The famine crisis in the Horn of Africa is bringing into focus the controversial role that bio-fuels play in the African continent. With both Kenya and Ethiopia having leased 700,000 hectares of land to foreign investors, the question now is whether bio-fuels represent new development opportunities, or a new form of colonization.

Both Europe and the U.S. are committed to expanding their clean fuel consumption.In particular, new European legislations that came into force last December require gasoline and diesel in EU Member States to incorporate a minimum 10 percent of low-carbon fuel by 2020. But given the region’s shortage of arable farmland, this ambitious target will lead to a tripling of agro-fuel imports currently supplied from Asia and South America. As early as 2005, forward-looking investors foresaw this future scenario, and accordingly turned their gaze to the continent with the world’s largest and cheapest share of arable land.
Africa’s 807 millions hectares of under-used soil represent 15 times what the International Energy Agency considers necessary to meet the rising global demand for biofuels over the next two decades. Since then, around 50 Western companies, largely from Europe, have launched a hundred projects in more than 20 African countries, with concessions covering a total area of at least 3.2 millions hectares, roughly the size of Ireland. Some African governments, meanwhile, have eagerly sought to cash in. In 2006, a twelve-nation bloc formed what has come to be called the “Green Opec,” a joint initiative promoting local production and use of bio-fuels, with funds to be reinvested toward agricultural improvements.
The Sceptics “There are no plans to build refineries, nor obligations for foreign investors to reserve part of their output for the domestic market,” said Jamidu Katima, Professor of Chemical Engineering at the University of Dar es Salaam in Tanzania, following that country’s adoption of new bio-fuels guidelines last year. The rush to grow crops for fuel also bumped up grain prices during the food crisis in 2008, exposing agro-energy raiders to NGO crossfire. In 2009-2010, around 80 percent of the bio-fuels powering British vehicles came from feedstock usable for food or animal feed, according to the national Renewable Fuels Agency.
Investors counter that Jatropha, a shrub native to Central America, is the answer to public criticism, pointing to the crop’s ability to flourish on marginal and arid land unsuitable for agriculture. And yet, research by the UN Food and Agriculture Organization prove that the heralded “miracle crop” might be less miraculous than investors’ claims. “Growing Jatropha in a profitable way on dry land is a myth,” says Peter Auge, country manager of the British company Sun Biofuels. “Jatropha needs water, fertilizers and pesticides to provide high yields,” he adds. Auge’s plantation sits on some of Tanzania’s most productive land, receiving no less than “1100mm of annual rainfall, ” as advertised on SunBiofuels’s Web site. Food Security and Climate Change Jatropha’s uncontrolled expansion on fertile cropland poses a risk not to only food security, but also to the ultimate climate change mitigation goal pursued by the EU.
Last November, projections by the London-based Institute of European Environmental Policy warned that displaced farmers will be forced to cut trees elsewhere to grow their food. CO2 released from such deforestation could exceed carbon saving requirements from agro-energy supplies in Europe that are set to rise from 35 percent in 2011 to 60 percent in 2018. “Because we know comparatively less about Jatropha, its advantages could very well be overstated,” says David Omom, Senior Consultant at Pöyry Management Consulting, a London-based energy firm. “If it requires as many resources as other crops, it could end up being as expensive and less environmentally sustainable and may not even be able to supply the European market.”
Higher-than-expected costs have already forced reappraisals among a number of agro-energy majors. U.K.-based D1 Oils froze export plans after the failure in 2009 of its joint venture with British Petroleum, which expressed doubt about Jatropha’s market potential. Last year, GEM Biofuels, operating in Madagascar, suspended trade on the London Stock Exchange for four months. ESV Bio Africa left Mozambique two years ago. Community Approach Agro-energy corporate fiascos may affect not only shareholders, but also the livelihoods of local communities. In 2009, Bio Energy Africa pulled out from its bio-ethanol joint venture with the government in Mozambique. The result — thousands of farmers lost their right to farm the land allocated under the project, and received no compensation for jobs promised to them under the agreement.
Meghan Sapp, Secretary General of the Brussels-based network Partners for Euro-African Green Energy, notes that following the financial crisis, “most large Jatropha monocultures lost competitiveness and financial support.” She adds that more EU funding “should be made available for small-scale, integrated and truly sustainable projects.” Lorenzo Cotula, Senior Researcher at the International Institute for the Environment and Development, concurs.
“Extensive commercial plantations dislocate rural communities from their land. Instead, self-managed bio-fuel production can offer them cheaper energy and complementary sources of income.” Several investors have shown interest in this community-based approach. “Our farmers in Mozambique are given seedlings to grow Jatropha on their own land with the option to sell the seeds back to us,” says Chris Hunter, director and co-founder of the UK-flagged Viridesco. “We help smaller plantations that cater to the developing world markets, as opposed to big monocultures that service the developed world’s energy needs”.