City province achieved much higher
literacy levels than the national average while in most other
provinces, adult literacy rates were below the average, with Cabo
Delgado and Nampula at the lower end. In rural areas, on average
80.7% of adult residents did not have any formal education
(Castanheira Bilale, 2007, 82). In Nampula, Zambe
´zia, Cabo
Delgado and Tete between 70% and 82% of the population had
no formal education, and between 10% and 20% had only achieved
primary education. Looking at current school enrolment figures
(NER) we found that around 80% of children between 6 and 18
years of age are enrolled at school. The difference between
Table 1
Available land per province according to the agro-ecological zoning exercise, and estimated annual biomass production potentials.
Agro-ecological zoning exercise (IIAM and
DNTF, 2008)
Annual biomass production potential for 2015 based on Batidzirai
et al. (2006, 61)
Province Total available
land (ha)
% of total
available land
Annual biomass production
potentials (in PJ for 2015)
% of total biomass
production potential
Zambe
´zia 1,365,300 19.6 883 13.2
Niassa 1,220,400 17.5 1,176 17.6
Inhambane 1,071,660 15.4 113 1.7
Gaza 866,780 12.4 234 3.5
Nampula 709,160 10.2 1,144 17.2
Tete 661,730 9.5 576 8.6
Sofala 408,650 5.9 545 8.2
Manica 381,950 5.5 642 9.6
Cabo Delgado 269,400 3.9 1,286 19.3
Maputo 11,000 0.2 71 1.1
Total 6,966,030 100.0 6,670 100.0
3
HDI for 2007 indicated average literacy rates 44.4% for population above 15
years, but of this data specification per province was not available.
M. Schut et al. / Energy Policy 38 (2010) 5151–5165 5155
ARTICLE IN PRESS
provinces was still present, with Maputo, Maputo City, Gaza,
Inhambane and Manica provinces amongst the highest, and
Nampula, Tete, Sofala, Cabo Delgado, Niassa and Zambe
´zia
provinces at the lower end (Table 2).
Portuguese colonization and armed conflicts destroyed and
uprooted most of Mozambique’s social and physical infrastructure
(Arndt et al., 2000; Newitt, 1995, 570). Cooperatives and unions
were systematically destroyed and service provision, such as
access to agricultural inputs and extension, disappeared. Despite
the sustained recovery since peace was reached in 1992 and
efforts to improve infrastructure and distribution networks,
access remains poor and patchy between provinces. In 2002, the
highest level of communities with access to improved seeds,
fertilizers and pesticides were found in Manica, Sofala and
Inhambane provinces, while Tete was the lowest (TIA 2002 in
Coughlin, 2006, 13). Access to extension services was low in every
province with an average of 1.3 extension workers per 10,000
inhabitants (MADER 2004 in Coughlin, 2006, 32).
Despite recent investments in roads, the density of the
road network is the lowest in southern Africa, at only
32 kilometers per km
2
(World Bank, 2006, xvi). ‘‘Under the
Portuguese colonial government, roads and railways were mainly
laid to facilitate the exportation of agricultural produce from
Malawi, Zambia and Zimbabwe’’ (Coughlin, 2006, 6). The deep-sea
ports of Maputo, Beira and Nacala are still used by Mozambique’s
neighboring countries to export and import a substantial part of
their commodities (Meeuws, 2004, 5). These ports have (fuel)
storage facilities and are well accessible by road. Poor north–
south infrastructure makes transport by road inside the country
more costly than exporting from the nearest port (cf. Coughlin,
2006,6;World Bank, 2005, 60).
Efforts to provide electricity to rural Mozambique are mainly
concentrated around urban centers, such as the Beira and Maputo
corridors, and along the coast (OCIN, 2006). There are plans for
building of a 1000 km north–south power line, linking hydro-
electric, coal- and gas-fired power stations in central and northern
Mozambique with the main consuming areas in the south
(EarthTimes, 2009).
8. Reality of biofuel developments in Mozambique
This section presents an overview of the developments in the
biofuel sector that have taken place in Mozambique since 2006,
based on projects formally submitted to the Government of
Mozambique, and an inventory of other implemented projects
and expressions of interest. Given that individual investment
proposals contain sensitive information, we have summarized the
data in such a way that confidentiality is assured. Subsequently
we have added an overview of the existing and planned biofuel-
related infrastructure, such as processing and storage facilities.
We are aware that not all biofuel projects are actually being
implemented at this stage. The objective of our inventory is
therefore not to be speculative, but merely showing the areas
where projects are being developed to provide a basis for further
analysis of what is driving biofuel developments in Mozambique.
8.1. Formally submitted biofuel projects
Up to December 2008, the Government of Mozambique had
officially received 17 biofuel-related investment proposals. Of
these projects, 12 were related to biodiesel production and five to
bioethanol production. The majority of investors originate in
Europe or South Africa, often engaged in partnerships with
Mozambican counterparts. The core business of nearly all
biodiesel projects is growing Jatropha seeds to extract oil for the
production of biodiesel. The bioethanol projects mainly focus on
sugarcane as a feedstock, with some interest in sweet sorghum
and cassava. Some of the projects have ancillary activities, such as
production of seedlings or food production. The biodiesel
investors requested 179,404 ha of land; the bioethanol investors
66,000 ha.
As Table 3 demonstrates, the proposed biodiesel projects
amount to a total investment of US$298 million and the
bioethanol projects US$1003 million. Average investment per
hectare shows that sugarcane production is far more capital
intensive than producing Jatropha, mainly driven by higher
planting density, and costly investments in irrigation systems
and ethanol distilleries. Total employment creation is expected to
Table 2
Population density, literacy rates and Net Enrolment Rates (NER) per province.
Province Population
density
(population per
km
2
) (CAP 1999–
2000 quoted in:
Coughlin, 2006,6)
Literacy rates
(Castanheira
Bilale, 2007,
77) (%)
NER
(Castanheira
Bilale, 2007)
(%)
Maputo City Not included 77 93
Nampula 37.8 32 69
Maputo 35.6 67 94
Zambe
´zia 28.1 40 77
Sofala 19.1 47 71
Cabo Delgado 16.4 28 72
Inhambane 16.4 52 86
Manica 15.6 60 84
Gaza 14.0 53 90
Tete 11.3 45 70
Niassa 6.2 49 74
Average for
Mozambique
20.1 50 80
Table 3
Analysis of the 17 biofuel investment proposals based on collaboration with CEPAGRI.
Bioethanol projects Biodiesel projects Total
# 5 29% 12 71% 17
Land formally requested (ha) 66,000 27% 179,404 73% 245,404
Investment (US$) 1003 million 77% 298 million 23% 1301 million
Average investment per requested hectare (US$) 15,197 1663 5,303
Employment (jobs) Between 8925 and 11,956 26–28% Between 25,093 and 30,264 74–72% Between 34,018 and 42,220
Employment per requested ha Between 0.14 and 0.18 Between 0.14 and 0.17 Between 0.14 and 0.17
Main crop Sugarcane Jatropha
Other crops Sweet Sorghum, Cassava –
Estimated yields 113.3 t cane ha
1
2.64 t Jatropha oil ha
1
Market Mostly EU Mostly EU
M. Schut et al. / Energy Policy 38 (2010) 5151–51655156
ARTICLE IN PRESS
be between 34,018 and 42,220 jobs. The available data shows that
the biodiesel projects intend to create between 25,093 and 30,263
employment places (around 73% of total). The bioethanol projects
account for between 8925 and 11,956 jobs (around 27% of the
total) mainly depending on whether cane will be harvested
manually or mechanically. Average employment per hectare does
not differ much between the bioethanol and biodiesel sector. For
the whole biofuel sector, the estimated employment potential is
between 0.14 and 0.17 jobs ha
1
.
The 12 biodiesel projects aim at an average production of
2.64 t Jatropha oil ha
1
yr
1
. Research shows that yields depend
highly on the growing conditions of the crop. Recent studies
indicate a maximum of 2.72 t Jatropha oil ha
1
yr
1
, calculated
on the basis of full radiation, high temperatures and year-round
canopy cover, no limitations due to lack of water or nutrients,
and the absence of plagues and diseases (Jongschaap et al., 2007,
28). Achieving these yields in practice will be extremely difficult,
if not impossible.
The average expected yields by the three biggest sugarcane
projects are 113.3 t cane ha
-1
. By comparison, the best average
yield for the Mozambican industry over the past five years was
72 t ha
-1
and the best average company yield over the same
period was 87 t ha
-1
(CEPAGRI, 2009). Data from the Brazilian
sugarcane sector shows averages of 77.6 t ha
-1
in 2007 for dry-
land cane (FAOSTAT, 2009).
Most projects intend to supply the domestic and regional
(SADC) markets, as well as targeting the EU and broader
international markets. However, since the EU has announced its
renewable energy targets for 2020 (20% renewables, 10% blending
of biofuels for the transport sector), the European market seems
to be the premium market, where the highest prices will be paid.
Most interviewed investors and experts confirm that initially:
‘‘Most of the ethanol produced in Mozambique will be exported to
the EU’’ (Engineering News/Reuters, 2009).
Dropping fossil-fuel prices and the financial crises have had their
impact on the biofuel sector in Mozambique. In 2009, only five
biofuel-related investment proposals have been received, which is
much lower as compared to the proposals received in 2008.
Table 4 shows the characteristics of the four formally approved
biofuel projects (based on: Allafrica.com, 2007, 2009a;
Engineering News/Reuters, 2009; Noticias August 21, 2009).
In October 2007, the first large-scale bioethanol project was
formally approved. Procana Ltd., with a total investment of
around US$500 million according to Allafrica.com (2007),isa
Mozambican company in which the London-based Bioenergy
Africa Ltd. is the main shareholder. Procana obtained a DUAT
for 30,000 ha for irrigated sugarcane production southeast of
Massingir (Gaza province). In July 2008, Principle Energy Ltd., also
a London-based renewables energy company, was granted access
to 18,000 ha in Dombe (Manica province). Like Procana, Principle
Energy’s main objective is to produce irrigated sugarcane for
bioethanol production. Both projects intend to build on-site
ethanol refineries where the sugarcane can be processed, and
should generate between 7000 and 10,000 jobs, depending
on whether cane is harvested manually or mechanically
(Allafrica.com, 2009b).
On 6 October 2009 one of the major shareholders in Procana,
Bioenergy Africa Ltd., announced a adaptation of investment
policy and change of name. Based on a review of a 23 month
period ending on 31 March 2009, the Directors believed that:
‘‘The global economic climate and current reduced interest in
non-carbon related fuel products will make it difficult for the
Company to raise the necessary financing required under the
Massingir Investment Agreement’’ (BioEnergy Africa Ltd.,
2009b). For the 23 month period under review, BioEnergy Africa
is reporting a pre-tax loss of US$7.7 million (Bioenergy Africa
Ltd, 2009a). The company intends to suspend further material
investment in the Massingir Project. By the end of November
2009, the company’s name and website had already been
changed to Sable Mining Africa Ltd. In December 2009, the
government voided the DUAT of Procana Ltd. because the
company failed to comply with its contractual obligations
(United Press International, 2009).
In August 2009, the Council of Ministers granted land titles to
Enerterra SA and Grown Energy Zambeze Ltd., both in Sofala
province. Enerterra SA is a company with Portuguese and
Mozambican interests, which has been granted 18,920 ha for
the production of Jatropha (Allafrica.com, 2009a). Grown Energy
Zambeze Ltd., which has Mozambican, Asian and South African
shareholders, has been granted 15,000 ha for the cultivation of
sugarcane and sweet sorghum for ethanol production, and energy
generation for the national grid. Grown Energy Zambeze is
planning to construct an on-site ethanol distillery. In addition,
beans and soya will be grown, in combination with livestock
production. The project has budgeted a social fund of US$2.7
million to support education, health, infrastructure and electrifi-
cation of the area (Noticias August 21, 2009).
While the 17 investments proposals aim at creating an average
of between 0.14 and 0.17 jobs ha
1
(Table 3), the estimates of the
four formally approved projects are slightly higher at an average
of between 0.17 and 0.21 jobs ha
1
. This is however, still much
lower compared to government projections of 150,000 new jobs
for 450,000 ha (0.33 new jobs ha
-1
including self-employment for
entrepreneurs) (Government of Mozambique, 2009, 18).
Table 4
Analysis of the four formally approved biofuel projects.
Principle Energy Ltd. Procana Ltd. Enerterra SA Grown Energy Zambeze Ltd. Total
Province Manica Gaza Sofala Sofala
Land (ha) 18,000 30,000 18,920 15,000 81,920
Investment (US$ million) 290 500 53 212 1055
Investment per ha (US$) 16,111 16,667 2801 14,133
Employment (seasonal) 9
>
>
>
=
>
>
>
;
Two projects should generate between
7000 and 10,000 jobs
5000 9
>
>
=
>
>
;
Between 14,163 and 17,163
Employment (permanent)
Mozambican
20 2104
Foreign
534
Total: 5025 Total: 2138
Average jobs per ha 0.15–0.21 0.27 0.14 0.17–0.21
Main crop Sugarcane Sugarcane Jatropha Sugarcane
Production (per year) 212 million litres of
ethanol
298 million litres
of ethanol
No data 100 million litres of ethanol
Market Mostly EU Mostly EU 10% domestically/90% EU 10% domestically/90% EU, USA, Japan
M. Schut et al. / Energy Policy 38 (2010) 5151–5165 5157
ARTICLE IN PRESS
The other investment proposals are under consideration
prior to potential approval, or are in the process of conducting
baseline studies and Environmental and Social Impact Analysis.
From interviews we know that one biodiesel project officially
withdrew from the application procedure (this project, just like
Procana is however included in our analysis of the investment
data). We know that some projects are close to formal approval,
others face difficulties getting their activities financed or are
‘shelved’.
The fact that a project is not formally approved does not mean
that no activities are being undertaken. Some of the projects have
been granted land rights to start experiments and nurseries.
However, fieldwork experiences showed us that some projects
have already started bush-clearing, infrastructure, housing and
plantation activities. We know of at least one biodiesel project
that started operating on land rights transferred from another
company. DUATs are transferrable, meaning that the name of the
DUAT-holder and assets can be sold without effectively having to
get a new DUAT. However, DUATs are linked to specific feedstocks
and production plans, such that investors have to receive
authorization from the government if land acquired in this way
is intended for other use.
Reasons of confidentiality only allowed us to explicitly name
the projects that have been formally approved in Fig. 2. The
map contains 18 dots as one project intends to work at two
different locations.
In Table 5 we compare land requested by the formally
submitted proposals per province with the land availability per
province as was identified through the 2008 agro-ecological
zoning (scale 1:1,000,000). Except for Maputo province, the
requests are still within the amount of land available per
province. In total, investors requested for 3.5% of the total
available land identified during the agro-ecological zoning of 2008.
As our analysis shows, the majority of available land can be
found in the northern provinces of Mozambique; Zambe
´zia,
Niassa, Tete, Nampula and Cabo Delgado, representing
4,225,990 ha or 61% of the total available land. The central and
southern provinces – Manica, Sofala, Inhambane, Gaza and
Maputo – represent the remaining 2,740,040 ha or 39% of the
total 6,966,030 ha. When looking at the formal land-requests by
biofuel investors, we find the opposite: 63% or 154,436 ha of the
total land requested is located in Manica, Sofala, Inhambane, Gaza
and Maputo provinces, and the remaining 90,969 ha (37%) in
Zambe
´zia, Niassa, Tete, Nampula and Cabo Delgado provinces
(Table 6).
8.2. Other implemented biofuel projects and expressions of interest
Besides the investment proposals that were formally sub-
mitted to the Mozambican government, a wide variety of other
biofuel projects are being implemented and explored in
Mozambique. These projects are very heterogeneous, ranging
from large-scale commercial to smallholder development projects
each with their own specific approach, objectives and markets.
Fig. 3 illustrates the geographical spread of the projects,
distinguishing between bioethanol, biodiesel and projects
producing Pure Plant Oil (PPO). The PPO-projects mainly focus on
Fig. 2. Geographical spread of biofuel projects that formally submitted investment proposals to the Government of Mozambique, and the four biofuel projects that have
been officially approved at national level.
M. Schut et al. / Energy Policy 38 (2010) 5151–51655158
ARTICLE IN PRESS
producing Jatropha oil by smallholders for local energy use. The
success of these smallholder projects ranges enormously. Where
some projects are already harvesting, collecting, and pressing
Jatropha seeds, other initiatives have been abandoned by farmers
due to bad performing Jatropha and lack of agronomic management
skills on how to prune, control pests and viruses (Bos et al., 2010).
In line with the formally submitted projects, Fig. 3 demon-
strates a concentration of biofuel activities in the Beira-corridor,
around Quelimane and along the southern coast between Maputo
and Inhambane. The majority of projects focus on Jatropha as
feedstock, either to produce PPO or biodiesel as end-product.
8.3. Existing and planned processing and storage facilities
Mozambique currently has four operating sugar mills;
Marromeu and Mafambisse sugar mills (Sofala province), and
Xinavane and Maragra sugar mills (Maputo province). None of
these sugar mills are currently producing ethanol, but by showing
their location, we seek to indicate which areas potentially provide
access to goods and services related to the emerging biofuel sector
in Mozambique. One of the sugar producers – Tongaat-Hulett
(with shareholding in Mafambisse and Xinavane sugar estates and
mills) – recently expressed their intention to move into the
bioethanol market over the next few years, requiring a mandatory
10% blending regime to kick-start renewable energy programs
(BusinessReport, 2009). There is one operating distillery in
Mozambique in the Bu
´zi region about 50 km from the Beira port.
This distillery, with installed capacity of 3 million l yr
1
, produces
alcohol for beverages and pharmaceutical applications using
molasses as a feedstock (Econergy, 2008, 192).
While no biodiesel was produced prior to 2006, Mozambique
produces oilseeds and has a small vegetable oil industry. The
domestic oilseeds industry is composed of small- and medium-
sized companies whose production is monitored by the Ministry
of Industry and Commerce (MIC) (Econergy, 2008, 130). Eight oil
production facilities are registered with the MIC. In general,
refined oil is processed from raw copra oil. Raw copra oil has two
markets: the domestic soap industry, and export, primarily to
South Africa for the cosmetics industry (Econergy, 2008, 130). The
domestic oil refining industry relies heavily on imported oils to
supplement domestic supply.
There exists an embryonic biodiesel sector in Mozambique,
using coconut oil, and occasionally palm oil as feedstock
(Econergy, 2008, 131–132). As the prices of coconut oil went
up significantly, the opportunity cost of using the oil for
biodiesel rather than sale on the international market was too
high. The most prominent biodiesel project is Ecomoz, in which
Mozambique’s oil company PetroMoc has a 30% share. Ecomoz
started operating in 2007, mainly using coconut oil as feedstock.
The product is refined in Matola, Maputo province. The refinery
has a capacity of 100,000 l day
1
, but limited quantity and
quality of feedstock is preventing this potential from being
achieved. Currently, Ecomoz sells its biodiesel to PetroMoc, using
it in their company’s cars while awaiting approval of the
blending license to sell to the market. Ecomoz is planning to
expand production and use 21,000 ha in Manhic-a district to
produce Jatropha and copra (PetroMoc, 2009)(Fig. 4).
Besides the existing facilities, the Mozambican government is
rehabilitating, expanding and modernizing three PetroMoc sto-
rage facilities in Nacala, Beira and Maputo. A new facility of
95,000 m
3
is constructed in Beira. Storage facilities which are in
study are located in Vandu
´zi Manica, Beira and Maputo/Porto de
Dobela (PetroMoc, 2009). These units are not specifically designed
for biofuels but aim to be versatile and accommodate normal
fossil-fuel, gas, biofuels and all kind of liquid fuels that will be
necessary (personal communication PetroMoc).
Table 5
Land availability (agro-ecological zoning) versus land-request per province (17 formally submitted investment proposals).
Agro-ecological zoning exercise (IIAM and
DNTF, 2008)
Investment proposals formally submitted for approval to Government of Mozambique
Province Total land
availability (ha)
% of total land
available
Formal land-
requests (ha)
% of total formal
land requested
% of land requested compared to
land availability (zoning)
Zambe
´zia 1,365,300 19.6 72,618 30 5.3
Niassa 1,220,400 17.5 1,300 1 0.1
Inhambane 1,071,660 15.4 11,000 4 1.0
Gaza 866,780 12.4 30,138 12 3.5
Nampula 709,160 10.2 15,050 6 2.1
Tete 661,730 9.5 0 0 0.0
Sofala 408,650 5.9 43,920 18 10.7
Manica 381,950 5.5 57,122 23 15.0
Cabo Delgado 269,400 3.9 2,000 1 0.7
Maputo 11,000 0.2 12,256 5 111.4
Total 6,966,030 100.0 245,404 100 3.5
Table 6
Land requested compared to land availability per region.
Agro-ecological land zoning (IIAM and DNTF,
2008)
Investment proposals formally submitted
to Government of Mozambique
Provinces Land identified as
available (ha)
% of total land
available
Requested land
(ha)
% of total land
requested
Maputo, Gaza, Inhambane, Manica and Sofala 2,740,040 39 154,436 63
Tete, Niassa, Cabo Delgado, Zambe
´zia and Nampula 4,225,990 61 90,968 37
Total 6,966,030 245,404
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ARTICLE IN PRESS
Galpbuzi, a consortium made up of Mozambican company
Companhia do Bu
´zi and Portugal’s Galp Energia presented its long
term plans to set up a biofuel refinery in the town of Bu
´zi, in
Sofala province. Mentioning that the project needed an area of
8000 ha, the General Manager explained they are planning to
invest US$140,000, with part of production expected to be
exported and the remainder used for domestic consumption
(Macauhub, 2009a). British company Sun Biofuels also announced
the construction of a factory to refine biodiesel from Jatropha near
Chimoio in Manica province aiming at producing around 20,000 l
of biodiesel per year (Macauhub, 2009b). Petrobuzi (PetroMoc)
intends to construct an on-site ethanol distillery (CPI, 2009), just
like Procana, Principle Energy and Grown Energy Zambeze. As
Procana’s contract was recently voided by the government, it is
unclear if this facility will be constructed.
Fig. 5 presents the location of planned processing and storage
facilities. According to our inventory, there is a strong
concentration of planned processing and storage facilities
around Beira. It must be noted that many issues related to
feedstock quantity, economic sustainability and administrative
procedures have to be resolved before individual projects can
justify establishing processing and storage facilities.
8.4. Overview of biofuel developments in Mozambique
Fig. 6 brings together all implemented biofuel projects
and expressions of interest. We added existing and planned
biofuel-related processing and storage facilities, and indicated
the concentration of activities. It shows that the highest
concentration of biofuel activities can be found around Maputo
up to Inhambane, and in and around the Beira-Corridor, followed
by the south of Zambe
´zia province around Quelimane and the
north of Nampula province and the south of Cabo Delgado
province.
Table 7 summarizes the inventory of formally submitted
proposals, other implemented biofuel projects, expressions of
interest, and existing and planned biofuel-related processing and
storage facilities per Mozambican province.
As Table 7 demonstrates, 71% of biofuel projects (formally
submitted and other projects) are located in Maputo, Gaza
Inhambane, Sofala and Manica provinces. The remaining 29% of
biofuel projects are located in Zambe
´zia, Niassa, Nampula and
Cabo Delgado provinces.
Of the existing and planned processing and storage facilities,
90% are located in Maputo, Manica and Sofala provinces. There
appears to be a relation between the location of processing and
storage facilities and the geographical interest of the projects, as
50% of the implemented biofuel projects and expressions of
interest are also located in these provinces. We believe that
biofuel projects prefer locations near processing and storage
facilities, mainly because this will reduce transport costs.
When combining the geographical data on implemented
projects and expressions of interest with data on existing and
planned processing and storage facilities, the differences between
North and South Mozambique become even more evident:
80% of the total biofuel developments are in Maputo, Gaza and
Inhambane, Sofala and Manica provinces, and only 20% in
Zambe
´zia, Niassa, Nampula and Cabo Delgado provinces. Tete is
the only province where no biofuel developments take place.
Fig. 3. Geographical spread of other implemented biofuel projects and expressions of interest.
M. Schut et al. / Energy Policy 38 (2010) 5151–51655160
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Fig. 4. Locations of existing biofuel-related processing facilities.
Fig. 5. Location of existing and planned processing and storage facilities.
M. Schut et al. / Energy Policy 38 (2010) 5151–5165 5161
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9. Drivers of biofuel developments in Mozambique
The objective of this paper was to analyze knowledge from
different disciplines to provide an overview of current biofuel
developments in Mozambique, exploring to what extent reality
matches the country’s biophysical potential and government’s
objectives as described in the NBPS. In our analysis, we have tried
to highlight what appear to be the key drivers behind biofuel
developments in the country.
9.1. Policy drivers
The majority of implemented and planned biofuel projects are
outside the areas defined as ‘Rapid Development Zones’, which
are located in regions with poor infrastructure and low levels of
human capital. This may reflect the fact that the incentives
provided under the Investment Law and Code of Fiscal Benefits
consist mainly of reduced payment of corporate taxes once profits
have been made, while it is more difficult to make profits in areas
Fig. 6. Geographical spread of biofuel developments in Mozambique.
Table 7
Analysis of biofuel developments per Mozambican province.
Bioethanol projects Biodiesel and PPO-projects Total projects Processing and
storage facilities
Total
Province # Formal # Other # Total % # Formal # Other # Total % # % # Total % # %
Maputo 0 1 1 14 2 1 3 10 4 11 5 24 9 15.3
Gaza 1 0 1 14 1 1 2 6 3 8 1 5 4 6.8
Inhambane 0 0 0 0 1 4 5 16 5 13 0 0 5 8.5
Sofala 1 1 2 29 2 4 6 19 8 21 11 52 19 32.2
Manica 1 0 1 14 3 3 6 19 7 18 3 14 10 16.9
Tete 0 0 0 0 0 0 0 0 0 0 0 0 0 0.0
Zambe
´zia 1 0 1 14 1 3 4 13 5 13 0 0 5 8.5
Niassa 0 0 0 0 1 1 2 6 2 5 0 0 2 3.4
Nampula 0 0 0 0 1 1 2 6 2 5 1 5 3 5.1
Cabo Delgado 1 0 1 14 0 1 1 3 2 5 0 0 2 3.4
Total 5 2 7 100 12 19 31 100 38 100 21 100 59 100
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which are far from major target markets and poorly serviced by
basic infrastructure.
The creation of special duty free industrial areas near big cities
(like Nacala-Porto, Nampula’s deep-sea port) might stimulate the
agglomeration effect (Wheeler and Mody, 1992). The concentration
of biofuel industry in such areas make them increasingly attractive
for future biofuel feedstock producers, as these areas provide the
necessary infrastructure, access to goods, services and expertise
and allow feedstock producers to keep transportation costs low.
In relation to market selection, it is too early to comment
conclusively as the NBPS was only recently put in place. Although
the government identified establishing the domestic market as
priority, blending mandates will take some time to put in place,
and other policy instruments designed to create domestic demand
are not yet defined. As SADC and other regional markets for
trading biofuels are also to be established, investors focus on the
EU market where incentives are already in place, such as premium
prices and tariff advantages under trade agreements.
9.2. Biophysical potential
The general scale of the land zoning exercise (1:1,000,000)
does not allow us to draw very firm conclusions about whether or
not projects are located in areas where land is most available.
However, we can observe that the provinces with highest interest
for biofuel projects
4
(71% of the projects are located in Maputo,
Gaza, Inhambane, Manica and Sofala) only represent 39% of land
available. The rest of the projects (29%) are spread over the
northern provinces that represent 61% of the available land
(Fig. 7).
This difference becomes even more visible if we zoom in on
Maputo, Manica and Sofala provinces. 50% of the biofuel projects
are located in these provinces, whereas they only represent 11.6%
of the 6,966,030 ha identified as available during the zoning.
Maputo, for example, only has 11,000 ha of land available,
whereas 12,256 ha (111.4%) was requested by investors.
We can draw a similar conclusion if we compare our findings
with the projection of provincial biomass annual production
potential for 2015 based on climate and soil characteristics
(Batidzirai et al., 2006, 61–62). We see that 32% of the biofuel
projects are located in Maputo, Gaza and Inhambane provinces,
whereas these provinces only represent 6.3% of the country’s
6670 PJ total annual biomass production potential (see Table 1).
Provinces with highest annual biomass production potential such
as Niassa, Cabo Delgado and Nampula (54.1% of total annual
biomass production potential), are not very popular among
investors, as only 16% of the biofuel projects have interest in
locating themselves in these provinces. This is likely to be
explained by the almost total absence of infrastructure, and the
lack of (skilled) labor in these provinces.
9.3. Socio-economic factors
Our analysis revealed an apparent relationship between the
spatial availability of (skilled) labor, access to inputs, the
availability and quality of infrastructure (roads and ports), and
Fig. 7. Geographical spread of implemented projects and expressions of interest versus agro-ecological zoning in Mozambique (IIAM and DNTF, 2008).
4
Note: If we refer to ‘biofuel projects’, this does not include the existing and
planned processing and storage facilities
M. Schut et al. / Energy Policy 38 (2010) 5151–5165 5163
ARTICLE IN PRESS
the number of biofuel projects in these areas. Provinces with a
combination of low population density, low literacy levels and
low net school enrolment rates (NER) such as Tete, Niassa,
Nampula and Cabo Delgado were not attractive for biofuel
projects. Provinces with relative high population density, highest
adult literacy rates and NER such as Maputo, Inhambane and
Manica coincided with a high number of implemented and
planned biofuel projects. On the contrary, Sofala province does
not score very well on population density, literacy levels and NER,
but has the highest number of implemented and planned biofuel
projects in the country. This high interest in Sofala could be
explained by relatively good access to agricultural inputs, existing
and planned processing and storage facilities, electricity and
infrastructure such as Beira port.
In general, we saw a high concentration of biofuel projects
around areas with good infrastructure and access to ports, such as
Maputo, Beira, Quelimane, Nacala and Pemba, where existing fuel
storage facilities are also present. This is rational, as a significant
quantity of biofuels produced in Mozambique will be used to
supply external markets.
10. Conclusions
Since the initial promotion of biofuels in 2004, much has
changed in Mozambique. From promoting biofuel production by
smallholders for domestic purposes, the sector is currently
dominated by foreign commercial investors whose main intention
is supplying external markets.
Based on our analysis and geographical mapping, we can
conclude that biofuel developments mainly take place in areas
near good infrastructure (roads and ports), where there is
(skilled) labor available, and access to services and goods,
processing and storage facilities; not deviating from the
classical variables from investment theory. We also found that
current developments appear to be less driven by biophysical
potential and incentives provided within prevalent government
policy.
As compared to the policy objectives described in the NBPS,
our analysis shows that currently only few projects are located in
remote, rural areas. Moreover, job creation as proposed by
investors seems lower than expected by the government in the
NBPS. Nonetheless, although the currently operational biofuel
projects are not in the most remote rural areas, they do contribute
to socio-economic development by generating employment,
income and more indirect local spin-offs. Most investors – in
absence of domestic or regional markets – focus on supplying
external markets. Although this is in line with the NBPS to
generate tax-revenues and foreign currency, it does not contribute
to diversifying the country’s energy matrix, or decreasing the
fossil-fuel dependency Mozambique is facing.
It will be important for the Mozambican government to closely
monitor developments in the biofuel sector, to understand the
dynamics at play that are driving the direction of biofuel
developments, and how these can harmonized with the country’s
NBPS-objectives. This requires the timely development and
implementation of adequate policy tools and instruments to
increase the likelihood that biofuel developments in Mozambique
will enable the country to benefit its potential.
Lastly we would like to mention that the maps, tables and
figures that we used to visualize our findings were extremely
useful when sharing our results with policy-makers and other
stakeholders. Notably the maps served as tangible boundary
objects to which different communities of actors could easily
relate (cf. Klerkx et al., 2010). This helped us to position the
outcome of this research in the biofuel policy debate.
Acknowledgements
This research is part of the strategic research program
‘Sustainable spatial development of ecosystems, landscapes, seas
and regions’ and is funded by the Dutch Ministry of Agriculture,
Nature Conservation and Food Quality. The research is also part of
the Competing Claims-Competing Models program jointly funded
by Wageningen University and Research Centre and the Dutch
Ministry of Development Cooperation (DGIS).
The authors acknowledge the contributions of colleagues and
the two anonymous reviewers who provided constructive feed-
back on earlier versions of this paper. Special thanks to CEPAGRI,
IIAM, GTZ-ProBEC and all the investors, farmers, extension
workers, researchers, NGO representatives and policy-makers
that collaborated with us and provided data and insights
necessary for this study.
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