Fuelling the biofuels debate

I was at a conference a couple of weeks ago, where the initial session was given over to some highly experienced pundits giving their views on the way the biofuels market could develop. Without exception they pointed to Africa as having huge potential for producing a substantial amount of biofuel feedstock. However, only one speaker even acknowledged that there could be some “difficulty” in the continent matching up to the projected figures.

The pundits at the conference certainly aren’t the only one’s who are including substantial African figures in their projections. A quick call round the market seem to back up the general feeling that it is reasonable to include Africa’s vast feedstock potential in the forecasts.

The optimism was further supported today (4th July) in a press release from Frost & Sullivan which hit my inbox. In the release a Frost & Sullivan research analyst, Jhill Johns, suggested that;

As the biofuels debate has intensified, Africa has however also become the focus of many industrialised nations as a potential solution. This is because it has extensive amounts of underutilised land available and cheap labour for agricultural crop production.

“Southern African countries, including Botswana, Mozambique, Namibia, South Africa and Zimbabwe have an estimated 137.3 million hectares of potential arable land available between them,” notes Johns. “Of this, only 17.1 per cent is presently cultivated.”

Frost & Sullivan believes there is enough land available, even in South Africa, to accommodate crop production for both fuel and food. There is potentially an additional 28 million hectares of arable land in South Africa alone that is not currently being cultivated.

So to leverage all this potential what is required? Well according to Frost and Sullivan it’s significant investment.

There is certainly an opportunity for African countries to access lucrative export markets for their agricultural products through biofuels – specifically to industrialised countries, but this has to be balanced with the needs and demands for basic food security. While Frost & Sullivan believes this balance is possible to obtain, it will require significant investment in both agricultural production and the development of new technologies, concluded the release.

So there you have it! Problem solved. Pour significant investment into the market and everyone is a winner. But let’s just have a look at those countries again: Botswana, Mozambique, Namibia, South Africa and Zimbabwe. While Botswana and South Africa are stable with good ratings, it would be a very brave investor who committed large amounts of funds to Mozambique, Namibia and Zimbabwe, and therein lies the rub.

Potentially these countries could indeed make a huge contribution to the pool of biofuel feedstock producers, but I believe that, as it stands, it is unlikely to happen. Consequently, the vast figures, for African biofuel feedstock production, that are built into many of the current forecasts are unrealistic. Certainly in the short to medium term, say the next 5 to 10 years.

The frustrating thing is that feedstock cultivation in these countries could provide them with much needed income, energy and food. However, in the current climate it simply isn’t going to happen.

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