A Biofuel Perspective for Africa

Climate solutions are much talked about when it comes to electromobility or the advent of a hydrogen-based society, but greenhouse gas (GHG) emissions stubbornly churn on. Transport contributes one quarter of global GHG emissions, and two-thirds of this are coming from road transport. Considering global GHG emissions at present (2019, pre-pandemic levels) – China 10 Gigatons, United States 5Gt, EU 4Gt, Africa 1.3Gt – and historic growth rates of just under 5% per annum in the past decades, Africa could see emissions rise to more than 1.5Gt by 2030, 2.5Gt by 2040, 4Gt by 2050, reaching the current level of the EU if the continent does not take measures to curtail emissions.

Europe is not self-sufficient in first-generation biofuels, even though installed production capacity is not fully utilised, and imports may indeed make sense.First-generation biofuels, including “co-processed” diesel and raw materials for the production thereof, remain an opportunity for imports in Europe from Africa, as agricultural efficiency (favourable climatic conditions) and cost of production may offer competitive advantages compared to the conditions found in Europe. And distance to market is smaller, compared to South-East Asia, for instance. But special attention must be paid to sustainability and level-playing field for the economic conditions of production. Lack of spare refining capacity in Africa at present, as well as a continued shortfall of locally produced diesel would also limit this possibility.

Africa’s significant competitive advantages must be exploited in practice. The lessons learnt over the past 30 years from the renewable electricity production industry show three steps for a successful development of a new activity like biofuels in Africa.

CITAC Industry Insight is published in CITAC’s Sub-Saharan Africa Oil Market Report October 2021/January 2022.