Kereaorgwp Contentuploads201212a Roadmap For Biofuels in Kenya - Opportunities and Obstaclespdf

A ROADMAP FOR BIOFUELS IN KENYA
OPPPPO
ORRT
TUUN
NIIT ESS & OB
TIIE BSST
TAAC
CLLE
ESS
A ROADMAP FOR BIOFUELS IN KENYA
OPPPPO
ORRT
TUUN
NIIT ESS & OB
TIIE BSST
TAAC
CLLE
ESS
17 MAY 2008
COMMISSIONED BY:
GESELLSCHAFT FÜR TECHNISCHE ZUSAMMENARBEIT (GERMAN TECHNICAL

COOPERATION - GTZ) KENYA
&
MINISTRY OF AGRICULTURE, GOVERNMENT OF KENYA
THROUGH
PROMOTION OF PRIVATE SECTOR DEVELOPMENT IN AGRICULTURE PROGRAMME
(PSDA)
GTZ-REGIONAL ENERGY ADVISORY PLATFORM EAST AFRICA (REAP EA)
GTZ Sector Project on Bioenergy in Eschborn, Germany
CONDUCTED BY:
ENDELEVU ENERGY
&
ENERGY FOR SUSTAINABLE DEVELOPMENT AFRICA
A ROADMAP FOR BIOFUELS IN KENYA GTZ/KENYA MINISTRY OF A GRICULTURE
PREFACE
The current debate on climate change and rising oil prices has greatly increased interest in renewable
energy, such as biofuels. Many industrialized countries and more advanced developing countries are
seeking to promote biofuels as a way of reducing fossil fuel consumption and mitigating the adverse
effects of climate change.
Despite the myriad benefits of biofuels, it is important to note that they are not a panacea for
climate change or the world’s addiction to fossil fuels. As recent experience has shown,
unsustainably produced biofuels can create more problems than they solve. For example, huge
demands for corn-based ethanol in the United States and palm-based biodiesel in Europe have
added pressure on already tight world food supplies and contributed to the clearing of virgin
rainforests in Southeast Asia.
Policymakers and other stakeholders in Kenya must work to avoid replicating these unsustainable
models of biofuels production. We must learn from the mistakes that have occurred elsewhere to
ensure the use of environmentally and socially sound practices in domestic biofuels production.
Kenya is seeking alternatives to its high dependence on imported fossil fuels and the concomitant
outflow of foreign currency. Biofuels could provide many attractive opportunities to reduce this
dependence while reinvesting in the country’s sustainable development. But, as noted above and
discussed in detail throughout this study, many challenges must first be addressed before a thriving
industry can be established.
It is on this basis that the German Technical Cooperation (GTZ), on behalf of the German
Government, has responded to a request from the Ministry of Agriculture, Government of Kenya,
to commission this study, as well as a related study on biogas. In order to imbed the bioenergy
study work in Kenya with similar questions regionally and globally, three projects have been
cooperating and funding this effort:
! The Kenyan-German Private Sector Development in Agriculture (PSDA) Programme in

Nairobi, Kenya
! The GTZ Regional Energy Advisory Platform East Africa (REAP EA) covering Ethiopia,
Kenya, Rwanda, Tanzania and Uganda.
! The GTZ Sector Project on Bioenergy in Eschborn, Germany.
The following biofuels study provides a comprehensive overview of the national potential and
challenges facing biofuels in Kenya. The goal is to elucidate benefits and analyze viability, while also
assessing possible challenges, such as economic feasibility, fiscal and regulatory limitations, and
environmental and social impacts, including competition with food. The study highlights the
potential of establishing a biofuels industry and analyzes the political and legal environment that will
be required to promote the sustainable development of biofuels in Kenya. The study also provides a
history and current status of biofuels in Kenya and a critical appraisal of the policy framework
within which this sector must develop.
Cover Photos - Top: Abandoned gas pump, Muhoroni; Middle Left: Jatropha plantation, Central Province; Middle Right: Croton seeds; Kerio Valley;
Bottom Left: Sugarcane en route to factory, Muhoroni; Bottom Right: Spectre International ethanol plant, Kisumu. Credit: David Newman (2007).
We hope that this biofuels study contributes significantly to a well-informed and well-executed
bioenergy strategy in Kenya.
Permanent Secretary Permanent Secretary Country Director

Kenya Ministry of Agriculture Kenya Ministry of Energy GTZ Kenya
Nairobi, 29 April 2008
17 May 2008
CONTENTS
CONTENTS.........................................................................................................................................................................i
TABLES ..............................................................................................................................................................................iii
FIGURES ............................................................................................................................................................................iv
MAPS ...................................................................................................................................................................................iv
PHOTOS.............................................................................................................................................................................iv
LIST OF ACRONYMNS.................................................................................................................................................vi
1. INTRODUCTION & EXECUTIVE SUMMARY..............................................................................................1
2. OVERVIEW OF ETHANOL & BIODIESEL .................................................................................................13
2.1 ETHANOL ............................................................................................................................................................13
2.1.1 Performance, Efficiency & Quality .........................................................................................................13
2.1.2 Ethanol Production Process & Technology ..........................................................................................14
2.1.3 Ethanol Feedstocks....................................................................................................................................15
2.1.3.1 Cassava..................................................................................................................................................17
2.1.3.2 Sugarcane..............................................................................................................................................19
2.1.3.3 Sweet Sorghum ....................................................................................................................................21
2.1.4 Second-Generation Ethanol Production................................................................................................22
2.2 BIODIESEL ...........................................................................................................................................................22
2.2.1 Performance, Efficiency & Quality .........................................................................................................23
2.2.2 Biodiesel Production Process & Technology ........................................................................................24
2.2.3 Biodiesel Feedstocks..................................................................................................................................24
2.2.3.1 Castor ....................................................................................................................................................26
2.2.3.2 Coconut ................................................................................................................................................28
2.2.3.3 Cotton ...................................................................................................................................................30
2.2.3.4 Croton ...................................................................................................................................................32
2.2.3.5 Jatropha.................................................................................................................................................34
2.2.3.6 Rapeseed (Canola)...............................................................................................................................36
2.2.3.7 Sunflower..............................................................................................................................................38
2.2.4 Second-Generation Biodiesel ...................................................................................................................39
3. HISTORY & CURRENT STATUS OF BIOFUELS........................................................................................40
3.1 ETHANOL IN KENYA ........................................................................................................................................40
3.2 BIODIESEL IN KENYA .......................................................................................................................................43
3.3 GLOBAL BIOFUELS PROGRAMS.......................................................................................................................47
3.3.1 Brazil ............................................................................................................................................................47
3.3.2 Germany ......................................................................................................................................................48
3.3.3 India..............................................................................................................................................................49
3.3.4 Thailand .......................................................................................................................................................49
3.3.5 United States ...............................................................................................................................................50
3.4 REGIONAL BIOFUELS PROGRAMS ..................................................................................................................50
3.4.1 Ethiopia .......................................................................................................................................................50
3.4.2 Malawi ..........................................................................................................................................................50
3.4.3 Mali ...............................................................................................................................................................51
3.4.4 Nigeria..........................................................................................................................................................51
3.4.5 Senegal .........................................................................................................................................................51
17 May 2008 i
3.4.6 South Africa ................................................................................................................................................51

3.4.7 Sudan............................................................................................................................................................52
3.4.8 Tanzania.......................................................................................................................................................52
3.4.9 Uganda .........................................................................................................................................................53
4. ECONOMIC ANALYSIS ......................................................................................................................................54
4.1 THE AVAILABILITY OF FEEDSTOCK, INPUTS & TECHNOLOGY...............................................................54
4.1.1 The Availability of Biofuels Feedstocks in Kenya ................................................................................54
4.1.1.1 Status Quo Feedstock Production Scenario ...................................................................................56
4.1.1.2 Potential Feedstock Production Scenario .......................................................................................56
4.1.1.3 Optimized Potential Feedstock Production Scenario ...................................................................57
4.1.2 The Availability of Non-Feedstock Inputs ............................................................................................58
4.1.3 The Availability of Biofuels Processing Technology............................................................................58
4.2 ECONOMIC FEASIBILITY ANALYSIS ...............................................................................................................58
4.2.1 Economic Feasibility of Ethanol .............................................................................................................59
4.2.2 Economic Feasibility of Biodiesel ...........................................................................................................61
4.3 KENYAN AND GLOBAL BIOFUELS MARKETS ..............................................................................................64
4.3.1 Ethanol Markets .........................................................................................................................................64
4.3.2 Biodiesel Markets .......................................................................................................................................65
4.4 EMPLOYMENT & INCOME BENEFITS ............................................................................................................66
4.4.1 Ethanol Employment & Income.............................................................................................................66
4.4.2 Biodiesel Employment & Income ...........................................................................................................67
4.5 CURRENT & PROJECTED PETROL & DIESEL C ONSUMPTION ..................................................................69
4.6 LAND AVAILABILITY FOR PRODUCING E10 & B2 ......................................................................................69
4.7 FOREIGN CURRENCY S AVINGS & DOMESTIC REINVESTMENT ...............................................................70
4.8 CARBON FINANCE POTENTIAL.......................................................................................................................70
4.8.1 Clean Development Mechanism (CDM) Market..................................................................................71
4.8.2 Voluntary Carbon Market.........................................................................................................................72
5. REGULATORY & FISCAL ANALYSIS ............................................................................................................73
5.1 ENERGY REGULATION .....................................................................................................................................73
5.2 CONSUMER PROTECTION ................................................................................................................................74
5.3 HEALTH, OCCUPATIONAL SAFETY & WORKER PROTECTION ................................................................75
5.4 ENVIRONMENTAL PROTECTIONS ..................................................................................................................75
5.4.1 Environmental Impact Assessments.......................................................................................................76
5.4.2 Water Pollution...........................................................................................................................................77
5.4.3 Hazardous Chemicals ................................................................................................................................77
5.4.4 Waste & Byproduct Disposal ...................................................................................................................77
5.5 PURCHASE, DOMESTIC MOVEMENT & IMPORTATION OF SEEDS
& OTHER GENETIC MATERIAL ......................................................................................................................78
5.6 ACQUIRING & USING LAND ............................................................................................................................79
5.7 EQUIPMENT PURCHASE & IMPORTATION ....................................................................................................80
5.8 TRADE & INVESTMENT ....................................................................................................................................81
5.9 TAXES & FISCAL POLICY ..................................................................................................................................81
6. ENVIRONMENTAL & SOCIAL IMPACTS ....................................................................................................83
6.1 AIR & WATER POLLUTION ..............................................................................................................................83
6.2 GREENHOUSE GAS (GHG) EMISSIONS ........................................................................................................85
6.3 NET ENERGY BALANCE & ENERGY RETURN ON INVESTMENT .............................................................86
6.4 SOIL E ROSION, LAND CONSERVATION, INVASIVENESS & BIODIVERSITY ...........................................87
6.5 COMPETITION WITH FOOD .............................................................................................................................88
6.5.1 Debate & Facts on Biofuels and Food ...................................................................................................88
17 May 2008 ii
6.5.2 Biofuels & Food in Kenya ........................................................................................................................90

6.6 INTERNATIONAL S USTAINABILITY STANDARDS PROTECTING
THE POOR AND THE ENVIRONMENT ............................................................................................................92
6.7 HIV/AIDS..........................................................................................................................................................94
7. ROADMAP & RECOMMENDATIONS...........................................................................................................96
7.1 ENVISIONING E10 & B2 BY 2013...................................................................................................................96
7.2 EMPOWERING S MALLHOLDER BIOFUELS C OOPERATIVES .......................................................................98
7.3 DEVELOPING THE VALUE C HAIN ..................................................................................................................98
7.4 DESIGNING AN APPROPRIATE REGULATORY & FISCAL FRAMEWORK ................................................100
7.5 ENSURING ENVIRONMENTAL SUSTAINABILITY ........................................................................................104
7.6 PILOT PROJECTS & AREAS OF FURTHER RESEARCH ................................................................................104
7.7 INFORMING & CREATING AWARENESS AMONGST DECISION MAKERS & THE PUBLIC ..................105
7.8 CONCLUSION ....................................................................................................................................................105
BIBLIOGRAPHY ..........................................................................................................................................................106
NOTES .............................................................................................................................................................................117
APPENDIX A: ETHANOL FEEDSTOCK SUITABILITY MAPS................................................................. A-1
APPENDIX B: BIODIESEL SUITABILITY MAPS ......................................................................................... A-14
APPENDIX C: ETHANOL FUEL QUALITY & BLENDING STANDARDS......................................... A-43
APPENDIX D: BIODIESEL FUEL QUALITY & BLENDING STANDARDS ...................................... A-45
APPENDIX E: AUTO MANUFACTURERS’ BIODIESEL WARRANTIES............................................. A-48
APPENDIX F: BIODIESEL CAPITAL & OPERATIONS COSTS.............................................................. A-51
TABLES
TABLE 1: C URRENT & PLANNED ETHANOL PRODUCTION CAPACITY..................................................................42

TABLE 2: STATUS QUO FEEDSTOCK PRODUCTION SCENARIO ..............................................................................56
TABLE 3: POTENTIAL FEEDSTOCK PRODUCTION SCENARIO ................................................................................56
TABLE 4: OPTIMIZED POTENTIAL FEEDSTOCK PRODUCTION SCENARIO ..........................................................57
TABLE 5: BIODIESEL FEEDSTOCK COSTS ....................................................................................................................62
TABLE 6: BIODIESEL NON-FEEDSTOCK COSTS ........................................................................................................63
TABLE 7: FARM INCOME FROM DIFFERENT ETHANOL FEEDSTOCKS .................................................................67
TABLE 8: 50 HECTARE JATROPHA PLANTATION C OSTS & REVENUE ...................................................................68
TABLE 9: LAND REQUIRED FOR 10% (E10) ETHANOL PRODUCTION BY 2013 ...................................................70
TABLE 10: LAND REQUIRED FOR 2% BIODIESEL (B2) PRODUCTION BY 2013 ...................................................70
TABLE 11: TAXES & REGULATIONS ON IMPORTING MACHINERY .........................................................................80
TABLE 12: FUEL TAXES ON PETROL & DIESEL IN KENYA (KSH/L) .....................................................................81
TABLE 13: BIODIESEL NET ENERGY BALANCE (NEB) ............................................................................................86
TABLE 14: COMPARISON OF INCOME FROM CO-PRODUCTION OF SUGAR &
ETHANOL VS. INCOME FROM ETHANOL ONLY AT C URRENT DOMESTIC
& IMPORTED S UGAR PRICES ................................................................................................................................91
TABLE 15: HIV PREVALENCE IN S ELECT AREAS, 2006 ............................................................................................95
TABLE 16: FEEDSTOCKS, LAND & INCOME FROM E10 & B2 PRODUCTION BY 2013 .......................................98
17 May 2008 iii

FIGURES
FIGURE 1: ETHANOL PRODUCTION PROCESS ...........................................................................................................15

FIGURE 2: BIODIESEL PRODUCTION PROCESS ..........................................................................................................24
FIGURE 3: INFLATION ADJUSTED OIL PRICES 1970-2007 .......................................................................................40
FIGURE 4: C OST OF MOLASSES FEEDSTOCK IN KENYA & THE WORLD ..............................................................59
FIGURE 5: C OST OF SUGARCANE ETHANOL IN KENYA & THE WORLD ..............................................................60
FIGURE 6: BIODIESEL C OST OF PRODUCTION BY FEEDSTOCK & SCALE OF PRODUCTION ............................64
FIGURE 7: C UMULATIVE NET INCOME 50 HECTARE JATROPHA PLANTATION OVER 12 Y EARS ...................68
FIGURE 8: 85% (E85) & 10% (E10) ETHANOL VS. PETROL....................................................................................84
FIGURE 9: 100% (B100) & 20% (B20) BIODIESEL COMPARED VS. PETRODIESEL ............................................84
FIGURE 10: ETHANOL & BIODIESEL PRODUCTION & FEEDSTOCK C OMMODITY PRICES ..............................89
MAPS
MAP 1: CASSAVA S UITABILITY WITH FOOD & CASH C ROPS ...................................................................................17

MAP 2: S UGARCANE SUITABILITY WITH FOOD & C ASH CROPS .............................................................................19
MAP 3: S WEET SORGHUM SUITABILITY WITH FOOD & CASH C ROPS ...................................................................21
MAP 4: CASTOR S UITABILITY WITH FOOD & C ASH CROPS .....................................................................................26
MAP 5: COCONUT SUITABILITY WITH FOOD & C ASH C ROPS .................................................................................28
MAP 6: COTTON SUITABILITY WITH FOOD & CASH C ROPS....................................................................................30
MAP 7: CROTON SUITABILITY WITH FOOD & C ASH CROPS....................................................................................32
MAP 8: JATROPHA S UITABILITY WITH FOOD & CASH C ROPS .................................................................................34
MAP 9: RAPESEED SUITABILITY WITH FOOD & CASH C ROPS ................................................................................36
MAP 10: SUNFLOWER SUITABILITY WITH CASH & FOOD CROPS ...........................................................................38
PHOTOS
PHOTO 1: SPECTRE INTERNATIONAL’S ETHANOL PLANT IN KISUMU..................................................................13

PHOTO 2: E85 FUEL PUMP. ............................................................................................................................................14
PHOTO 3: CASSAVA PLANTATION. ...............................................................................................................................17
PHOTO 4: RECENTLY HARVESTED CASSAVA. .............................................................................................................17
PHOTO 5: SUGARCANE PLANTATION. .........................................................................................................................19
PHOTO 6: CUT SUGARCANE...........................................................................................................................................19
PHOTO 7: SWEET SORGHUM PLANTATION.................................................................................................................21
PHOTO 8: SWEET SORGHUM STALK. ............................................................................................................................21
PHOTO 9: SWITCHGRASS PLANTATION. ......................................................................................................................22
PHOTO 10: E UROFUELTECH CR2400 BIODIESEL REACTOR. ..................................................................................23
PHOTO 11: C ASTOR PLANTS FRUITING........................................................................................................................26
PHOTO 12: C ASTOR BEANS. ...........................................................................................................................................26
PHOTO 13: C OCONUT TREES GROWING NEAR THE BEACH....................................................................................28
PHOTO 14: RECENTLY HARVESTED MATURE NUT....................................................................................................28
PHOTO 15: C OTTON BEGINNING TO FLOWER. .........................................................................................................30
PHOTO 16: C OTTON FLOWERING. ...............................................................................................................................30
PHOTO 17: C ROTON TREE IN THE KERIO VALLEY. .................................................................................................32
PHOTO 18: C ROTON FRUIT AND SEEDS. .....................................................................................................................32
17 May 2008 iv
PHOTO 19: JATROPHA PLANTATION IN SHIMBA HILLS............................................................................................34

PHOTO 20: JATROPHA FRUIT AND SEED. ....................................................................................................................34
PHOTO 21: RAPESEED PLANTATION IN FULL BLOOM. .............................................................................................36
PHOTO 22: RAPESEED. ...................................................................................................................................................36
PHOTO 23: S UNFLOWER PLANTATION. .......................................................................................................................38
PHOTO 24: S UNFLOWER SEEDS.....................................................................................................................................38
PHOTO 25: WATER TREATMENT AT SPECTRE INTERNATIONAL’S ETHANOL PLANT.........................................40
PHOTO 26: S UGARCANE BACKLOG OUTSIDE OF THE M UHORONI SUGAR C O.
AND THE ADJACENT, IDLED AGRO-CHEMICAL ETHANOL PLANT. ................................................41
PHOTO 27: AGRI-BUSINESS GROUP’S PLANTATION NEAR NAKURU; GREEN FUELS (K)’S
PLANTATION NEAR T HIKA; ENERGY AFRICA EXTENSION SERVICES
WITH PARTICIPATING SMALLHOLDER. .................................................................................................44
17 May 2008 v
LIST OF ACRONYMNS
B10 – A blend of 10% biodiesel and 90% petrol diesel

CDM – Clean Development Mechanism of the Kyoto Protocol
CIF – Cost, Insurance and Freight
CO2 – Carbon Dioxide
CRSP – Aga Khan Foundation’s Coastal Rural Support Programme
DEG – Deutsche Investitions und Entwicklungsgesellschaft.
E5 – A blend of 5% ethanol and 95% petrol
EIA – Environmental Impact Assessment
EIAL – Environmental Impact Assessment License
EMCA – Environmental Management & Coordination Act
ERC – Energy Regulatory Commission
ESDA – Energy for Sustainable Development Africa
EU – European Union
FAO – United Nations Food & Agriculture Organization
FAOSTAT – United Nations Food & Agriculture Organization’s Statistical Database
FFV – Flex Fuel Vehicles
GAF – Green Africa Foundation
GHG – Greenhouse Gases
GIS – Global Information System
GTZ – Gesellschaft für Technische Zusammenarbeit
HA – Hectare, or 2.47 acres
ICRAF – International Centre on Agroforestry (World Agroforestry Centre)
ICRISAT – Institute for Crops Research in the Semi-Arid Tropics
IPA – Investment Promotion Act
KARI – Kenya Agricultural Research Institute
KEBS – Kenya Bureau of Standards
KEFRI – Kenya Forestry Research Institute
KEPHIS - Kenya Plant Health Inspectorate Service
KIA – Kenya Investment Authority
KIRDI – Kenya Industrial Research Development Institute
KRA – Kenya Revenue Authority
MFC – Mali-Folkecentre
MW – Megawatt, equivalent to one million watts
NBC – National Biofuels Committee
NCA – Norwegian Church Aid
NEAP – National Environmental Action Plan Committee
NRDC – Natural Resources Defense Council
NOx – Nitrogen Oxide
PANERECC – Parliamentarian Network on Renewable Energy and Climate Change
RFS – Renewable Fuel Standard
UNDP – United Nations Development Programme
UNEP – United Nations Environment Programme
UNFCCC – United Nations Framework Convention on Climate Change
VCM – Voluntary Carbon Market
VJDF – Vanilla Jatropha Development Foundation
17 May 2008 vi
1. INTRODUCTION & EXECUTIVE SUMMARY
Biofuels are liquid, solid or gaseous energy sources derived from renewable biomass.1 They
generally emit fewer toxic air pollutants and greenhouse gasses than petroleum-based fuels and can
be produced anywhere sufficient biomass “feedstock” can be grown. At a time of record oil prices
and growing concern over global warming, biofuels present a valuable opportunity to reduce
dependence on volatile global oil markets, create local economic opportunities in agriculture and
industry, and improve the environment.
Global oil consumption is projected to increase by about 36% by 2030.2 In Africa, oil consumption
could nearly double in that time.3 As more countries scramble for an increasingly limited supply of
oil, the price and availability of fuel will become ever more challenging issues. Many countries see
biofuels as part of the solution to these problems, which has led to explosive growth in global
production. From 2000 to 2006, global fuel ethanol production nearly tripled to 40 billion liters,
while biodiesel production grew from one to six billion liters.4
As the thirst for biofuels has expanded, so too has the recognition that not all biofuels are created
equal in terms of environmental and social sustainability. From the destruction of rainforests for
palm oil plantations to the use of staple food crops like maize for ethanol, the impacts on
ecosystems and food supplies have grown. This has led some to question the overall value of
biofuels as a solution to global warming and tight oil supplies. Unfortunately, the debate over the
sustainability of biofuels has evolved in a way that generally has created two rather inflexible and
absolute schools of thought: one in favor and the other against. A more nuanced approach,
however, shows that biofuels can be produced in an environmentally- and socially-beneficial way if
the right crops and models of production are prioritized.
Countries like Kenya, with no proven oil reserves but suitable climatic conditions for growing
biofuels, could limit the shock of high oil prices by developing its own supply of domestically
produced biofuels. Although Kenya has yet to participate in the biofuels boom, it is beginning to lay
the groundwork for significant progress in the years to come. The government recently enacted a
policy (Sessional Paper, No. 4 of 2004) and legislation (the Energy Act, No. 12 of 2006) that favors
the development of ethanol and biodiesel, and the Ministry of Energy has developed a biodiesel
strategy through its National Biofuels Committee. In addition, a Kenya Biodiesel Association is
being formed with support from all sectors of the biofuels industry. The Ministry intends to turn its
attention to ethanol once the biodiesel program is established.
This study is intended to support these efforts with a detailed analysis of the latest information on
the agronomy, economics, law and policy, and environmental and social impacts of biofuels in
Kenya. The overriding objective is to transcend the standard rhetoric with an informed discussion
of the true opportunities and obstacles. The following is a brief summary.
Overview of Ethanol & Biodiesel
Section 2 provides a detailed overview of ethanol and biodiesel, the two main sources of biofuels
considered in this study. Ethanol, also known as ethyl alcohol or grain alcohol, is a liquid fuel that
can be produced from a variety of sugars and starch containing crops, such as grains. Ethanol was
17 May 2008 1
first used as an automotive fuel starting in 1908 with the Model T Ford and has been used as an
additive in petrol fuel for over 30 years. Kenya has produced ethanol from sugarcane since the early
1980s and for a time even blended it with petrol as part of its now-defunct gasohol program.
Ethanol can be blended with petrol in any ratio, or used straight, but requires the use of specially
designed flex fuel vehicles in blends above 10%, referred to as E10. The energy content of ethanol
is about two-thirds that of the equivalent amount of petrol, so an E10 blend will have about 93% of
the fuel economy of straight petrol. International and Kenyan fuel quality and blending standards
exist to ensure standardized quality and to protect consumers from potentially harmful fuel. The
Kenyan standards are a vestige of its earlier gasohol program and need updating.
Ethanol can be produced from sugar crops, such as sugarcane and sweet sorghum; grains, such as
corn and wheat; and cellulostic crops, such as switchgrass, although the latter is not yet economically
viable for commercial production. The basic production process involves extracting sugars from the
biomass, which is much easier and cheaper for sugar crops than grains, and then fermenting the
sugar in the presence of yeast. The resulting product is distilled to remove water, leaving alcohol
that is concentrated to 200 proof. Methanol, or some other denaturant, is then mixed with the pure
ethanol to make it unsuitable for potable consumption.
The following ethanol feedstocks are considered in the study: cassava, sugarcane and sweet
sorghum. Other crops, including corn and sugar beet, were discounted from consideration due to
potential conflicts with food or incompatible agro-ecological conditions. Detailed information on
agronomy, uses, environmental pros and cons, and pests and diseases are included. Working with
the World Agroforestry Centre’s (ICRAF’s) GIS laboratory, we have designed suitability maps for
each feedstock that show where they can grow and where they would be competing with existing
food and cash crops.
Biodiesel is a liquid substitute for petroleum-based diesel fuel made with vegetable oil derived from a
wide variety of oil-bearing plants such as castor, coconut, cottonseed, croton, jatropha, rapeseed
(canola) and sunflower. Biodiesel has been around since the beginning of the 20th century, but has
only recently been produced in large, commercial quantities. No vehicle modifications are required
to use biodiesel blends of up to 20% (B20), although auto manufacturers have varying biodiesel
warranty policies on what level of blend is permitted without voiding the warranty. Blends above
20% all the way up to pure biodiesel (B100) can be used in ordinary diesel engines, but may require
slight modification of older fuel lines and hoses that are less compatible with pure biodiesel.
International fuel quality and blending standards for biodiesel ensure that the fuel does not harm
consumers. Biodiesel contains about 93% of the energy content of petroleum diesel, so B5 will
achieve about 0.5% less fuel economy than ordinary diesel. The production of biodiesel involves
mixing pure vegetable oil with alcohol and caustic soda, which produces ethyl or methyl esters
(biodiesel) and glycerin. This study takes a detailed look at the following biodiesel feedstocks:
castor, coconut, cotton, croton, jatropha, rapeseed and sunflower.
History & Current Status of Biofuels in Kenya and Around the World
Section 3 of the study provides a detailed history and current status of ethanol and biodiesel in
Kenya, as well as in select countries globally and regionally. Kenya was ahead of its time in
producing and using ethanol for fuel, but abandoned its gasohol program over 15 years ago.
17 May 2008 2
Kenya’s present-day ethanol industry, which includes Agro-Chemical and newcomer Spectre
International, is marked by tremendous opportunities and significant challenges. These two
companies have a combined production capacity of 125,000 liters per day, although current supplies
of molasses – the only ethanol feedstock being used in Kenya – mean that only about half of
capacity is being used, for a total production of about 60,000 liters per day. Fulfilling the full
production capacity at the two ethanol plants would require almost the entire supply of molasses
from Kenyan sugar companies, which is not feasible given the alternative markets for molasses and
the current low productivity of sugarcane in Kenya.
Poor planning and a crumbling infrastructure are also limiting the competitiveness of sugar and
ethanol in Kenya. Thriving in an increasingly competitive global commodities market will require
the Kenyan sugar and ethanol industries to innovate and diversify, as well as to invest in more
efficient methods of production. The integrated production of sugar, ethanol and power that
Mumias Sugar Company is planning is a more efficient and sustainable model of production.
Undeterred by these developments, Spectre is moving ahead with a major expansion that will
increase its production capacity from its current 65,000 liters per day to 230,000 liters per day.
However, limitations on available land and competition with food production is almost certain to
preclude all planned ethanol production to be supplied by sugarcane, meaning that alternative
feedstocks, such as sweet sorghum, will be required. One of the greatest potential benefits of sweet
sorghum is the fact that it can thrive in drier, more marginal agricultural areas than sugarcane,
however more practical research needs to be done to maximize its economic potential in Kenya.
At the current rate of growth of petrol consumption of about 2.8% per year, Kenya is projected to
consume about 618 million liters of petrol by 2013. A national 10% ethanol blend would require
about 93 million liters, up from the 20 million liters Kenya currently produces. Revival of ethanol
fuel production in Kenya has widespread support from the stakeholders who were interviewed for
this study.
Compared with ethanol, biodiesel production in Kenya is in its nascent stage. However, a flurry of
activities among government agencies, NGOs and the private sector indicate great potential. The
vast majority of biodiesel projects currently underway or being planned involve jatropha as the main
feedstock, although projects involving other feedstocks, including castor, croton and coconut, are
also being discussed. The study provides an overview of the activities of various governmental,
non-governmental, research and private sector organizations.
Many of these projects and organizations are beginning their own research and development
activities to identify superior planting material and best practices for jatropha. Others have
expressed interest in doing so. However, these efforts should be better coordinated among
participants, donors and investors to avoid overlap and to take advantage of the relative strengths of
the various projects.
The role of certain government ministries is key. The Ministry of Agriculture, through the Kenya
Agricultural Research Institute (KARI), the Kenya Plant Health Inspectorate Service (KEPHIS) and
the Kenya Sugar Board, perhaps has the most critical role in supporting the agricultural development
of superior planting materials, silvicultural practices and models for production. The Ministry of
Agriculture should also take the lead in promoting particular biofuels crops and growing regions to
minimize the conflict with food.
17 May 2008 3
The Ministry of Environment and Natural Resources, through the Kenya Forest Research Institute
(KEFRI), the Kenya Forest Service and the National Environmental Management Authority
(NEMA) should take the lead in research for tree crops, like jatropha and croton, as well as overall
environmental and public health protection along the biofuels value chain. On the policy front, the
Ministry of Energy has convened a National Biofuels Committee, which recently released a national
strategy on biodiesel, which it is working to implement. The strategy promotes jatropha, with little
mention of other potential crops, but demonstrates strong support for biodiesel development,
including recommendations for policy and coordination of government and the private sector.
More than 30 countries around the world have launched ethanol fuel programs, with Brazil and the
United States leading the way. The European Union is the top producer of biodiesel, with about 4.5
billion liters, or about 72% of global production, in 2006. This section of the study provides an
overview of biofuels programs and policies from the following leading biofuels producers from
around the world: Brazil, Germany, India, Thailand and the United States. This section also includes
descriptions of regional biofuels activities from the following countries: Ethiopia, Malawi, Mali,
Nigeria, Senegal, South Africa, Sudan, Tanzania and Uganda.
Economic Analysis of Biofuels in Kenya
Section 4 analyzes the economics of biofuels in Kenya. In general, the economic case for biofuels in
Kenya is quite strong. Kenya currently spends about $1 billion per year in foreign currency on
imported oil. Since the early 1990s, the Kenyan Government has spent over $169 million exploring
for oil and gas, with over 30 wells drilled but no discoveries. To appreciate the potential value of
biofuels, one only needs to consider the fact that many African countries currently spend many
times more for imported petroleum than they do on health care and poverty alleviation programs.
Even if only a portion of this money were redirected towards domestic bioenergy programs, the
social and economic benefits would be substantial.
Biofuels feedstock is the primary and most expensive ingredient for biofuels production. Land
availability and agricultural practices are the main factors that determine the supply and price of
biofuels feedstock. The Study includes three feedstock production scenarios to determine potential
availability. The first considered the status quo production of feedstocks and found that enough
sugarcane is currently produced for 49 million liters of ethanol if only molasses is used and 345
million liters if all cane went into ethanol instead of sugar. The existing production of castor is
enough to produce about 1.3 million liters of biodiesel. Underexploited coconuts and croton seeds,
if linked to biofuels processors, likely could produce millions more, although detailed quantities are
not available.
The second feedstock production scenario calculates the amount of each crop that could be grown
at current yields if half of all suitable areas (according to the suitability maps) were planted.
Excluding land that is currently being used to grow other crops, enough new sugarcane could be
grown to produce between 30 and 210 million liters (depending on whether molasses or cane juice
was used). Alternatively, over 8 billion liters of ethanol could potentially be produced from sweet
sorghum and over 3 billion from cassava. Depending on which biodiesel feedstock is used, between
18 million to over 5 billion liters could be produced.
17 May 2008 4
Of course, even 50% of suitable lands would not be possible to plant with a single crop, so these
figures would have to be further reduced to come up with a more realistic estimate of what is
possible in the real world. The point is that enough suitable land outside of existing agricultural
production is available to produce at least tens, if not hundreds of millions of liters of ethanol and
biodiesel.
The final scenario calculates production if half of suitable lands were used, but at optimal yields for
each crop. Not surprisingly, the numbers are significantly higher than in the second scenario. The
lesson is that both available land and increased yield are important factors in producing adequate
supplies of biofuels feedstock to support a domestic industry.
The next part of the analysis describes the economic feasibility of producing ethanol and biodiesel in
Kenya. Ethanol has been produced in Kenya for many years from the molasses residue of sugar
production. Despite Kenya’s relatively low molasses prices, the overall cost of ethanol production
remains higher than in the other five sugarcane-based ethanol producing countries or regions
considered in this study. The current average cost of production at the two ethanol plants in Kenya
is approximately Ksh 36.5, or $0.56, per liter. The main reasons for the higher operating costs in
Kenya are poor infrastructure and the relative inefficiency of the Kenyan ethanol model.
Another factor to consider is the impact of fuel taxes on economic feasibility. There is a roughly
Ksh 30 ($0.46) per liter tax on petrol. For ethanol to be feasible in the market without any help
from the government in terms of tax reductions or subsidies, the pre-tax price of each liter of
ethanol must be less than roughly Ksh 40 ($0.61) per liter (assuming a retail pump price of ~Ksh 90
per liter and that one liter of ethanol contains about two-thirds of the energy of a liter of petrol).
The current average production cost of Ksh 36.5, or $0.56, per liter of sugarcane ethanol is barely
economically feasible as a substitute for petrol, assuming the Ksh 3.5 per liter difference between the
cost of production and the pump price is sufficient to cover the cost of transport, blending,
marketing and profits. Considering that ethanol sold as potable alcohol currently fetches at least
Ksh 50 per liter, some sort of incentive will likely be needed to encourage ethanol producers to
begin selling their product for gasohol at a cheaper price.
Little information is available on the cost of production for ethanol produced from sweet sorghum
and cassava. Using what information is available on current and projected prices, it appears that
both cassava and sweet sorghum would be too expensive to be used economically for ethanol absent
any support from the government in the form of tax exemptions or subsidies.
We have evaluated three different scales of production for biodiesel: farm scale (~180,000 liters per
year), small commercial scale (~2 million liters per year), and large commercial scale (~12 million
liters per year, which is not actually large-scale by international standards). The cost of biofuels
feedstock is a factor of the price per tonne of the oilseed, the percentage of oil that can be extracted
from the seed (known as “oil content”), and the revenue that can be collected from the seedcake
that is leftover after the oil has been extracted. Croton and jatropha appear to be the cheapest
feedstocks, although farmers have very little, if any, experience growing these two trees as plantation
crops and thus the economic assumptions regarding the price of seed and the yield per hectare are
much less certain than for the other crops considered. The next two cheapest feedstocks are
coconut and castor.
17 May 2008 5
To determine overall feasibility, the cost of production (which includes feedstock, operations and
capital costs) plus taxes must be compared to the current pump price for petroleum diesel, which is
about Ksh 80 per liter at the time of this publication. However, discounting for the lower energy
value in biodiesel, we can reduce the comparative price of petroleum diesel by 7% to Ksh 74.4 per
liter. Thus, at current retail prices, biodiesel production is not economically feasible at any scale of
production unless the tax burden is reduced or eliminated. At these levels and with the price of
diesel likely to fluctuate below its current retail price, investing in a new biodiesel venture in Kenya
seems extremely risky without some governmental support.
Markets for ethanol include alcoholic beverages, pharmaceutical and industrial applications, and fuel.
Current ethanol production in Kenya amounts to about 20 million liters per year, the vast majority
of which is exported to Uganda and the Democratic Republic of Congo for beverage use. A ten
percent ethanol blend (E10) in Kenya would require approximately 93 million liters a year by 2013.
In 2006, European countries imported 2.36 billion liters of ethanol. Closer to home, African nations
imported about 154 million liters of ethanol in 2006, with a demand that is surely to rise in the
coming years. Another potential local market is the use of ethanol in cook stoves and lamps.
Biodiesel is used for transport fuel, stationary power, farm equipment use and marine power. A two
percent blend of biodiesel (B2) into the local transport market would require about 32 million liters
of biodiesel by 2013. Biodiesel could complement, or completely displace, the use of petroleum
diesel for many stationary applications. Straight vegetable oil (SVO) that has not been processed
into biodiesel could potentially be used in some applications, such as for transport with specially
modified vehicles or for farm equipment. SVO and/or biodiesel could potentially be used as a
replacement for kerosene as the main source of light and cooking fuel in many parts of Kenya. As
indicated above, rapidly expanding markets for export of ethanol and biodiesel provide tremendous
growth opportunities for countries like Kenya, although trade restrictions, such as import tariffs,
could impede these markets.
The potential employment and income benefits of biofuels in Kenya are enormous. An additional
93 million liters of ethanol (enough for a national E10 blend by 2013) could yield about Ksh 4.65
billion ($72 million) per year to the economy and produce thousands of new farm jobs and between
500 to 1,000 new non-farm jobs. About 229 new non-farm jobs and thousands more farm-related
ones would be created if Kenya adopted a B2 policy requiring the production of roughly 32 million
liters of biodiesel by 2013.
To be sustainable and to benefit the largest number of Kenyans, any future biofuels industry should
maximize smallholder farm income by selecting feedstocks that will yield the highest return on
investment. The availability of oilseeds in large enough quantities for commercial biodiesel
production will depend on which crops farmers see as the most beneficial. Although revenues can
be calculated for each crop, based on yield per hectare and the current market price of each
feedstock, net income is more challenging. Information on the cost of production is not readily
available for all crops and will require further research. The Kenya Agricultural Research Institute
(KARI) has the capacity and the interest in conducting such important work and should be engaged
to do so as soon as possible.
Due to the overwhelming focus on jatropha by the Ministry of Energy, private farmers, investors
and NGOs, we have analyzed the potential farm income for a theoretical 50-hectare plantation. The
plantation is designed to minimize the up-front establishment costs by planting 10 hectares per year
17 May 2008 6
over the first five years. This approach would require about 12 years before the entire plantation is
fully matured. Based on projected yield and prices, it will take more than five years before the
plantation turns an annual operating profit and more than ten years before such an investment
produces a cumulative net income. However, over the long-term, such an investment would achieve
an internal rate of return of nearly 15%.
Jatropha is similar to other crops like coffee and tea that take years to mature. However, unlike
coffee and tea, that are well-understood crops with established yields and production costs, jatropha
plantation farming is still in its infancy and many questions remain. Many of the assumptions we
have relied upon, such as un-irrigated yield, could vary significantly from the experiences in India we
have borrowed from. Nonetheless, it seems nearly certain that farmers will require significant long-
term financing to develop commercial jatropha plantations. Smallholders, who do not have such
large land areas, and can provide much of the labor themselves, may begin planting on boundaries
and unused land, but may also require significant economic support to develop smaller jatropha
plantations.
Kenya spent $983 million, or 5.6% of gross domestic product, importing petrol and automotive
diesel in 2006. If Kenya offset 10% of petrol imports and 2% of diesel imports with locally
produced biofuels by 2013, it would keep a total of $71 million per year from flowing overseas (at
current consumption levels, assuming an average price of $90 per barrel of oil).
The potential reduction in greenhouse gas emissions from biofuels could theoretically provide an
additional revenue stream for some projects. There are two distinctive markets for carbon credits:
the mandatory market created through the Kyoto Protocol of the United Nations Convention on
Climate Change (UNFCCC), and market for voluntary credits. The former is more stringent and
restrictive, but generally yields a higher price per tonne of carbon. Conversely, the latter is more
flexible and easier to gain compliance with, but fetches a lower price, (though the price has increased
steadily due to the value placed on the livelihood aspect of voluntary carbon trade). The only type
of biofuels project that has been approved for carbon credits within the CDM is for biodiesel made
from waste vegetable oil. Thus, income from carbon credits is unlikely to provide much, if any,
added incentive for project developers and investors.
Regulatory & Fiscal Analysis
Section 5 includes a comprehensive review of current laws, policies, regulatory requirements and
taxes as they apply throughout the biofuels production life cycle. The Energy Act of 2006 mandates
that the government pursues and facilitates the production of biofuels, but does not articulate how
this shall be accomplished. Under current law, biofuels must comply with local or international fuel
quality standards developed or adopted by Kenya Bureau of Standards, although it is unclear
whether this would apply to biofuels produced and consumed at the farm level and not for
commercial sale. A standard exists for ethanol, but not yet for biodiesel. A petroleum license is
required to blend biofuels with petroleum products, but again it is unclear whether this would apply
to a farm-based operation that was consuming all of what it produced.
Health, safety and worker protections are also important considerations for any producer or seller of
biofuels, and any associated laws or regulations must be complied with. Existing regulations
pertaining to these issues under the Energy and Petroleum Acts presumably would govern the
17 May 2008 7
distribution and sale of blended biofuels as long as the blended fuels conform to the relevant
standards.
Many aspects of biofuels production have direct and indirect environmental implications that would
require environmental impact assessments. Laws and regulations governing air and water pollution,
hazardous chemicals and waste disposal must also be adhered to. Growing an adequate supply of
biofuel feedstock is an essential component of the production process. This may require the
purchase and/or importation of seeds, which are activities regulated by the Seeds and Plant Varieties
Act and the Plant Protection Act.
Issues of property law and equipment import and purchase are also important components of
biofuels production and require attention to the laws and regulations in those areas. Finally, this
section describes the current fuel taxes that apply to petrol (about Ksh 30 per liter) and diesel (about
Ksh 20 per liter), their implications for biofuels and how they can be reduced or eliminated to
promote the industry.
Environmental and Social Impact Assessment
Section 6 reviews the positive and negative environmental and social impacts that biofuels can have.
In general, such impacts depend on the type of feedstocks used and the method and scale of
production. The air quality and health benefits of biofuels can be quite significant. Air emissions
from ethanol are lower than those from petrol in all six types of air pollution listed. For biodiesel,
all major air pollutants are also lower than for petroleum diesel, except for nitrogen oxide (NOx)
emissions, which are slightly higher. Although biofuels may produce much lower emissions from
exhaust, emissions from other sources along the life cycle must also be taken into account.
Biofuels present an opportunity to help mitigate climate change by reducing carbon dioxide (CO2)
emissions from fossil fuels because the carbon that is released into the atmosphere during the
combustion of biofuels is equivalent to the amount of carbon that is absorbed during plant growth
minus the amount of fossil fuels used for transport and production. These climate benefits can be
commoditized and sold as carbon credits through the CDM or the voluntary carbon market. Similar
to the discussion above on other air emissions, the climate benefit of a particular biofuel is
dependent on the scale and mode of production, as well as the type of feedstock that is used.
These potential GHG benefits may overlook the emissions resulting from land-use change that is
caused by the direct growing of biofuels crops, or the indirect conversion of forest and grasslands to
agricultural production resulting from the need to increase food production that has been displaced
by biofuels crops. The release of GHGs from land-use change that is caused by growing biofuels
feedstocks could undermine purported climate benefits and significantly reduce their overall
environmental benefits. The use of waste materials, marginal lands and reforestation projects are
essential to maximizing overall GHG emission reductions of biofuels compared with fossil fuels.
An issue closely related to GHG emissions is the amount of energy it takes to produce each unit of
biofuels, known as net energy balance or energy return on investment. Different studies show a
range of net energy balance for biodiesel and ethanol, although most are positive, meaning more
energy is produced than used in the manufacturing process.
17 May 2008 8
Biofuels crops may help to prevent soil erosion and reclaim marginal lands for agricultural use. Of
course, depending on the crops and the scale of production, many of these potential gains in land
use can just as easily be undone by, for example, the deforestation of tropical rainforests to make
way for industrial-scale palm oil plantations. Large plantations on new agricultural lands can also
push native plant and animal species out of the area, thus reducing biodiversity and overall
ecosystem health. Another potential danger is the risk of invasiveness with some crops, such as
castor, jatropha and switchgrass.
The conflict between food and biofuels is real. It is beyond dispute that food prices of major
staples that are also being used as feedstocks for biofuels production have increased dramatically
over the past several years as biofuels production has boomed. What is not entirely clear is the
causal link between the two and the best way to minimize the conflict in different parts of the world.
On the one hand, the diversion of corn from food in the United States, which is about 40% of
global production, and oilseeds in Europe and Southeast Asia could be the main driver for the rise in
global commodity prices. However, as the U.N. Food and Agriculture Organization reports, most
short-term price increases in food is more the result of increased demand for food from many of the
world’s fastest expanding economies, like China and India, as well as the high price of petroleum,
which affects everything from transport to the price of agricultural inputs like fertilizer and
pesticides. The success of sugarcane-based ethanol in reducing the price of fuel in Brazil may
actually be helping to bring food prices lower.
One very important consideration when selecting potential feedstocks for biofuels production is
whether current domestic production levels are sufficient to meet domestic demand for food and
animal feed. However, increasing imports of some foods due to increased biofuels production also
may not be such a bad thing, especially if the domestically produced crop can fetch more value as a
biofuels feedstock than a food crop and the local food market can meet demand at affordable prices.
Another reason for considering using an edible crop for biofuels is if the domestic cost of
production for that crop cannot compete in global or regional markets. As long as Kenyan sugar
companies enjoy protective tariffs that enable them to charge about twice the price for imported
sugar – Ksh 53,540 per tonne compared with Ksh 28,874 per tonne for imported sugar – then it
makes more economic sense to continue producing sugar as the primary product, with the molasses
by-product used for ethanol. However, if and when protective tariffs disappear, then the ethanol
alone would make more economic sense as the amount of income per hectare for the co-production
of sugar and ethanol would drop to Ksh 240,505 compared with Ksh 248,500 for ethanol alone.
The environmental sustainability of biofuels is at the center of a global debate over whether they are
as green as first advertised. Various sustainability standards have been developed by different
organizations with similar features, although no unifying global standard has yet been adopted.
Laws promoting biofuels can also help to ensure sustainability. The E.U., which has set an
ambitious goal of 5.75% biofuels by the end of 2010, is now considering banning biofuels derived
from crops grown on recently cleared forests, wetlands or grasslands.
While most of the efforts towards more sustainable biofuels discussed above are laudable and much
needed, many hurdles remain to their successful adoption and implementation. Like other similar
standards, the devil is in the details. Verification, compliance and enforcement are also keys to
success. Without verifiable assurances that the standards are being adhered with regard to specific
batches of biofuels delivered and consumed, then the standard itself is meaningless. Biofuels
17 May 2008 9
sustainability standards in Kenya and the rest of the world would do well to copy many of the
mechanisms that have been developed for other similar processes, such as the Forest Stewardship
Council’s system for certifying wood products and the Gold Standard for verified GHG emissions
reductions.
HIV/AIDS can have a deleterious affect on biofuels production by depleting the agricultural labor
pool due to premature death and re-occurring periods of illness. This can incapacitate agricultural
production and rural livelihoods. The impact of high rates of HIV in the community is exacerbated
by the fact that those affected are disproportionately between the ages of 15 and 49, the heart of the
labor force. Conversely, the introduction of biofuels cash crops to agricultural communities affected
by HIV/AIDS could also have many positive impacts. For example, increased income from the
sale of cash crops could reduce the need for woman to engage in unprotected sex in exchange for
food and money. However, the labor intensity of different potential biofuels feedstocks should be
taken into consideration in cases where large portions of the local population may be in a weakened
physical state.
Roadmap & Recommendations
With the right combination of governmental support, private sector entrepreneurship and NGO
outreach, Kenya could become the biofuels powerhouse of East Africa and beyond. Within five
years, Kenya could be blending 10% ethanol (E10) and 2% biodiesel (B2), plus providing surplus
production for stationary power and exports. Biofuels could revitalize rural areas, like Nyanza and
Western Provinces, and provide an engine of growth throughout the country. Such a program could
also provide a model for the sustainable production of biofuels to counter the increasingly
unsustainable models being pursued by large industrialized countries. However, achieving these
goals will take a concerted and coordinated effort by government, the private sector, research
institutions and NGOs.
A combination of feedstocks would be required to achieve these targets. For ethanol, the logical
choices based on availability of land, yield and economics are sugarcane and sweet sorghum. Over
58 million liters could be produced if 15,000 hectares of new land were dedicated to sugarcane
(16.5% of suitable land that is not currently being used for food or cash crops) and a portion of
current sugarcane were diverted to full ethanol production. Another 34.6 million liters could come
from sweet sorghum planted on 24,700 hectares (1% of suitable new land). A combination of
castor, coconut, croton, jatropha, rapeseed and sunflower would require about 50,000 hectares of
land, some of which is already planted, to produce 32 million liters of biodiesel per year.
The Ministry of Energy’s recently released biodiesel strategy makes a number of prudent
recommendations to promote and develop the biodiesel industry in Kenya. Several key aspects of
the following roadmap incorporate these recommendations from the Ministry, including the
production of certified seeds, the establishment and upgrading of blending facilities, myriad aspects
of research and development, and the creation of pilot biodiesel production plants. The authors of
this study appreciate the Ministry’s input and support.
! Help develop the value chain for ethanol and biodiesel production by:
o Providing agricultural assistance to farmers;
o Supporting programs, such as irrigation, to improve yields;
17 May 2008 10
o Improving the transport infrastructure;

o Enabling cogeneration of ethanol at sugar plants and the use of alternative
feedstocks at stand-alone ethanol plants;
o Supporting farm-based biodiesel production;
o Investing in research to develop optimal seeds and management practices for new
crops like croton and jatropha; and
o Testing different biofuel blends in various potential applications, including vehicles
and generators.
! Design and implement an appropriate regulatory and fiscal framework.
o Establish specific goals for a National Biofuels Program, such as an E10 and B2 by
2013.
o Select, empower and fund a lead agency to coordinate disparate government agencies
and enable the government to speak with a unified voice on biofuels. The Energy
Act provides a mandate to the Ministry of Energy to take the lead on defining a
national biofuels policy, which it has already begun to do through the formation of
the NBC. Because biofuels implicate many sectors that fall outside of the Ministry
of Energy’s mandate, it makes sense to establish a high-level task force of the various
interested ministries, including: Energy, Agriculture, Environment & Natural
Resources, Lands, Water and perhaps others. All other potentially affected
government agencies, representatives from the business community, NGOs and
development partners should also be consulted thoroughly. The most sensible place
to locate the National Biofuels Programme is within the Renewable Energy
Department at the Ministry of Energy, or with the creation of a new division.
Additional personnel and resources will be crucial for this new Programme to
flourish.
o Create a transparent and inclusive process of defining the specific strategy and
measures for encouraging the production and use of ethanol and biodiesel.
o Implement policies that promote biofuels production and protect consumers,
workers and the environment. The regulatory and fiscal review contained in this
Study can be used as the basis of the reforms.
o Adopt a blending mandate that specifies the amount of ethanol and biodiesel that
should or must be blended by a certain date or dates. As described above, E10 and
B2 could serve as reasonable goals.
o Design fuel quality and blending standards. KEBS must establish or revise fuel
quality and blending standards for both ethanol and biodiesel based on the blending
mandate and existing standards in Kenya and internationally.
o Designate priority feedstock crops. Based on economic, agronomic, social and
environmental criteria and analysis, optimal crops should be selected for biofuels.
For ethanol, sugarcane and sweet sorghum seem to make the most sense; and for
biodiesel, castor, coconut, croton and jatropha should be emphasized.
o Identify and certify optimal seeds for the priority feedstock crops. KEPHIS, KARI
and/or KEFRI should be responsible for identifying, testing and certifying high
yielding seeds that are adapted to the different agro-ecological zones in which they
might be grown.
o Review and revise all licensing requirements along the entire biofuels value chain
where necessary to protect consumers, workers, communities and the environment.
If possible, the licensing requirements under the various laws and regulations
17 May 2008 11
discussed above should be integrated, thus eliminating unnecessary and onerous

regulation.
o Adopt tax incentives to promote the new biofuels industry. Fuel taxes can make or
break the feasibility of biofuels, so some combination of tax exemptions or subsidies
will almost certainly be required to promote the industry. Additionally, farm-scale
production, where the fuel being produced is not being sold, should also be exempt
from fuel taxes, as the cost of production of biodiesel at the farm-scale would be
prohibitively expensive if taxed fully.
Government revenues can be protected even as taxes are reduced or eliminated for
biofuels by accounting for the increased revenue from new biofuels businesses
and/or marginally increasing the existing fuel tax on petroleum products to make up
for exempted biofuels. For example, a Ksh 0.5 per liter increase in the roughly Ksh
20.5 fuel tax on diesel would cover the loss of revenue if biodiesel were completely
exempted from fuel taxes up to a national B2 blend. Neither consumers nor the
government would be affected by the change, although biodiesel production would
become a much more attractive investment for project developers and farmers alike.
! Develop and implement sustainability standards for biofuels that are stringent but
achievable.
o The use of various crops that can grow in semi-arid areas combined with
sophisticated mapping to minimize conflicts with existing food production areas,
would enable large quantities of biofuels feedstocks to be produced in addition to,
rather than at the expense of, existing food production.
o The reliance on tree crops like croton and jatropha could be combined with
reforestation and afforestation projects, as well as efforts to reclaim marginalized
lands.
! Support pilot projects and research in the areas of agronomy, fuel and blending standards,
production technology and processing, markets and consumer use.
! Inform and create awareness among decision makers and the public.
17 May 2008 12
2. OVERVIEW OF ETHANOL & BIODIESEL
This chapter provides a detailed introduction to the two main types of liquid biofuels: ethanol and
biodiesel.5 Use of straight vegetable oil as a diesel replacement is discussed in the section on
biodiesel. We have included information on efficiency, performance and quality; production
processes; potentially viable feedstocks for Kenya; and second-generation biofuels. Appendices A
and B contain national-scale suitability maps for each feedstock, including conflicts with existing
land-uses.
2.1 ETHANOL
Ethanol, also known as ethyl alcohol or grain alcohol, is a liquid fuel that can be produced from a
variety of sugars and starch containing crops, such as grains. Examples include: cassava, maize,
sugar beet, sugarcane, sweet sorghum and wheat. Cellulose from switch grass, biomass waste and
other woody fibers can also be used, although at a premium production cost. Ethanol is produced
for fuel, alcoholic beverages, and for various medical, pharmaceutical and industrial uses (see Section
4.3 for more specific information on existing and potential markets for ethanol in Kenya).
Ethanol was first used as an automotive fuel

starting in 1908 with the Model T Ford.7 By
1938, an ethanol plant in Kansas was supplying
over 2,000 service stations with about 68
million liters a year.8 Interest in ethanol as a
fuel declined around World War II as concern
grew over using food for fuel and as large
quantities of cheap petroleum-based fuels
became readily available.
For the past thirty years, ethanol has been used

as an octane-enhancing additive to reduce air Photo 1: Spectre International’s ethanol plant in Kisumu.6
pollution. Kenya has been producing ethanol
for over twenty years in relatively modest quantities and, for a period in the 1980s, was blending it
into the petrol distribution network as “gasohol” (see Section 3.1 for a detailed history and current
status of ethanol in Kenya). Over the past decade, ethanol production worldwide has expanded
exponentially, rising over 25% in just the past few years alone.9 The United States and Brazil are by
far the two largest producers of ethanol fuel, with over 70% of the world’s production.10
2.1.1 Performance, Efficiency & Quality
There are two types of ethanol that can be used for transport: hydrous and anhydrous. As the
names indicate, the former contains water (about 4% of volume) and the latter has had nearly all of
the water removed. Hydrous ethanol can be used for fuel, but only in vehicles that have been
specially designed for running on it. Brazil used mainly hydrous ethanol in its transport sector in the
early years of its ethanol program (see Section 3.3.1 for more on Brazil’s ethanol program). Most
ethanol produced today is anhydrous.
17 May 2008 13
Anhydrous ethanol can be blended with petroleum-based gasoline at different levels. Low-level
blends of up to 10%, referred to as E10, can be used in automobiles without any engine
modification and are approved for use by all major automobile manufacturers.11 Some vehicle
modification is required to operate on ethanol blends above E10 due to the fuel’s higher oxygen
content.12 Blends containing between 10% (E10) and 85% (E85) ethanol are in wide use in the
United States, Brazil and other parts of the world. Automakers are now mass-producing “Flex-
Fuel” vehicles (FFVs) that can run on pure hydrous ethanol or any blend of anhydrous. Even the
Indy Racing League, home of the world-famous Indianapolis 500 motor race, recently adopted
ethanol as its fuel of choice.13
The energy content of ethanol is about 34% lower than that of petroleum
gasoline, although this may vary slightly depending on the feedstock used to
produce it.15 This means that a liter of E10 will have about 93.4% of the
energy, and thus fuel economy, as a liter of straight petrol fuel. Thus, it is
important to discount the price, and any associated taxes, of ethanol blends
in proportion to the percentage of ethanol contained therein to account for
the reduction in energy content in the fuel (see Section 4.2.1). Photo 2: E85 fuel pump.14
Globally-recognized standards for ethanol fuel quality have been established by the American
Society of Testing and Materials (ASTM). The Kenya Bureau of Standards (KEBS) has also adopted
both an ethanol fuel standard and a specification for and E10 blend (see Appendix I for the detailed
ASTM D-4806 and KEBS standards). The KEBS standard was originally adopted during Kenya’s
now defunct gasohol program and almost certainly requires updating. These standards help to
assure original equipment manufacturers and consumers of the quality of fuel they are using in their
vehicles and other equipment. The fuel standards also help to prevent damage to vehicles by
ensuring standardized quality. Relying on these standards, many original equipment manufacturers
have adopted maximum blends of biofuels they will allow to be used in their vehicles without
voiding warranties.
2.1.2 Ethanol Production Process & Technology
The manufacturing process for ethanol from sugar crops and grains is nearly identical to that of
producing potable alcohol (see Figure 1). It involves first separating the sugars from the biomass
and then fermenting them in the presence of yeast to produce alcohol and carbon dioxide.
Producing ethanol from cellulose, a process that is receiving significant attention in research
laboratories, but is not yet commercially viable, requires an additional step that first breaks down the
fibers to extract the sugar.
There are generally two production methods for converting corn or other starchy grains into
ethanol: dry milling and wet milling.16 Dry milling grinds the entire kernel or grain into flour, or
“meal,” which is then slurried with water and enzymes to convert the starch to dextrose, a simple
sugar. This process is called saccharification. Ammonia is added to control pH and as a nutrient for
the yeast and the mixture is heated to reduce bacteria. The mash is then moved into a fermenter,
where yeast is added to convert the sugar to ethanol and carbon dioxide. The resulting mixture,
called “beer” is then transferred to a distiller, where the ethanol is dehydrated and concentrated to
200 proof. The waste, called “stillage,” is then processed to create wet or dried distillers grains,
17 May 2008 14
which can be used for animal feed, biogas generation or fertilizer. The carbon dioxide can be
captured and used for carbonation in the beverage industry.
Wet milling first soaks the grain in water and sulfurous acid to separate out the corn oil, fiber, gluten
and starch. The oil, fiber, and gluten are used for various products including human and animal
feed, and other products. The starch is then either fermented into ethanol similarly to the process
described above, or converted into corn starch or corn syrup, which are valuable ingredients in many
foods.
Producing ethanol from sugarcane, sorghum and other sugar crops is a simpler, cheaper and more
efficient process, as the sugars are readily extracted from the crop without the pre-processing
described above. The crop is crushed into sugar juice, crop residue (called “bagasse”) and, with
crops such as sweet sorghum, grain. The sugar juice can be directly fermented into ethanol or first
processed into crystallized sugar and molasses. The molasses (which will have differing sugar
content levels depending on how much crystallized sugar has been extracted) is then used for
ethanol production, as well as other agricultural and industrial uses. The bagasse is burned for
energy, which is often sufficient to operate the plant and produce excess to be sold back into the
electricity grid. The grains (from sorghum) can be processed into food or converted into ethanol
using the pre-processing saccharification step described above. A sugarcane-ethanol plant can
increase or decrease the volumes of production of sugar and ethanol depending on the variable
market demand of each product.17
FIGURE 1: ETHANOL PRODUCTION PROCESS
2.1.3 Ethanol Feedstocks
The following fact sheets provide background information on potentially viable ethanol feedstocks
in Kenya. We have chosen to focus on cassava, sugarcane and sweet sorghum due to the history of
17 May 2008 15
production in Kenya, climatic suitability and other factors. Many other feedstocks can be used to
make ethanol, including maize and potatoes, but we have chosen to avoid crops that would present
the greatest threat to food security. Information on uses, diseases and pests, environmental impacts
and agronomy are included in the fact sheets.
In conjunction with the International Centre on Agroforestry’s (ICRAF’s) GIS laboratory, we have
developed maps that show where each feedstock is suitable to grow in Kenya and where they would
conflict with existing agricultural production (both food and cash crop). As a general note, the maps
are comprised of national-scale data layers that are useful for policymakers and the general public,
but should not be relied upon by developers of specific projects without more detailed assessments.
Some of the land that is considered “suitable” on the maps might conflict with current land uses,
like towns and roads, or would be impractical due to transport and/or security restrictions.
Significant portions of “suitable” lands also serve other uses, such as wildlife habitat and pastoral
grazing, so may be unavailable to grow biofuels crops. We have discounted the acreage for each
feedstock by 50% in each category to account for conflicting land uses.
17 May 2008 16
2.1.3.1 Cassava
Scientific Name: Manihot esculenta. Local Names: Cassava, manioc, manihot, yucca, muhogo.
Temp Rainfall Maturity Time Rainfed Yield Ethanol Yield

Alt. (m) Soil Types
(ºC) (mm) (mos.) (T/ha/yr) (L/tonne)
Light sandy loams, medium
16-3018 0-150019 580-150020 6-9 9.621 160-18022
fertility, well drained.
Photo 3: Cassava plantation.23
Photo 4: Recently harvested cassava.24 Map 1: Cassava Suitability with Food & Cash Crops
Cassava Suitability Areas in Kenya in Hectares25
Overall Suitability w/o Suitable w/o Protected Suitable w/o Protected, Food,
Suitability Protected Areas & Food Crop Areas Cash Crop Areas
5,161,025 4,150,316 2,191,765 2,082,978
Uses: The most important use of cassava is as a staple foodstuff, where it is ground into a type of
flour and used as a thickener in soups and puddings in the form of tapioca. It is used as a base in
canned foods, ice cream, biscuits, confectionary and pharmaceuticals. Starch, a product of cassava,
is used in food production, pharmaceuticals, paper manufacturing and textile industries. Other
industrial uses of the tuber are in the production of alcohols and manufacture of adhesives.26
Agroforestry Potential: Studies have shown that intercropping cassava with tree crops can greatly
reduce erosion and increase soil cover, although this could come at the expense of soil fertility. One
particular study showed that when intercropped with eucalyptus or leucaena, soil loss was 70%-80%
17 May 2008 17
less than when cassava is grown by itself. Runoff and soil loss were effectively reduced when
cassava was grown on staggered soil mounds along with eucalyptus and leucaena, due to better
canopy coverage of the soil surface. Canopy coverage by eucalyptus and leucaena was restricted by
harvesting, thus reducing their erosion and runoff control potential.27
Environmental Pros & Cons: Cassava is non-invasive and highly tolerant to drought but
susceptible to water logging and salinity. It is also suitable for mechanization on large scale.
Cassava’s requirements are few and as a consequence it is frequently cultivated where few other
crops could survive. It has no definite maturation point so the roots can be stored in the ground for
up to 24 months if the grower wants to use the fresh roots at a later time. Cassava is a staple food
crop for many and thus could pose a conflict if diverted for ethanol production. The plant does not
produce enough vegetation to cover the soil well. Thus the production of cassava can result in
considerable soil erosion during the entire life of the plant. Because little else grows on such soils,
the erosion often continues well after the cassava is harvested. Production can also leads to loss of
biodiversity. Processing, especially industrial processing, can lead to deposition of cyanide and
organic matter on the soil and in water sources, and dust and foul odors in the air.28
Pests & Diseases: Major pests include the cassava hornworm (Erinnyis Ello), cassava mites
(Mononychellus tanajoa), thrips (Frankliniella williamsi), gall midges (Jatrophobia brasiliensis), root knot
nematodes, mealy bugs, scale insects, variegated grasshopper, white flies, termites, spider mites,
rodents, baboons, monkeys and wild pigs. Major diseases include the African mosaic virus, whose
causal agent is as yet unknown, cassava stem rot (various pathogens), leaf spot, bacterial blight,
brown spot, brown streak virus disease and cassava anthracnose disease.29
17 May 2008 18
2.1.3.2 Sugarcane
Scientific Name: Saccharum officinarum. Local Names: Miwa.

Alt. (m) Soil Types
70-120; ’06 Actual: 70 (cane juice);
12-3830 <150031 1000-180032 18-2433 Loam to clay.34
70.89.35 10 (molasses) 36
Photo 5: Sugarcane plantation.37
Photo 6: Cut sugarcane.38 Map 2: Sugarcane Suitability with Food & Cash Crops
Sugarcane Suitability Areas in Kenya in Hectares39
866,620 825,922 171,783 93,611
Uses: Sugar manufacture (from cane juice); power and steam generation (from bagasse); potable
alcohol, power and industrial/fuel alcohol, methane/biogas (from molasses). Sugarcane is also
chewed in its raw state. Ethanol can be produced either from cane-juice or molasses.40
Agroforestry Potential: Can be intercropped with suitable multipurpose trees using contour
hedgerows to make production and conservation possible in non-mechanized areas.41
Environmental Pros & Cons: Can support climate-friendly sustainable development, growing
sugarcane can be an important carbon sink; by-products like molasses and bagasse are important
17 May 2008 19
energy sources with significant environmental advantages. Loss of biodiversity and conversion of
primary forest habitat, soil erosion and degradation, agrochemical use, organic matter from
processing effluents can affect aquatic life.42
Pests & Diseases: Sugarcane borer (Diatraea sacchari), sugarcane smut (Ustilago scitamine), mosaic,
ratoon stunting, pineapple diseases.43 Insect pests of economic importance are sugarcane scales and
termites. Sugarcane scales may cause a yield loss of up to 40%. Nematodes also cause significant
economic losses. Weeds can cause between 30-100% loss in yield. The major weeds found in
sugarcane producing zones include striga, amaranthus, datura, tagetes species and the narrowed leaved
types such as couch, Johnson, nut sedge and Bermuda grasses.44
17 May 2008 20
2.1.3.3 Sweet Sorghum
Scientific Name: Sorghum bicolor. Local Names: Mtama.

Alt. (m) Soil Types
1.2 (grain);
17-4045 <0-250046 350-150047 3-648 Pellic vertisols. 4050
30-40 (stalk) 49
Photo 7: Sweet sorghum plantation.51
Photo 8: Sweet sorghum stalk.52 Map 3: Sweet Sorghum Suitability with Food & Cash Crops
Sweet Sorghum Suitability Areas in Kenya in Hectares53
13,198,257 11,063,652 6,305,979 5,897,124
Uses: Sweet sorghum can be used for human food (cereal, snack food, baking and brewing),
ethanol production, animal fodder and the manufacture of wallboard and biodegradable packaging
material. Sweet sorghum produces edible grains and a sweet stalk that is suitable for ethanol
production, which can help mitigate the potential conflict with food that occurs with other
feedstocks.54
Environmental Pros & Cons: Shorter growth period of 3-5 months compared to about 12-18
months for sugar cane. While it is sensitive to low temperatures, it can withstand temperature
fluctuations better than sugar cane. Two crops can therefore be produced per year. Sugarcane is
17 May 2008 21
propagated from cuttings, requiring 4,500-6,000 kg/ha of cane. Sweet sorghum, on the other hand,
is propagated from seed, requiring a minimum of 4-7.5 kg/ha of seed. The quantity of water needed
by sweet sorghum is only one third that needed by sugarcane. It has high water use efficiency and is
drought tolerant. It also tolerates some degree of salinity, alkalinity and poor drainage and therefore
can be grown on a wide range of soils. Certain difficulties and limitations make sugar produced
from sweet sorghum more expensive than that from sugarcane or sugar beet.55
Pests & Diseases: Leaf diseases, including northern corn leaf blight, maize dwarf mosaic and
anthracnose, which can be problems in areas with high rainfall and humidity. Charcoal rot, which
develops under hot, dry conditions after the plants have bloomed, can cause serious lodging
problems. Major insect pests include wireworms, seed beetles, cutworms, aphids (especially
greenbugs), sorghum midge, chinch bugs, spider mites, armyworms and earworms. Greenbugs are
probably the most damaging sorghum insect pest. Aphids feed on the underside of leaves and inject
toxins that destroy leaf tissue. Bird damage may also cause serious losses.56
2.1.4 Second-Generation Ethanol Production
Sometimes referred to as second-generation biofuels, ethanol

made from cellulose such as switchgrass has heretofore been
limited to the research laboratory.58 The process involves
using chemicals to extract sugars from the woody fibers
contained in waste biomass. The currently uncompetitive
cost of production for cellulostic ethanol is likely to change
thanks to large government subsidies, especially in the
United States where the Department of Energy is providing
$385 million to six biorefineries.59 The plan envisions the
Photo 9: Switchgrass plantation.57
production of nearly 500 million liters of cellulostic ethanol
over the next several years and the development of the
technology to become self-sustaining without subsidies thereafter. Such technologies could one day
in the future become a key part of ethanol production in Kenya that does not depend on food crops
for feedstock. However, that day is unlikely to come anytime in the next five to ten years, at the
earliest.
2.2 BIODIESEL
Biodiesel is a liquid substitute for petroleum-based diesel fuel made using vegetable oil derived from
a wide variety of oil-bearing plants such as castor, coconut, croton, jatropha, rapeseed (canola), and
sunflower. Waste vegetable oil can also be used for biodiesel. Unlike ethanol, which has several
markets aside from energy, biodiesel’s only use is as an alternative source of fuel for transport and
stationary power.
The use of vegetable oil derived fuels has been around for over a century. Rudolph Diesel, the
inventor of the compression diesel engine, routinely tested vegetable oils as fuel.60 At the 1900
World Exhibition in Paris, the French Otto Company unveiled a diesel engine using 100% peanut
oil.61 The use of straight vegetable oil in diesel engines has been promoted as a cheaper alternative
to processing the vegetable oil into biodiesel, but it is generally not considered a viable alternative
for large-scale or long-term use.62 It is possible to use straight vegetable oil, although vehicle
17 May 2008 22
alterations such as a pre-heater are necessary, and performance and wear on the engine and fuel lines
is also a question. Given these limitations, we have chosen to focus on transesterified biodiesel
instead of the use of straight vegetable oil.
2.2.1 Performance, Efficiency & Quality
Biodiesel can be blended with petrol diesel in any proportion, with B5 (5% biodiesel) and B20 (20%
biodiesel) being the most common. No vehicle alternations are necessary if blended at levels of B20
or lower, although original equipment manufacturers have varying policies approving different
blends for use in their vehicles (see Appendix E for a listing of auto manufacturers’ biodiesel
policies). Blends up to B20 have not shown significant adverse effects on engine performance or
wear.63 However, blends higher than B20, and in particular pure biodiesel, can soften and degrade
certain types of elastomers and natural rubber components such as fuel hoses and seals.64 The use
of low sulfur diesel blends in recent years has caused manufacturers to switch to components that
are also more suitable for use with biodiesel.65 Incompatible components in older vehicles can also
be replaced.66
Biodiesel performs similarly to petrol diesel in terms of fuel consumption, horsepower, torque, and
haulage capacity.67 According to the United States Department of Energy, biodiesel is “safe,”
“biodegradable,” and “by several important measures…performs better than petroleum diesel.”68
One study tested the use of 50% biodiesel blends over a 12 year period in a variety of vehicles
without any appreciable adverse impact on the vehicles’ performance or wear.69 In particular, the
lubricity of biodiesel is higher than that of petroleum diesel, which helps reduce engine wear.70 In
climates colder than nearly all of Kenya, biodiesel can gel faster than petroleum diesel, which can be
prevented with the use of fuel additives.71 Biodiesel has 93% of the energy of petroleum diesel.72
This means that B5 will reduce fuel economy by about one half of one percent, and B20 by about
two percent.
Globally recognized standards for biodiesel

fuel quality have been established by the
ASTM and the European Union (see
Appendix II for the detailed ASTM and
EN biodiesel fuel standards). These
standards help to assure consumers of the
quality of fuel they are using in their
vehicles and other equipment. The fuel
standards also help to prevent damage to
vehicles by ensuring standardized quality.
Relying on these standards, many original
equipment manufacturers have adopted
Photo 10: Eurofueltech CR2400 biodiesel reactor.73
maximum blends of biofuels they will
allow to be used in their vehicles without
voiding warranties. For example, Chrysler recently announced that it intends to endorse the use of
B20 in its diesel vehicles once ASTM finalizes its proposed standard for B20 in early 2008.74
17 May 2008 23
FIGURE 2: BIODIESEL PRODUCTION PROCESS
2.2.2 Biodiesel Production Process & Technology
Through a chemical reaction called transesterification, vegetable oil is combined with alcohol
(methanol or ethanol) and a catalyst, such as caustic soda (sodium hydroxide), to produce biodiesel
(methyl or ethyl esters) and glycerol. Approximately one liter of biodiesel is produced for every liter
of vegetable oil fed into the process. There are two types of biodiesel production processes: batch
and continuous. Both processes rely on the basic chemical reaction described above, although batch
reactors are generally used for smaller levels of production, while continuous reactors are employed
for larger commercial plants.75
The two main byproducts of biodiesel manufacturing – glycerol and seedcake – have value that help
to reduce the overall cost of production. Glycerol can be processed into soap, burned for energy or
composted. However, before glycerol can be used for soap or other industrial processes, the
impurities introduced during the biodiesel manufacturing process must be separated from the
glycerin through a refinement process. Burning glycerol for energy also poses environmental risks if
not done at high enough temperatures due to the release of a toxic air pollutant called acrolein.76 If
the feedstock is an edible crop, like rapeseed, the seedcake can be used for animal feed. If the
feedstock is inedible, like jatropha, the seedcake can be used for fertilizer or biogas generation.
2.2.3 Biodiesel Feedstocks
The following fact sheets provide background information on potentially viable biodiesel feedstocks
in Kenya. Various factors, such as the history of production in Kenya and climatic suitability have
17 May 2008 24
led us to focus on the following biodiesel feedstock crops: castor, coconut, cotton, croton, jatropha,
rapeseed and sunflower. Many other biodiesel feedstocks can be used, including palm and soya, but
we have chosen to avoid crops that would present the greatest threats to competing land-uses and
food security. Information on uses, diseases and pests, environmental impacts and agronomy are
included in the fact sheets.
In conjunction with ICRAF’s GIS laboratory, we have developed maps that show where each
feedstock is suitable to grow in Kenya and where they would conflict with existing agricultural
production (both food and cash crop) (see Appendices A and B). As a general note, the maps are
comprised of national-scale data layers that are useful for policymakers and the general public, but
should not be relied upon by developers of specific projects without more detailed assessments.
Some of the land that is considered “suitable” on the maps might conflict with current land uses,
like towns and roads, or would be impractical due to transport and/or security restrictions.
Significant portions of “suitable” lands also serve other uses, such as wildlife habitat and pastoral
grazing, so may be unavailable to grow biofuels crops. We have discounted the acreage for each
feedstock by 50% in each category to account for conflicting land uses.
17 May 2008 25
2.2.3.1 Castor
Scientific Name: Ricinus communis. Local Names: Castor oil plant, castor bean.
Temp Rainfall Maturity Time Biodiesel Yield

Alt. (m) Soil Types Yield (T/ha/yr)
(ºC) (mm) (mos.) (L/tonne)
400- Well drained friable, 0.23 (rainfed) 81
15-3977 0-2,00078 5-1080 44883
2,00079 sandy loam. 1.2 (irrigated) 82
Photo 11: Castor plants fruiting.84
Photo 12: Castor beans.85 Map 4: Castor Suitability with Food & Cash Crops
Castor Suitability Areas in Kenya in Hectares86
12,057,692 10,424,004 7,092,892 6,818,810
Uses: Castor has many industrial, medicinal and automotive uses, including: aircraft lubricants,
hydraulic fluids, explosives, dyes, nylon, sebacic acid, placticizers, heavy duty automotive greases,
coatings and inks, surfactants, polyurethanes, soaps, polishes, flypapers, paints, varnishes, fibre,
insecticide, repellent and purgatives. Castor is also increasingly being promoted for biodiesel due to
its high oil yield and relatively low water requirements. Cellulose from the stems is used for making
cardboard and paper products.87
17 May 2008 26
Agroforestry Potential: Castor is very suitable for agroforestry. It is one of the short-to-medium
term species recommended for growing in agroforestry systems involving food crops, trees and
nitrogen species.88
Environmental Pros & Cons: Castor is an invasive plant that has medium tolerance to drought,
and suitable for mechanization on a large scale. It is also easy to cultivate and needs little attention.
It has a high oil content and relatively low cost of production. Castor does best on fertile, well-
drained soils, therefore it may conflict with food uses on arable lands. However, as the suitability
maps below indicate, castor’s ability to grow on semi-arid lands enable land-use planners to select
lands for plantation that are not in direct competition with food. Castor is known to exhaust the
soil very quickly, requiring the addition of fertilizers. Intercropping with crops that help to replenish
soil nutrients also helps to maintain soil nutrients.89
Pests & Diseases: Many pests are reported to affect castor in Africa, including up to 50 species of
insect: grasshoppers, various larvae, capsid bugs, green stink bugs, lygus bugs, helopeltis, semi-
looper (said to be the most devastating in India), capsule borer, tobacco caterpillar, jassids, white
flies, and thrips while other diseases include seedling blight, wilt and root rot. Diseases are reported
to seldom do much damage, with leaf spot (Cercospora reicinella), rust (Melampsora oricini) and Alternaria
leaf spot being the most common.90
17 May 2008 27
2.2.3.2 Coconut
Scientific Name: Cocos nucifera. Local Name: Mnazi.

48 – 60 to mature;
950- 1.64 (Kenya)95
20-3591 0-75092 11 – 12 for Sandy94 36497
1,35093 3.33 (Optimal) 96
fruiting
Photo 13: Coconut trees growing near the beach.98
Map 5: Coconut Suitability with Food & Cash Crops

Photo 14: Recently harvested mature nut.99
Coconut Suitability Areas in Kenya in Hectares100
224,428 183,746 68,821 33,201
Uses: From the leaves to the fruit to the trunk, coconuts are trees of many uses. The nut is used for
food and beverages, like palm wine. The coconut oil that is extracted from the copra is used in the
manufacture of soaps, cosmetics and pharmaceutical products. The husk and shells can be used for
fuel that can also be processed into ‘activated’ charcoal for use in gas masks and other filtration
devices. Coconut is a carbon source for the manufacture of various chemicals such as carbon
disulphide, calcium carbide, silicon carbide, carbon monoxide, paint pigments, pharmaceuticals,
molding resins, black powder, electrodes, catalyst reactor, brake linings and gas cylinder absorbent.
The oil from the copra is not only edible but can also be used to manufacture paints and varnishes.
17 May 2008 28
The leaves and trunk are used for: building materials and timber for furniture; fiber for ropes, mats,
brushes, and brooms; and shells for the manufacture of utensils and ornaments. The trees
themselves give shade and are planted as boundary markers. Coconut also has religious uses in India
and other Asian countries. The trunk and roots also produce exudates with several applications in
folk and modern medicine. Another interesting application is in plant tissue culture, on account of
the fact that the liquid endosperm contains a plant hormone, cytokinin. This cytokinin is the crucial
ingredient to get single cells to develop into embryos.101
Agroforestry Potential: Agroforestry systems involving coconut are extremely common

throughout the world, including in Kenya. These systems enable farmers to increase their incomes
while diversifying products from the farms.102
Environmental Pros & Cons: Coconut is non-invasive, has medium tolerance to drought, but is
susceptible to water logging.
Pests & Diseases: The American Phytopathological Society lists dozens of bacterial, fungal, viral,
and phytoplasmal diseases that afflict coconut trees. Major Pests include termites, coconut bug,
rhinoceros beetle, coconut mite, coconut scale, and palm weevil. Diseases include lethal bole rot,
lethal necrosis disease, and bud rot. The Kenyan Ministry of Agriculture reports that the rhinoceros
beetle and the coreid bug could threaten future production.103
17 May 2008 29
2.2.3.3 Cotton
Scientific Names: Gossypium hirsutum, G. barbadense and G. harbeceum. Local Name: Pamba.

600- Black cotton, sandy 0.34 (rainfed) 108
20-30104 0-1,400105 5107 146110
1,100106 loams, well drained. <3 (irrigated)109
Photo 15: Cotton beginning to flower.111
Map 6: Cotton Suitability with Food & Cash Crops

Photo 16: Cotton flowering.112
Cotton Suitability Areas in Kenya in Hectares113
2,069,515 1,755,169 1,442,397 1,417,398
Uses: Cotton is best known for its use in the manufacture of textile products. It is also used to
make fishnets, coffee filters, tents, gunpowder (nitrocellulose), cotton paper and in bookbinding.
The residual cottonseed after the cotton is ginned is used to produce cottonseed oil and animal feed.
Cotton fiber is used to manufacture cotton wool, compress, gauze bandages, sanitary towels and
cotton swabs. Cottonseed oil not only has several food applications but can be further refined for
use in soaps and cosmetics. Additional uses include the application of seedcakes as fertilizer,
manufacture of oilcloth and putty.114
17 May 2008 30
Agroforestry Potential: Multiple advantages could be gained by intercropping cash crops, such as
cotton, and trees. The recommended system for such intercropping is alley cropping, which consists
of planting herbaceous or other crops between widely spaced rows of trees or shrubs. Apart from
the multiple products obtained, the system is beneficial by reducing erosion and increasing carbon
sequestration potential.115
Environmental Pros & Cons: Cotton is non-invasive, has medium tolerance to drought, is non-
susceptible to water logging and is suitable for large-scale mechanized farming. Cotton can require
large quantities of fertilizers and pesticides, which affect human health, biological diversity, and
surface and groundwater quality. On the processing and manufacturing side, the use of industrial
chemicals is of concern, especially those associated with dyeing textiles and finishing clothes. These
chemicals affect not only the environment but also workers in the processing and apparel
industries.116
Pests & Diseases: Insect pests comprise one of the most potentially damaging threats to cotton
production. Nematodes (microscopic worm-like organisms) cause the cotton plant to exhibit
disease-like symptoms. They attack the roots causing the plant to stop growing, reducing the yield.
Crop rotation is the primary method of managing nematodes. Other major pests include: boll
weevil (Anthonomus grandis), cotton aphid (Aphis gossypii), cotton bollworm (Helicoverpa armigera), and
native budworm (Helicoverpa punctigera), brown-tail garden dart (Hypercompe campinasa – which feeds
exclusively on G. herbaceum), the nutmeg and turnip moths, green mirid (Creontiades dilutus), spider
mites (Tetranychus urticae, T. ludeni and T. lambi), and thrips (Thrips tabaci and Frankliniella schultzei).
Major Diseases include: alternaria leaf spot (caused by Alternaria macrospora and Alternaria alternata),
anthracnose boll rot (caused by Colletotrichum gossypii), black root rot (caused by the fungus
Thielaviopsis basicola), blight (caused by Xanthomonas campestris pv. Malvacearum), fusarium boll rot
(caused by Fusarium spp.), phytophthora boll rot (caused by Phytophthora nicotianae var parasitica), and
sclerotinia boll rot (caused by fungus Sclerotinia sclerotiorum).117
17 May 2008 31
2.2.3.4 Croton
Scientific Name: Croton megalocarpus. Local Names: Mlalai, muhande and musine.

1,200- 800- Light deep and well
11-26118 48121 2.5122 336123
2,450119 1,900120 drained.
Photo 17: Croton tree in the Kerio Valley.124
Photo 18: Croton fruit and seeds.125 Map 7: Croton Suitability with Food & Cash Crops
Croton Suitability Areas in Kenya in Hectares126
3,138,651 2,560,358 880,943 652,866
Uses: Croton has several important uses: medicines, land improvement, animal feed and fuel
(firewood and biodiesel). Medicinal extracts from the leaves, roots and bark are used to treat
stomach problems and pneumonia. The seed has a high oil content (~30%) and high protein
content (~50%), and is reported to be a forceful purgative. The bark is used to treat stomach
worms and whooping cough. The tree makes a good live fence and/or as a source of shade. The
leaves, which have high levels of nitrogen and phosphorous, are used for mulch and green manure.
The wood is used as firewood but generally not for charcoal as the smoke stings the eyes. The wood
is termite-resistant and quite strong and therefore used in general construction and heavy-duty
flooring. The seeds are incorporated into poultry feed in many parts of Kenya and beyond.127
17 May 2008 32
Agroforestry Potential: Croton is a hardy and fast-growing tree that can survive in harsh climatic
conditions and is generally not browsed by animals. The tree plays many beneficial roles around the
farm: demarcating boundaries, breaking the wind and reducing soil erosion. One report showed that
in the Kenyan coffee-based land-use system of Embu District, more than 10% of the farms have
croton hedges, with an average length of 70 metres, although it adds that when managed as a hedge
the species is unlikely to produce as many fruits. It is also reported that older trees are competitive
with crops. For this reason, the species is often confined to certain niches on the farm such as
roadside boundaries, woodlots and paddocks. However, because of its multiple uses as a source of
poultry feed and biodiesel, it is recommended that research into more suitable germplasm for on-
farm use be conducted.128
Environmental Pros & Cons: Croton’s deep tap root can withstand drought. The tree produces
well for many years once established, has many other uses and benefits on the farm, as noted above.
Pests & Diseases: There is generally a lack of information of pests and diseases affecting Croton,
but ambroia beetles have been reported to damage the tree in areas between 1,300 and 2,100 meters
in Kenya. The insect scolytidae may also prey on croton.129
17 May 2008 33
2.2.3.5 Jatroph a
Scientific Name: Jatropha curcas. Local Names: Barbados nut, fig nut, physic nut, mbono or mfinya.

480- Well drained sandy 2.5 (rainfed) 135
18-28.5130 0-1,650131 60-84133 336137
2,380132 or gravelly soils.134 4.2 (irrigated) 136
Photo 19: Jatropha plantation in Shimba Hills.138
Photo 20: Jatropha fruit and seed.139 Map 8: Jatropha Suitability with Food & Cash Crops
Jatropha Suitability Areas in Kenya in Hectares140
11,096,859 9,414,526 6,459,783 6,264,433
Uses: Originally from Latin America, jatropha has been used in Kenya and many other parts of the
world for years for a variety of uses. Of course, the one use that has provided jatropha so much
publicity of late is as a source of oil for biodiesel. ICRAF reports the following uses from around
the world: ashes from the roots and branches are used as cooking salt; young leaves are eaten when
steamed or stewed; fruit hulls and shells can be used as fuel; leaf juice and ashes are used in dyeing
and tanning; the oil is used in wool spinning and textile manufacture; the bark contains a wax
composed of a mixture of melissyl alcohol and its melissimic acid ester; the oil is used fish poison
and pesticide; leaf extracts have been effective in controlling Sclerotium spp., an Azolla fungal
17 May 2008 34
pathogen; the nuts have been used as a purgative; the latex has antibiotic properties against Candida
albicans, Escherichia coli, Klebsiella pneumoniae, Staphylococcus aureus and Streptococcus pyogens.141
Agroforestry Potential: Under suitable management regimes and spacing, jatropha can be
intercropped, although there is some disagreement over this. In Kenya, this is already happening
where the shrub is used as a support for vanilla plants. Jatropha is widely used in agroforestry
systems throughout India, and trials are underway in Zimbabwe, Egypt and other countries.142
Environmental Pros & Cons: Jatropha is used to control soil erosion, especially in semi arid areas,
and its seedcake, which is high in nitrogen, can be used to improve soils. Fencing can help keep
animals out of croplands. On the downside, the tree takes five to seven years to reach maturity and
full production, seeds contain a highly toxic substance called curcasin, and plantations cannot easily
be mechanized. Jatropha is also considered invasive in many parts of the world. One of jatropha’s
most attractive characteristics is its ability to withstand drought and to grow in semi-arid areas with
poor soil fertility. However, a survey of jatropha farmers in Kenya indicates that these purported
strengths may have been exaggerated. It seems that jatropha is very sensitive to fertilizer and water,
so that yields may be significantly reduced if grown on marginal, arid lands without significant
additional inputs.143
Pests & Diseases: Despite claims to the contrary, jatropha is susceptible to many pests and
diseases. Common pests include: scutellarid bug (Scutellera nobilis), inflorescence and capsule-borer
(Pempelia morosalis), blister miner (Stomphastis (Acrocercops) thraustica), semi looper (Achaea janata),
flower beetle (Oxycetonia versicolor), and golden flea beetle (Podagrica spp.). Jatropha is also host to the
fungus “frogeye” (Cercospera spp.) common in tobacco. Termite infestation has also been reported in
overage trees. Some diseases reported for Jatropha include: root rot (Clitocybe tabescens), leaf spot
(Colletotrichum gloeosporioides), rust (Phakopsora jatrophicola), cassava superlongation disease (Sphaceloma
manihoticola/Elsinoe Brasilinesis). In Zimbabwe and Kenya, powdery mildew damages leaves and
flowers, Alternaria causes premature leaf fall, and golden flea beetles eat young leaves and shoots.
Red spider mite has also been reported in Kenya. KEFRI is currently conducting a study of pests
and diseases affecting jatropha in Kenya, due out sometime in 2008.144
17 May 2008 35
2.2.3.6 Rapeseed (Canola)
Scientific Name: Brassica napus Local Names: Rapa, rape, oilseed rape and canola.

1,830- 1,000- All types, drained, 2.0 (Rainfed)148
10-30ºC 145 3-4 392150
2,700146 2,000147 saline soils. 3.5 (Irrigated) 149
Photo 21: Rapeseed plantation in full bloom.151
Photo 22: Rapeseed.152 Map 9: Rapeseed Suitability with Food & Cash Crops
Rapeseed Suitability Areas in Kenya in Hectares153
1,188,160 815,755 248,924 156,367
Uses: Rapeseed, which is related to mustard, broccoli and turnip, is mainly grown for oil and
animal feed. Rapeseed oil has many valuable industrial uses, including: as lubricating oil, polymer in
paints and varnishes, and in the manufacture of emulsions to coat photographic paper and film. Its
high erucic acid content also makes it valuable for biodiesel due to its high calorific value, low flash
point and high cetane levels. Most of the biodiesel produced in Europe is derived from rapeseed.
Canola is a particular cultivar of rapeseed that has been bred to have a lower erucic acid level
because tests have shown that infants may not have the appropriate enzymes to properly break it
down. Rapeseed is also beneficial as a cover crop that protects soils, suppresses weeds and can
17 May 2008 36
break up the soil with its extensive root system. Wheat farmers in Laikipia and Timau grow rape for
these purposes.154
Agroforestry Potential: Although trials have shown that rapeseed can be intercropped with trees,
the most economical production is in mechanized plantations.155
Environmental Pros & Cons: Rapeseed is a good cover crop and a good source of oil, which can
be used for human and animal consumption, as well as in biodiesel production. Rapeseed is
generally grown on a mechanized scale, which often relies on energy-intensive and chemical-
intensive methods of farming, which can lead to various detrimental environmental impacts.
Pests & Diseases: Major pests include: flea beetle, diamondback moth, bertha armyworm, root
maggot, cabbage seedpod weevil, aphid, and harlequin bug. Major diseases include beet western
yellows virus, blackleg, clubroot, Sclerotinia stem blight, Pythium (damping off) and white rust
disease.156
17 May 2008 37
2.2.3.7 Sunflower
Scientific Name: Helianthus annuus. Local Names: Sunflower, marigold of Peru, Sola indianus.

500- Well drained soils, 0.92 (current) 162
20-28ºC157 0-2,600158 4-6160 414164
1,200159 loam soils161 3.0 (irrigated) 163
Photo 23: Sunflower plantation.165
Photo 24: Sunflower seeds.166 Map 10: Sunflower Suitability with Cash & Food Crops
Sunflower Suitability Areas in Kenya in Hectares167
7,000,169 5,777,377 3,576,861 3,477,635
Uses: Sunflower is used mainly for edible oil and animal feed formulations. Sunflower oil is also
used in certain paints, varnishes and plastics because of good drying properties that do not affect
color. Sunflower can also be used as a silage crop. It can be used as a double crop after early
harvested small grains or vegetables, an emergency crop, or in areas with a season too short to
produce mature corn for silage. Besides producing edible oil, the seeds themselves can be eaten as
snacks, whereas the leaves and other parts are reported to have various medicinal uses.168
Agroforestry Potential: Sunflower can be intercropped with trees because of its ability to restore
nitrogen used up by other crops. A recent study showed that when trees are intercropped with
17 May 2008 38
sunflower and other crops, soil erosion and nitrogen leaching were significantly reduced, while
landscape biodiversity and carbon sequestration increased.169
Environmental Pros & Cons: A joint document by North Dakota State University and the United
States Department of Agriculture describes sunflower as high-risk crop, under threat from four main
agents, namely: insect pests, disease, birds and weeds.170
Pests & Diseases: The major insect pests of sunflower include the jassids and white fly which are
sucking pests, tobacco caterpillar, Bihar hairy caterpillar and semi loopers which are foliage pests,
and the gram pool borer, a cepitulum borer. Major diseases include: Alternaria, leaf spot, rust,
powdery mildew and sunflower necrosis disease (a viral disease).171
2.2.4 Second-Generation Biodiesel
Similar to ethanol, second generation of biodiesel production is being explored in research

laboratories throughout the world. Oil production from algae has been under development for at
least three decades, but has yet to become commercially viable.172 Some companies are beginning to
market and sell off-the-shelf algae bio-reactors, but they are not yet commercially proven or
economically competitive with existing oil crops.173
17 May 2008 39
3. HISTORY & CURRENT STATUS OF BIOFUELS
This section provides the history and current status of ethanol and biodiesel in Kenya, as well as a
brief review of various biofuels programs globally and regionally. The aim is to inform the reader of
the status of Kenya’s biofuels industry in comparison to her neighbors and the world’s leading
producers. The section is also meant to guide policy makers, potential industry players and other
stakeholders so that they can learn from experiences in other parts of the world.
3.1 ETHANOL IN KENYA
Kenya was ahead of its time in

producing and using ethanol for FIGURE 3: INFLATION ADJUSTED OIL PRICES 1970-2007174
fuel, but abandoned its gasohol
program over 15 years ago.
Starting in the early 1980’s,
Kenya produced and blended
ethanol into the national petrol
distribution network. The
Government of Kenya initiated
its gasohol policy in response to
the record oil prices of the late
1970s and early 1980s (see Figure
3), and the impact this price spike
was having on the nation’s
foreign currency reserves.176 The
policy mandated a 10% ethanol
blend, but due to production limitations, only achieved that level in the Nairobi market. One
company, Agro-Chemical, produced all of the ethanol used in the program, which was transported
to the Nairobi fuel depot and blended by the petroleum retailers. A number of factors made
gasohol uneconomical by the late 1980s, including: a drop in global oil prices, a surge in the price of
ethanol for alcoholic consumption in export markets, and a deterioration of the ethanol production
and transport infrastructure in Kenya.
The blending program ceased, although
ethanol continues to be produced to this
day for the alcohol beverage market in
Kenya and throughout East Africa.
The Kenyan ethanol industry, which now

includes Agro-Chemical and newcomer
Spectre International, is marked by
tremendous opportunities and significant
challenges. Despite more than two
decades of experience in the industry and
a recent increase in production from
Photo 25: Water treatment at Spectre International’s ethanol about 11 million liters in 2004 to nearly
plant.175 19 million in 2006, serious limits on
17 May 2008 40
growth remain.177 Nonetheless, expansion of current ethanol production capacity is beginning. In

order to succeed, a coordinated effort will be required to dramatically expand current feedstock
production and to ensure a rational policy framework is adopted. If these efforts are successful, it
seems entirely possible that at least 10% of Kenya’s petrol consumption could be offset by ethanol
within the next five to ten years. Along the way, thousands of farmers and workers, as well as
Kenya’s struggling sugar industry, stand to benefit from a long-awaited economic boom. Many of
the key suggestions for realizing this vision are contained in latter parts of this study.
Agro-Chemical and Spectre International have current

production capacities of 60,000 and 65,000 liters per
day, respectively, although current supplies of molasses
– the only ethanol feedstock being used in Kenya –
mean that only about half of capacity is currently being
used, for a total average daily production of about
60,000 liters per day.179 Most of the ethanol produced
is being sold to the beverage markets in Uganda and
the Democratic Republic of Congo, with some also
being sold for various industrial purposes as
methylated spirit.
Fulfilling the full production capacity at the two

ethanol plants would require almost the entire supply
of molasses from Kenyan sugar companies, which is
not feasible given the alternative markets for molasses
and the current productivity of sugarcane in Kenya.180
About half of the molasses currently produced in
Kenya is being sold off to farmers and small-scale
brewers in Uganda, who are typically willing to pay a
higher price than the ethanol plants can afford. If
Kenyan sugarcane growers were able to irrigate their
crops and grow faster maturing types of cane, as many
of their competitors in Egypt, India and Mauritius do,
then they could increase yields by up to 100%. This
would enable greater overall competitiveness of the
Kenyan sugar industry, as well as provide larger
quantities of available molasses for ethanol.181
Photo 26: Sugarcane backlog outside of the However, irrigation is a very costly input, so the
Muhoroni Sugar Co. and the adjacent, idled Agro-
Chemical ethanol plant.178 returns must be high enough to justify the additional
costs.
Poor planning and a crumbling infrastructure are also limiting the competitiveness of sugar and
ethanol in Kenya. This point was well demonstrated by a recent scene outside of the Muhoroni
Sugar Factory and the adjacent Agro-Chemical ethanol plant where over 200 tractor-loads of
sugarcane sat idly waiting to be unloaded into the crushers at Muhoroni. Although the precise
reason for the delay was not clear, the effect was that Agro-Chemical had to cease ethanol
production due to the lack of molasses. Another unfortunate effect was that farmers were forced to
sit helplessly watching their two-year-old crops lose sugar content, and thus value, by the hour
(sugarcane starts losing sugar content within two days of harvesting).
17 May 2008 41
Thriving in an increasingly competitive global commodities market will require the Kenyan sugar
and ethanol industry to innovate and diversify, as well as to invest in more efficient methods of
production. As the Plant Manager at Mumias explained, “the unit cost of production of sugar in
Kenya is one of the highest in the world. If we don’t diversify, then we’ll shut down.”182 Ethanol
production and other products like power generation from bagasse could provide the lifeline that
the sugar industry desperately needs to survive. Privately owned Mumias and Spectre International
seem to have embraced this vision of the future, while some of their government-run competitors
appear stuck in a past of guaranteed markets and a general lack of accountability. Mumias, which
produced 226,666 tonnes of sugar in 2006, or 48% of total production in Kenya,183 is planning to
begin producing ethanol from its steady supply of molasses rather than continue selling it off to
Agro-Chemical and Spectre International.184
The integrated production of sugar, ethanol and power that Mumias is planning is a more efficient
and sustainable model of production. Rather than hauling tonnes of molasses via crumbling roads
from the sugar factory to a distant ethanol distillery, the integrated approach is environmentally and
economically superior. Indeed, Mumias predicts that it will be able to produce ethanol for
significantly less than the current cost of production at Agro-Chemical and Spectre.185 Mumias’
plans will mean less molasses available to Spectre and Agro-Chemical, which will force them to
develop alternative ethanol feedstocks if they plan to continue operating.
Undeterred by these developments, Spectre is moving ahead with a major expansion that will
increase its production capacity from its current 65,000 liters per day to 230,000 liters per day.187
Plans by Spectre and Mumias, if realized, will expand Kenya’s ethanol production capacity to over
340,000 liters per day from its current 125,000 liters per day (see Table 1).188 This expansion
represents a major
TABLE 1: C URRENT & PLANNED ETHANOL PRODUCTION CAPACITY 186 opportunity for rural
Ethanol Production (L/day) Agro-Chem Spectre Mumias Totals economic
Current Capacity 60,000 65,000 0 125,000 development in
Current Production 27,400 30,000 0 57,400 Western Kenya and
Current & Planned Capacity 60,000 230,000 ~50,000 340,000 perhaps other regions
as well. Increasing sugarcane yields on existing lands with irrigation and improved varieties, as well
as expanded production into suitable areas (see Sugarcane Suitability Maps in Appendix A) that are
not currently growing sugar, can meet some of this demand. For example, investing in irrigation on
some lands currently used to grow cane could enable farmers to grow cane varieties that could
mature in about half the time, which would not only nearly double production per hectare, but also
help the sugar companies compete with the price of imported sugar. Mumias is also planning a large
sugar and ethanol factory near the Tana River that will use irrigation to increase yields. According to
Mumias, the goal is to produce a globally competitive sugar product while also producing large
quantities of ethanol for domestic and export markets.189
However, limitations on available land and competition with food production are almost certain to
preclude all planned ethanol production to be supplied by sugarcane. Without a substantial increase
in sugarcane productivity, or a wholesale shift from sugar to ethanol production (which could
produce over 900,000 liters per day of ethanol),190 about 80% of the planned and current capacity
will have to be met with new feedstocks. Spectre is planning to meet this increased capacity with
sweet sorghum and perhaps other crops.191 Spectre already has a test plantation in the ground and
plans to begin recruiting outgrowers by mid-2008. Agro-Chemical is also talking about sweet
17 May 2008 42
sorghum as an alternative to molasses, but is further behind than Spectre in developing an

outgrower program. One potentially innovative proposal from Spectre is to pay outgrowers based
on the sugar content of the sorghum as opposed to the weight of the raw feedstock delivered. This
should provide an incentive to farmers to increase their effort to produce optimal, high-yielding
crops.
One of the greatest potential benefits of sweet sorghum is the fact that it can thrive in drier, more
marginal agricultural areas than sugarcane (see Sections 2.1.3.2 & 2.1.3.3, and suitability maps in
Appendix A, for a comparison of sorghum and sugarcane), however more practical research needs
to be done to maximize its economic potential in Kenya. Both companies mentioned that the
ethanol industry would benefit greatly from agronomy research and development assistance. The
International Crop Research Institute for the Semi-Arid Tropics (ICRISAT), which has a sweet
sorghum program and offices in Nairobi, has met with both ethanol companies about providing
such assistance, but little on-the-ground support has yet materialized from these meetings. This is
one area where research assistance can and should be provided.
At the current rate of growth of petrol consumption of about 2.8% per year, Kenya is projected to
consume about 618 million liters of petrol by 2013.192 Full capacity of current and planned ethanol
production could provide about 13% of domestic demand.193 This could enable a nationwide blend
of 10%, which would be consistent with current blends in many other parts of the world, leaving
about 30 million liters for export or other non-fuel markets. Of course, it is unrealistic to assume
production at full capacity, so additional ethanol plants would be necessary to reach this level of
production. The economic analysis contained in Section 4 provides detailed information on ways of
realizing such levels of production, as well as the potential income, employment and foreign
currency exchange benefits. Section 5 on fiscal and regulatory policy and Section 7 on
recommendations describe the regulatory framework that would be required.
Revival of ethanol fuel production in Kenya has widespread support from the public. In a
countrywide survey (conducted as part of this study) involving interviews with over 80 potential
stakeholders and interested parties in seven provinces, almost all respondents expressed support for
the revitalization of the gasohol program. Reasons for their support included: rising petroleum
prices, past success and the availability of existing infrastructure, and better use of waste from sugar
factories. Respondents urged the government to put policy guidelines in place and sensitize people
on the importance of ethanol as a substitute for petroleum.
3.2 BIODIESEL IN KENYA
Compared with ethanol, biodiesel in Kenya is in its nascent stage. However, a flurry of activities
among government agencies, NGOs and the private sector indicate great potential. The vast
majority of biodiesel projects currently underway or being planned involve jatropha as the main
feedstock, although projects involving other feedstocks, including castor, coconut and croton, are
also being discussed.
Many of the jatropha projects that are being run by NGOs and development organizations seem
primarily focused on selling seeds and getting jatropha trees planted as quickly as possible. In the
rush to move forward, too little attention seems to have been paid to coordinated research and
development of high yielding seed provenances and general agronomic advancements of growing
17 May 2008 43
jatropha, although research is starting in this area. In some cases, unsuspecting farmers have been
sold seeds at prices in excess of Ksh 2,000 per kilogram, with unfulfilled promises of agronomic
extension services and agreements to buy back seeds produced. This has begun to fuel cynicism
among some farmers about the crop’s potential, as well as to distort the market for jatropha seeds,
thus undermining its potential as a viable biodiesel feedstock.194 Here is a brief description of some
of the jatropha activities currently underway throughout the country:
The Green Africa Foundation (GAF) works in partnership with the private sector, individuals, self-
help groups and the government.196 GAF is working with investors from Japan who are seeking to
set up plantations and processing industries from Taita Taveta all the way to Lamu. GAF claims to
be working with thousands of farmers in Kajiado, Namanga, Kitui, Machakos, Nakuru, Naivasha,
Coast Region and Marakwet. In addition, there are demonstration plots in Kitui, Shanzu, Marakwet,
and Rarieda where farmers are not only taught how to plant jatropha, but provenance and
management trials are also conducted. GAF’s role is
mainly in training farmers on proper planting procedures
and supplying seeds and seedlings.
The Mpeketoni (Lamu) Jatropha Project is a partnership

of three main groups: Norwegian Church Aid (NCA),
the Lamu Cotton Growers Association and ESDA.197
The project aims to develop a Jatropha Energy System
through an integrated approach of cultivation of
jatropha for use either as a biodiesel blend or as straight
jatropha oil, which will be used to run small power
generation units with capacity totaling over 3MW. The
project will commence in 2009 and benefit up to 10,000
farmers. The first harvest is expected after two years
and estimated to yield 60 tonnes of oil. Initial land area
to be cultivated is 400 hectares, which will be scaled up
to 1,000 hectares after seven years.
Nyumbani Eco-Village in Kitui, which is home to many

AIDS orphans, is being developed into a model of
sustainability. The project is working to house about
1,000 orphans and 250 elders, with a goal of becoming
self-reliant in terms of food production, energy and use
of local resources. It is currently planting jatropha trees
in and around the village.
Vanilla Jatropha Development Foundation (VJDF) is

another NGO that works with farmers, government and Photo 27: Agri-Business Group’s plantation near
the private sector to increase the production of jatropha Nakuru; Green Fuels (K)’s plantation near Thika;
throughout the country.198 The biggest projects are Energy Africa extension services with participating
smallholder.195
located in Kibwezi, Koibatek and Kisumu. Its main role
is in training extension workers for partner
17 May 2008 44
organizations, which then incorporate jatropha planting as part of their activities in the regions
where they operate. However, some of these organizations have stated that they have yet to receive
much, if any, of the promised training and support once the seeds or seedlings were sold to them.
VJDF also claims to be involved in testing various properties of jatropha in cooperation with the
Kenya Industrial Research Development Institute (KIRDI), the Kenya Forestry Research Institute
(KEFRI), Kenyatta University and the Kenya Bureau of Standards (KEBS). VJDF’s Kambu project
in Kibwezi is a unique concept whereby VJDF will supply seedlings to Safaricom at Ksh 10 per
seedling, which Safaricom in turn will sell to farmers at a subsidized price of Ksh 5 per seedling and
guarantees the market for the seeds after harvest. Safaricom is interested in using biofuels to power
its remote relay towers, which are now powered by diesel generators.
The United Nations Development Programme’s Small Grants Programme has been working with
community based organizations in Kwale and Malindi districts to assist over 1,500 farmers plant
over 200,000 jatropha trees on and around their farms.199 The project’s goals are to conserve
biodiversity by reducing pressure on natural forests, decreasing land degradation and soil erosion,
promote a clean, affordable, and locally-produced alternative fuel, and to enhance gender equity by
empowering women. The first oil is expected to be pressed after the long rains of 2008.
Several private companies have begun developing jatropha plantations and are striving to expand
production to a commercial scale.
Better Globe Forestry Limited has planted 48 hectares field trial of jatropha in Kiambere.200 They
are dealing with many of the same problems as other jatropha pioneers in Kenya: diseases and pests,
and poor initial growth. It is not clear whether this is the result of poor seed germplasm or the
result of particularly harsh environmental conditions. What is clear is the need for coordinated
agronomy research into jatropha throughout Kenya. Private entrepreneurs like Better Globe
Forestry and the many smallholders who have bought expensive seeds and seedlings from NGOs
have put their own resources on the line and need support in terms of improved planting material
and plant husbandry to realize the potential of their investments, and of jatropha in general as a
viable feedstock for biodiesel in Kenya.
Green Fuels (K) Limited has a jatropha nursery and two-acre test plantation north of Thika near the
Tana River.201 The seeds produced by the plantation are being used to grow seedlings for sale to
other farmers who are beginning to plant. Green Fuels is also providing seedlings free of charge to
nearby smallholders.
Energy Africa Limited has been working since 2006 with over 200 smallholders in Shimba Hills near
Kwale to begin planting jatropha.202 Over 200,000 trees have been planted, with plans for many
more. The project has encountered similar challenges to other jatropha projects in Kenya including
poor establishment and pest and disease problems, but is beginning to correct some of these issues.
The company has also established a sister company in Uganda, with ongoing jatropha test
production in Mukono and Moyo Districts.
Agri-Business Group is an agricultural consulting business based in Nakuru, but working with
farmers throughout Kenya.203 They have planted a five-acre test plantation with an eye towards
much larger plantations in the area. To date, the performance of the jatropha trees has been highly
17 May 2008 45
dependent on the quality of inputs. For example, trees that were not treated for pests have suffered
tremendously, especially from an infestation of red spider mite.
Due mainly to the lack of available biodiesel feedstock, very little biodiesel is actually being
produced. One company, Green Power East Africa Limited, is currently producing biodiesel on a
small scale using a single BioKing reactor unit with an approximate capacity of 1,000 liters per day.204
They use whatever oil feedstock is available on the local market, including cottonseed, and sell the
produced biodiesel to local customers in the Enterprise Road area of Nairobi’s Industrial area. The
Kenya Industrial Research Development Institute (KIRDI) is also experimenting with crude
homemade reactors using a variety of feedstocks. Such a program is ripe for increased research and
development funding.
Several of the projects or organizations listed above are beginning their own research and
development activities to identify superior planting material and best practices. Others have
expressed interest in doing so. Two new projects are currently being planned to test best
silvicultural practices and high yielding seed provenances. One project, which is being funded partly
by the German private investment agency DEG, involves various farmers throughout East Africa
who are bearing some of the costs of the trials, along with land and labor.
The other research project involves a number of Kenyan farmers, Endelevu Energy, KEFRI,
ICRAF, and the Aga Khan Foundation’s Coastal Rural Support Project (CRSP) in Kilifi and Malindi.
The farmers will commit land and labor, KEFRI and ICRAF will design the trials and analyze the
results, and CRSP will be working with smallholders who are eager to introduce a cash crop to their
existing agricultural regime. Both projects expect to get underway in 2008. Some individual farmers
are also beginning to plant trials of castor for biodiesel.
KEFRI has been conducting research on various tree and shrub species to ascertain their potential
for biodiesel production.205 The priority species are jatropha, croton, yellow oleander (Thevetia
peruviana) and pongamia (Milletia pinnata). Most of the research to date has focused on jatropha and
includes the following:
• Jatropha Provenance Trial: Seeds will be collected from various areas and planted in
potential sites and their performance monitored.
• Yield Determination: Focusing on quantity and quality from selected individual trees from
different sites.
• Genetic Improvement and Fingerprinting: Selected provenances will be selected and the
genotypes fingerprinted and monitored for consistency and further breeding.
• Genetic Diversity Studies: KEFRI intends to establish the genetic diversity of jatropha to be
able to address future problems associated with genetic origin, such as inbreeding.
• Silvicultural Practices: This is intended to optimize quality and quantity based on the best
silvicultural practices like spacing and intercropping.
The various research projects described above are encouraging, but should be better coordinated
among both participants and donors to avoid overlap and to take advantage of the relative strengths
of the various projects.
On the policy front, the Ministry of Energy has convened a National Biofuels Committee (NBC)
comprised of representatives from the petroleum industry, government ministries, agricultural
17 May 2008 46
producers and NGOs. The Committee has drafted a biodiesel policy strategy with nearly exclusive
focus on jatropha.206 Other crops, like castor and croton are given passing mention in the
document, but jatropha is the only crop that receives any serious attention. In some respects, these
other crops may present a better opportunity for large-scale production in the short- to medium-
term, as they are proven crops and can produce large quantities of feedstock within a season rather
than in several seasons, as would be the case for jatropha.
While it is understandable to favor inedible oil crops that are less likely to compete for land with
food crops, not considering the potential for other crops to serve as potential feedstocks just
because they may be edible is overly simplistic and possibly counter productive. For example, the
use of inedible crops can still have an adverse affect on food production by competing with food
crops for land and labor. As explained below, the impact of biofuels crops on rural economic
development, whether edible or inedible, is much more complex and requires a more nuanced
approach. For one thing, detailed mapping and planning can enable certain areas to begin growing
biofuel cash crops in lieu of food crops as long as the income generated from such cash crops and
the local market can provide at least as much food as current practices do.
Regarding taxes and incentives, the Strategy proposes to undertake an economic analysis to “reveal
details of taxation incentives that should be offered to stakeholders to encourage growth of the
industry.”207 Two criteria are listed for whether tax incentives should be provided for biofuels: that
the country does not lose revenue previously accruing from taxation of mineral diesel; and that
incentives only apply to biodiesel for local consumption.208 The Ministry of Energy also supports
local ownership of investments and incentives such as tax waivers on imported equipment for use in
the biodiesel industry.209
The economic analysis contained in Section 4 is intended to facilitate the research and
decisionmaking process regarding appropriate biofuels tax policy. The analysis shows that most, if
not all, biofuels will not be cost-competitive with petroleum-based fuels at current prices if faced
with the same tax burden. Moreover, carbon credits are unlikely to provide much, if any, additional
income for biofuels producers, as is also discussed in Section 4. We recommend ways of easing the
tax burden on biofuels that maintain existing revenues for the government (see Section 7).
3.3 GLOBAL BIOFUELS PROGRAMS
More than 30 countries around the world have launched ethanol fuel programs, with Brazil and the
United States leading the way. Meanwhile, the European Union is the top producer of biodiesel,
with about 4.5 billion liters, or about 72% of global production, in 2006.210 As discussed in more
detail below, the growth in biofuels throughout the world has been the result of favorable fiscal and
regulatory policies. For example, in 2003, the EU implemented a policy allowing member states to
exempt biofuels from taxes, while also setting a target of achieving 5.75% biofuels throughout the
E.U. by the end of 2010.211 China, India and other countries are also launching large biofuels
programs.
3.3.1 Brazil
17 May 2008 47
Brazil is the second largest producer of ethanol in the world behind the United States and
was the first country to launch a comprehensive bioethanol program in 1975, called
Proalcool. The program had the following major elements:
! A fixed quota on blending with petrol;

! Incentives for the production of engines that could run on straight ethanol;
! Special credit lines for agriculture & industry;
! A fixed price for ethanol below that of petrol; and
! Tax exemptions for car owners purchasing cars that could run on straight ethanol.212
The program was so successful that by the mid-1980’s four out of every five new cars sold were
ethanol only and by 1988 ethanol had overtaken petrol as the main source of transport fuel.213 The
drop in global petroleum prices in the early 1990’s, combined with a rise in global sugar prices, led to
a shortage of hydrous ethanol. The government responded by passing a law requiring a 18-26%
blend of anhydrous ethanol. By the late 1990’s the government liberalized the ethanol industry by
deregulating pricing. Flex-fuel vehicles (FFVs), which can run on pure ethanol or any blend of
ethanol and petrol, now account for about 80% of all new cars sold in Brazil.214
In 2006, Brazil produced nearly 49 million liters of ethanol per day, several times Kenya’s total daily
petroleum consumption.215 The current policies supporting ethanol include the following:
! 20-25% blending mandate;

! Total value-added tax, excise and other duties are about half what they are for petrol;
! Tax breaks for flex-fuel vehicles.
Brazil has also launched a biodiesel program that includes a B2 mandate by 2008 and a B5 by
2010.216 Biodiesel producers must be licensed by the government, which helps to ensure quality
standards are met, and all diesel distributors are required by law to purchase all licensed quantities of
biodiesel produced.217 Low-interest government loans and reduced tax burdens along the entire
production value chain also play a crucial role in promoting the industry.
By the end of 2007, Brazil was expected to have 24 large biodiesel plants with a total production
capacity of 1.14 million tonnes per year.218 Actual production has surged from 650 tonnes in 2005 to
60,000 in 2006 and an estimated 300,000 tonnes in 2007.219 Brazil expects an exportable surplus of 2
million tonnes of soyabean oil in 2007-2008, much of which could be used for biodiesel
production.220 Other feedstocks for biodiesel include palm oil, castor and possibly jatropha.221
3.3.2 Germany
Germany is the world’s leading producer of biodiesel with nearly 3 billion liters in 2006.222
Biodiesel represents about 7% of all diesel consumption nationwide.223 One of the key
drivers for Germany’s growth in biodiesel production has been an exemption on excise
tax for biodiesel. However, that is changing. In 2006, the German Government
implemented a Euro 0.09 per liter tax on biodiesel, which is still below that of petroleum diesel. The
plan is to completely eliminate the tax treatment disparity between biodiesel and petroleum diesel by
2012.224
17 May 2008 48
On the ethanol front, Germany has launched a 1.2% blending mandate (E1.2), which will grow to
3.6% by 2010. Suppliers will be penalized for failing to meet the mandated levels, but the share of
ethanol in each liter of fuel will be fully taxed.225 In 2006, Germany produced 765 million liters of
ethanol, about 75% of which came from grains, about 22% from non-agricultural resources like
ethylene, and the remainder from potatoes, sugar beets and other feedstocks.226 Planned ethanol
plants are expected to utilize sugar beet as the main feedstock in the future.
3.3.3 India
India produced 1.65 billion liters of ethanol in 2006, of which 200 million were used for
fuel.227 Molasses and cane juice are the primary feedstocks used for ethanol production.
After a number of fits and starts, India adopted an E5 blending policy for part of the
country in 2006. The policy was expanded nationwide in 2007, and increased to E10 by
October 2008 due to expected sugarcane surpluses. Fixed prices for ethanol and mandatory
blending requirements are the main regulatory tools employed for achieving the targets.
India has ambitious biodiesel plans, but an uncertain strategy for achieving them. As a net importer
of vegetable oil, the country is betting its biodiesel future on relatively untested feedstocks of
jatropha and pongamia. The government is planning to finalize its biofuels strategy in early 2008,
and is expected to endorse a B20 policy by 2012, which would require 13.4 million tonnes per year.
Actual biodiesel production in 2007 was about 100,000 tonnes, and is predicted to increase to a mere
200,000 tonnes by 2010.228 Economics and untested agronomy for jatropha are the biggest hurdles
to biodiesel in India. Current production costs for jatropha biodiesel is about $1.10 per liter
compared with about $0.92 per liter of petroleum diesel.229 To produce sufficient quantities of
biodiesel from jatropha to meet the country’s B5 mandate will require a $7 billion investment and 11
million hectares of land.230 To date, only about $500 million has been invested on 0.4 million
hectares.231
3.3.4 Thailand
Thailand produced about 150 million liters of ethanol in 2006, mainly from sugarcane and
cassava. The sugar industry, which is one of the world’s largest has suffered under
drought in recent years, as well as low yields in terms of production and sugar content of
the cane.232 In some ways, the Thai and Kenyan sugar industries face similar problems. Low
productivity and a relatively high cost of production is in part the result of protective regulations
that maintain artificially high domestic prices and provide few incentives to increase efficiency.
Efforts are underway to reform the system in Thailand, although little progress can be reported to
date.
The government has implemented a national ethanol policy, which oversees the approval of new
projects and grants fiscal incentives to increase production, especially from domestically produced
feedstocks. The use of 10% ethanol in all government vehicles has been planned, and all producers
of E10 are exempt from certain fuel and excise taxes. The national goal is to increase gasohol
consumption to 20 million liters per day by 2011.233
The Thai government also plans to introduce a B2 biodiesel mandate beginning in 2008, which
would amount to about 345 million liters per year.234 Feedstock limitations will make this target
17 May 2008 49
difficult to reach, although the government has launched a 1 million hectare palm plantation
initiative with the support of about US$34 million.235 It is also encouraging new palm plantations in
Laos, Cambodia, and Burma.
3.3.5 United States
The United States has overtaken Brazil as the world’s leading producer of ethanol, with
over 18 billion liters in 2006 and more than 23 billion liters projected in 2007.236 The
explosive growth in ethanol production in the U.S. is due in large part to a bevy of
subsidies and incentives. These include a production tax credit of $0.51 per gallon
($0.135 per liter) for ethanol and $1.00 per gallon ($0.264 per liter) for biodiesel.237 Total subsidies
and incentives from all levels of government are estimated at between $1.42-$1.87 per gallon
($0.375-$0.494 per liter) of ethanol and between $1.69-$2.15 ($0.446-$0.568 per liter) for biodiesel.238
Various other factors have also spurred the ethanol boom in the United States. First, the Clean Air
Act set requirements for oxygenated fuel as a way of combating air pollution. Until recently, MTBE
was the fuel additive of choice, but has been phased out due to its impact on water pollution.
Ethanol has replaced MTBE as the main oxygenator of petrol in the U.S. Second, in 2003, the Bush
Administration launched a major initiative to support corn-based ethanol. The program sets a
renewable fuel standard of 28.4 billion liters by 2012, which represents a 58% increase in production
from 2006.239 As mentioned above, the U.S. Department of Energy has launched a major initiative
to develop a commercially viable cellulostic ethanol industry within the next several years.
The biodiesel industry in the U.S., while significant in absolute terms, is only a small fraction of the
size of the ethanol industry. About one billion liters was produced in 2006, which is expected to
double over the next few years. Many of the same incentives mentioned above, including tax credits
and the renewable fuels standard, are responsible for the growth in biodiesel.240
3.4 REGIONAL BIOFUELS PROGRAMS

3.4.1 Ethiopia
Ethiopia currently produces about eight million liters per year of ethanol from molasses,
with enough molasses available from its sugar industry to increase that output by as much
as 300%, according to one report.241 The Minister of Mines and Energy has announced a
policy to begin blending 5% ethanol into the country’s transport petrol pipeline, starting
in late 2007 or early 2008.242 A UNDP sponsored program is also looking into using ethanol as a
fuel for home cooking.243
The Ethiopian Government recently announced that the government is committing 24 million
hectares of land to growing jatropha.244 Of course, it is extremely hard to fathom how the
government intends to dedicate this huge amount of land – more than 20% of the entire country –
to growing a single, generally untested, and inedible crop.245 Less than 1,700 hectares have so far
been committed by plantation developers.246
3.4.2 Malawi
17 May 2008 50
Malawi has two ethanol plants, one that was opened in 1982 on the shores of Lake
Malawi in Dwangwa and the other in 2004 in Chikwawa.247 The ethanol is made from
sugarcane molasses. In 2006, Malawi produced 18.6 million liters of ethanol248 and since
the early 1980’s over 224 million liters have been blended with petrol in Malawi.249
3.4.3 Mali
The Mali-Folkecentre (MFC) has been developing “energy service centres” involving 20-
hectare jatropha plantations that provide energy to local communities for activities such
as millet grinding and battery charging.250 In partnership with UNEP, UNDP, and the
Global Village Energy Partnership, MFC has launched a 15 year, 1,000 hectare jatropha
project that will provide power to more than 10,000 local residents.
Mali Biocarburant, a Dutch-backed start-up is betting that it can create an economically-viable

biodiesel company based on collections of jatropha seeds from thousands of smallholder farmers.251
The difference with other similar projects is the lack of any central plantation. Instead, they will rely
entirely upon existing jatropha trees, mainly planted as fencing to begin production in the first half
of 2008. The goal is to produce five million liters per year within five years, which will require the
annual collection and processing of approximately 20 billion jatropha seeds.
3.4.4 Nigeria
Nigeria has been producing ethanol since 1973, and is in the process of adopting a 10%
blending policy, which would require an estimated one billion liters of fuel alcohol per
year.252 Nigeria Yeast & Alcohol Manufacturing PLC, the country’s sole ethanol plant,
produced 30 million liters of in 2006.253 The Nigeria National Petroleum Company
recently signed an agreement with Brazil’s Petrobras to construct a $200 million ethanol plant.254
Nigeria is Africa’s largest cassava producer, with an annual production of over 30 million tonnes per
year, which could supply the country with hundreds of millions of liters of ethanol.255
3.4.5 Senegal
Compagnie Sucriere du Senegal announced in 2006 that it was planning to start producing
ethanol from molasses within 12 months.256 It is unclear whether production has
commenced. Senegal recently formed Pays Africains Non-Producteurs de Petrole, the
Pan African Non-Petroleum Producers Association, which is currently comprised of 15
countries. Little official documentation is currently available on the overall purpose and proposed
programs of the organization, but it appears that a major focus will be joint creation of institutional,
organizational, and financial mechanisms for expanded biofuels production. The 15 countries that
have signed on have an arable land base of 378.8 million hectares, of which about 11% is currently
being used for agricultural production.257
3.4.6 South Africa
South Africa accounts for about 70% of total ethanol production in Africa, although
most of that has been of the synthetic kind derived from coal and gas.258 The country is
now increasing its bioethanol and biodiesel production levels and the government has
17 May 2008 51
recently adopted a national biofuels strategy. Two large ethanol plants have a current production
capacity of 97 million liters per year. Three large biodiesel plants are now being planned, with a total
production capacity of more than 300 million liters per year.259
In December 2007, the South African Department of Minerals and Energy released its “Biofuels
Industrial Strategy.” The strategy sets a biofuels target of 2% of petroleum consumption within the
next five years, with a proposed blending ratio of 2% for biodiesel (B2) and 8% for ethanol (E8).260
The government is encouraging the program with a 50% fuel levy exemption for biodiesel and a
100% exemption for ethanol.261 Small biodiesel producers (less than 300,000 liters per year) are
completely exempt from the fuel levy.262 Biofuels prices will be fixed at the equivalent of $65 per
barrel of petroleum oil, which will provide consumers with a discount as long as oil prices remain
above that point.263 Producers will be protected by pegging the sales price above the cost of
production that allows for a return on the capital investment commensurate with the risk.264
The South African government expects that the biofuels program will create 25,000 jobs, achieve a
balance of payments savings of R 1.7 billion (approximately Ksh 15.7 billion).265 To ensure quality
and to protect consumers, the South African Bureau of Standards has developed the required
analytical and technical capacity to perform biofuels analysis, as well as fuel quality standards, based
on accepted standards in the United States, Europe, and Japan.266 Interestingly, the crops being
proposed include: sugarcane and sugar beet for ethanol, and sunflower, rapeseed, and soya for
biodiesel.267 The policy explicitly excludes the use of maize and jatropha due to “food security
concerns,” the need “to test usability of these [crops],” and concerns over jatropha’s potential
invasiveness.268
3.4.7 Sudan
The Kenana Sugar Company, which is the largest in Sudan, has a ten-year expansion plan
to produce 200,000 liters of ethanol per day from molasses.269 Sixty percent of the
feedstock will be produced by the parent sugar factory and the remaining 40% by other
sugar mills throughout the country.270 The company also has an additional 45,000
hectares of land suitable for sugar cane.271
3.4.8 Tanzania
Tanzania may be very well situated for large biofuels production. It’s climate and soils are
suitable to grow a range of biofuels feedstocks and, by one estimate, has over 40 million
hectares of agricultural land that is not being fully utilized and could be used for
biofuels.272 The government has created a National Biofuels Task Force, but does not
appear to have yet formulated a developed strategy. Nonetheless, several projects are beginning to
develop. Kakute Ltd. buys and sells jatropha seeds and seedlings throughout East Africa. They
have a small test plantation and provide consulting services to aspiring jatropha farmers.273
However, according to anecdotal reports and a review of a proposal they put forth for a project in
Kenya, they do not seem to have collected much scientifically rigorous information on the
agronomy or economics of jatropha farming. D1 Oils, a publicly-owned British company, had
announced plans for developing tens of thousands of acres of jatropha, but according to their
website their activities in Tanzania are now “dormant.”274
17 May 2008 52
3.4.9 Uganda
Uganda produces large quantities of sugar, grain, and oil crops that can be used for
ethanol and biodiesel production, but has yet to develop a comprehensive program for
harnessing this potential. Large quantities of crude ethanol are already being produced
from molasses, cassava, sorghum, and millet, but it is being consumed as beverage alcohol
rather than fuel. According to the World Health Organization, Uganda is one of the highest per
capita consumers of beverage alcohol in the world at about 19.4 liters of pure ethyl alcohol per
year.275 Uganda also produces about 400,000 tonnes of vegetable oil per year, of which 146,000 is
exported.276 About 25% of Uganda’s petroleum imports could be offset if the country converted its
surplus vegetable oil to biodiesel.
Despite this potential, development of a biofuels industry in Uganda has been slow, although the
country is discussing introducing an E20 mandate. The lack of a comprehensive government policy
and poorly considered projects are both part of the problem. In early 2007, President Yoweri
Museveni outraged many Ugandans by proposing to hand over a large swath of the previously
protected Mabira Forest to a company planning to plant sugarcane for ethanol.277 The government
eventually withdrew the proposal after public protests led to the looting and the death of at least one
person.278
Smaller biofuels projects are beginning to develop in Uganda, particularly biodiesel from jatropha ad
other crops. BIDCO Oil Company, a Thika-based vegetable oils company, is planning some sort of
biodiesel project, although very little information is currently available. Given the sheer volumes of
oils being processed by BIDCO – over 120 tonnes per day in Kenya alone279 – they may be very well
positioned to move forward rather quickly.
17 May 2008 53
4. ECONOMIC ANALYSIS
The economic case for biofuels in Kenya is quite strong. Kenya currently spends about $1 billion
per year in foreign currency on imported oil.280 Since the early 1990s, the Kenyan Government has
spent over $169 million exploring for oil and gas, with over 30 wells drilled but no discoveries.281 To
appreciate the potential value of biofuels, one only needs to consider the fact that many African
countries currently spend many times more for imported petroleum than they do on health care and
poverty alleviation programs.282 Even if only a portion of this money were redirected towards
domestic bioenergy programs, the social and economic benefits would be substantial.
The economic analysis in this section contains the availability of biofuels feedstocks and other
inputs, the economic feasibility for each feedstock, an overview of regional and national markets, the
potential income and employment benefits, current and projected consumption of petroleum, land
requirements for blending targets, potential foreign currency savings, and opportunities for carbon
financing. It is important to note that the analysis is based on the best available data. We indicate
where there are gaps in the analysis due to the lack of credible data and suggest areas for further
research. The most significant gaps are contained within the income and employment section. A
detailed survey of the cost of production, including labor, should be conducted for each feedstock in
order to assess which crops would provide the greatest benefits, and thus incentives, to farmers.
4.1 THE AVAILABILITY OF FEEDSTOCK, INPUTS & TECHNOLOGY
Biofuels feedstock is the primary and most expensive ingredient for biofuels production. Other
inputs, such as brewer’s yeast for ethanol fermentation and methanol and caustic soda for biodiesel
transesterification comprise a relatively small portion of each unit of biofuel produced and are
generally available in the local market. Thus, the supply and price of the feedstock is generally what
limits the quantity of biofuels that can be produced economically.
Land availability, agricultural practices and demand from competing uses are the main factors that
determine the supply and price of biofuels feedstock. Various scenarios for biofuels production in
Kenya can be envisioned. All of these are potentially feasible, but may not be practical due to
competing priorities such as food production (see Section 6.5 for an in-depth discussion of the
conflict between food and fuel). The analysis that follows lays out the most realistic potential
biofuels production scenarios (i.e., how much could be produced under different investment and
policy regimes), but leaves to latter sections of the study the discussion of what scenario may be
most appropriate for Kenya and what policies are most likely to achieve different levels of
production.
4.1.1 The Availability of Biofuels Feedstocks in Kenya
This Study analyzes three potential ethanol feedstock crops (cassava, sugarcane and sweet sorghum)
and seven biodiesel crops (castor, coconut, cottonseed, croton, jatropha, rapeseed and sunflower).
Three scenarios are discussed for each feedstock: status quo, potential production and optimized
potential production. The status quo scenario further distinguishes between “non-food competing”
and “food competing.” The “non-food competing” scenarios exclude feedstock currently being
used for food and animal feed. The “food competing” scenarios include all feedstock that is
17 May 2008 54
currently being produced regardless of whether any of it would otherwise be used for food and feed
consumption. The two “potential” scenarios distinguish between “new farm land” and “existing
farm land.” The former includes lands that are suitable for those crops but are not currently being
used for any agricultural production; the latter includes all suitable lands outside of protected areas
like National Parks.
The “status quo” scenario is based on actual production and consumption data from 2005 and 2006
from the United Nation’s Food & Agriculture Organization’s statistical database, which contains the
latest information provided by the Kenyan Ministry of Agriculture, as well as from industry data
supplied by the Kenya Sugar Board. The two other scenarios consider the potential production of
each feedstock based on suitability mapping conducted by GIS experts at ICRAF (see Appendices A
and B for feedstock suitability maps). The amount of acreage that is potentially suitable has been
discounted for each crop by 50% due to security, logistical or infrastructure limitations in certain
parts of Kenya. Additional reductions may be necessary to account for other conflicting land-uses
in certain areas.
The “optimized potential production” scenario considers the potential production capacity using
state-of-the-art agricultural inputs methods, such as high-yielding varieties under irrigation.
Projected yields for each crop under the “optimized potential production” scenario is based on
experiences from different parts of the world.
For sugarcane under the “status quo,” the “non-food competing” scenario utilizes the molasses
byproduct of sugar production, whereas the “food competing” scenario foregoes sugar production
in favor of using all of the cane juice for ethanol. Under the “potential” scenarios, only molasses is
considered for both “new” and “existing farm lands.”
Sorghum is also a peculiar case that warrants a special note. The type of sorghum currently grown
in Kenya does not contain a sweet stalk, as it is primarily grown for food. The sweet sorghum
varieties that can be used for ethanol can produce much higher yields, according to studies
conducted by ICRISAT in India and Thailand, and can also produce grain for food and sugar for
ethanol simultaneously. Thus, the “status quo” scenario does not include current production data
for sorghum, as it is unrealistic to assume that the grain currently being harvested from sorghum in
Kenya would ever be used for ethanol production. However, it is useful to note that over 163,000
hectares of land were used to grow sorghum in 2006, which could be replaced with sweet sorghum
varieties that would yield at least as much edible grain per hectare, as well as a significant cash crop
of sweet stalks for ethanol production.283
For castor, there is no difference between the “non-food” and “food competing” scenarios because
it is an inedible crop. Regarding croton and jatropha, very little reliable information exists on
current production in Kenya, although quite a number of croton and jatropha trees are already
growing wild or as natural fencing throughout the country. Jatropha is also being grown in
plantations of various sizes in increasing quantities. Finally, a note about rapeseed, the primary
feedstock for biodiesel in Europe. Rapeseed is being grown in Kenya in small quantities, mainly as a
rotational crop, but little hard information exists in exact production numbers, so we have left it
blank under the “status quo” scenarios.
17 May 2008 55
4.1.1.1 Status Quo Feedstock Production Scenario
The numbers for acreage, production and biofuels produced are presented in thousands of hectares,
tonnes or liters. The yields are the average real-world production per hectare in Kenya, which
notably are lower than in many other parts of the world.
TABLE 2: STATUS QUO FEEDSTOCK PRODUCTION SCENARIO284

Non-Food Competing Food Competing
Hectares Yield Production Biofuel Production Biofuel
(‘000) (T/Ha) (‘000 tonnes) (‘000 liters) (‘000 tonnes) (‘000 liters)
Ethanol
Cassava 68.5a 9.6a n/aa n/aa 657a 111,690e
Sorghum+
Sugarcane 147.7b 33.4b 4,933b 49,330d 4,933b 345,310d
Biodiesel
Castor 13.0a 0.23a 3a 1,344f 3a 1,344f
Coconut 37.1c 1.64c n/ac n/ac 61c 22,204g
Cottonseed 36.3c 0.62c n/ac n/ac 22.5c 3,285h
Croton++
Jatropha++
Rapeseed+++
Sunflower 13.0c 0.92c 1.31c 542i 12c 4,968i
Under the non-food competing scenarios, only sugarcane is currently available in sufficient
quantities to offset a significant amount of petroleum consumption, especially if competition from
imported sugar makes it more economically viable to produce ethanol from cane juice than from
molasses (see Section 6.5). Existing production of biodiesel feedstocks are not sufficient to offset
much current diesel consumption, although could be used for small-scale farm and community-
based projects.
4.1.1.2 Potential Feedstock Production Scenario
The numbers for acreage, production and biofuels are presented in millions of hectares, tons or
liters. The yields are the average real-world production per hectare in Kenya, which notably are
lower than in many other parts of the world.
TABLE 3: POTENTIAL FEEDSTOCK PRODUCTION SCENARIO285

New Farm Lands Existing Farm Lands
Yield Land Production Biofuel Land Production Biofuel
(T/Ha) (m. Ha)u (m. tonnes) (m. liters) (m. Ha)u (m. tonnes) (m. liters)
Ethanol
Cassava 9.6a 2.08 19.97 3,395i 4.15 39.84 6,773i
Sorghum+ 35.0c 5.90 206.50 8,260k 11.06 387.10 15,484k
Sugarcane 33.4b 0.09 3.01 30j 0.83 27.72 277j
Biodiesel
Castor 0.23a 6.82 1.57 703l 10.42 2.40 1,075l
Coconut 1.64d 0.03 0.05 18m 0.18 0.29 105m
Cottonseed 0.6d 1.42 0.85 124n 1.76 1.06 154n
17 May 2008 56
Croton 2.50e 0.65 1.63 548p 2.56 6.40 2,150p

Jatropha 2.50f 6.26 15.65 5,258q 9.41 23.53 8,578q
Rapeseed 2.00g 0.16 0.32 125r 0.82 1.64 643r
Sunflower 0.92d 3.48 3.20 1,325o 5.78 5.32 2,202o
Sorghum would provide the greatest opportunity to increase ethanol feedstock production without
competing with existing agricultural production. If just over 57,000 of the 5.9 million hectares that
are potentially suitable (but outside of existing agricultural production areas) were planted with sweet
sorghum, Kenya could produce enough ethanol to offset about 10% of current petrol consumption.
Jatropha and sunflower seem to provide the greatest amount of biodiesel feedstock, based on
available and suitable lands. However, the untested nature and long maturation period for jatropha,
and the difficulty of growing sunflower due to pests, as well as its competing food uses, make these
feedstocks somewhat less attractive (at least in the short run). Croton, although it has a long
maturation period similar to jatropha, is not only suitable in large areas, but it is also already being
grown in many areas, so could begin providing an immediate source of biodiesel feedstock, which
could grow over time. Castor and rapeseed could provide large quantities of feedstock in the near
term, with castor maximizing more semi-arid areas and rapeseed being grown in conjunction (as a
rotational crop) with wheat, barley and other staples.
4.1.1.3 Optimized Potential Feedstock Production Scenario
The numbers for acreage, production and biofuels are presented in millions of hectares, tonnes or
liters. The yields are optimized based on performance from other parts of the world and from
scientific literature. The “optimized” scenario is intended to show what a difference higher yields
would make in terms of the availability of biofuels feedstocks, rather than to demonstrate an easily
attainable amount of production.
TABLE 4: OPTIMIZED POTENTIAL FEEDSTOCK PRODUCTION SCENARIO286

New Farm Lands Existing Farm Lands
Yield Land Production Biofuel Land Production Biofuel
(T/Ha) (m. Ha)u (m. tonnes) (m. liters) (m. Ha)u (m. tonnes) (m. liters)
Ethanol
Cassava 20.00a 2.08 41.6 7,072k 4.15 83 14,110k
Sorghum+ 70.00c 5.90 413 16,520m 11.06 774 30,968m
Sugarcane 68.34b 0.09 6.15 61.5l 0.83 56.72 567l
Biodiesel
Castor 1.2d 6.82 8.18 3,666n 10.42 12.05 5,602n
Coconut 3.33e 0.03 0.1 36.4o 0.18 0.6 218o
Cottonseed 3.00f 1.42 4.26 622p 1.76 5.28 771p
Croton 2.50h 0.65 1.63 546r 2.56 6.4 2,150r
Jatropha 4.20i 6.26 26.29 8,834s 9.41 39.52 13,279s
Rapeseed 3.50j 0.16 0.56 220t 0.82 2.87 1,125t
Sunflower 3.00g 3.48 10.44 4,322q 5.78 17.34 7,179q
17 May 2008 57
4.1.2 The Availability of Non-Feedstock Inputs
Other inputs, such as electricity, labor, transport and processing chemicals used to convert the
feedstock into either ethanol or biodiesel must also be factored in. Electricity prices in Kenya
average about Ksh 6.7 per kilowatt-hour for small to medium sized industrial customers, and slightly
less for larger commercial customers.287 The cost of manual labor, for agricultural production and
processing, is relatively low compared with much of the rest of the world. Experienced engineers
and managers are also available in the local employment pool. Skilled workers for ethanol
production exist in Western Kenya, although many more skilled workers will be needed to meet
anticipated increases in ethanol production.
Transport in Kenya is a logistical hurdle that can also drive up the cost of production. Poorly
maintained roads and lorries, and the lack of any viable rail alternatives, means that biofuels
production should be centered as close to where the feedstock is produced as possible. The scale of
production also should be based in part on how much feedstock can be sourced locally. Security is
another concern that may require extra costs to protect equipment and supply routes, especially
considering the instability that has followed the disputed 2007 national elections. While these
factors increase the overall cost of production to a degree, relatively cheaper labor costs combined
with the potential to cogenerate electricity from the byproducts of feedstock processing (bagasse for
sugar and sorghum, and biogas from oil seed cake) can help to offset these added costs of
production.
Certain chemicals are essential to biofuels production. These include yeast and enzymes for ethanol,
and methanol, caustic soda, and magnesium silicate for biodiesel production. Some of these
chemicals are readily available in the larger urban markets, while others would have to be imported.
4.1.3 The Availability of Biofuels Processing Technology
Technology for biofuels production either already exists in Kenya, as is the case for ethanol, or can
be imported rather easily, as is the case for biodiesel. Virtually no practical experience exists in
Kenya regarding biodiesel manufacture, although KIRDI has begun to experiment with biodiesel
production technology on a very small scale. Expertise in biofuels production can be transferred
along with the technology needed for manufacture. The production processes and the technology
required are well understood and not particularly difficult to emulate. Machinery and equipment can
be fabricated locally once the scale of biofuels production justifies the capital cost of manufacturing
plants.
4.2 ECONOMIC FEASIBILITY ANALYSIS
This section analyzes the economic feasibility of producing ethanol and biodiesel in Kenya. There
are three main components to the cost of production: feedstock costs, capital investment and
operating expenses. Fuel taxes, which can account for one-third of the retail price in Kenya, are also
a key part of the equation. The cost of feedstock comprises a majority of the overall costs for both
ethanol and biodiesel. Feedstock costs can also fluctuate widely based on the elastic demand for
competing uses. For example, the cost of sugarcane-based ethanol is highly influenced by the
competing price of sugar. We distinguish between the current cost of production for each
feedstock, which is estimated from various sources including: ethanol production companies, the
17 May 2008 58
Ministry of Agriculture, the Kenya Sugar Board, the United Nation’s Food and Agriculture
Organization’s statistical database (FAOSTAT), ICRISAT, and a survey of farmers and agricultural
officials throughout Kenya conducted in November and December of 2007. Citations to the
specific sources of information for each feedstock are included.
We chose to conduct the economic feasibility analyses for ethanol and biodiesel differently due to
the fact that ethanol is already being produced on a commercial scale and biodiesel is not. For
ethanol we analyze the current cost of production of sugarcane-based ethanol compared with
production costs from other parts of the world. The cost of production for ethanol produced from
sweet sorghum and cassava in other countries is then compared with projected costs from those
feedstocks in Kenya. For biodiesel, we compare the projected costs of production for seven
different feedstocks at three different scales of production.
4.2.1 Economic Feasibility of Ethanol
Ethanol has been produced in Kenya for many years from the molasses residue of sugar production.
The cost of molasses as of the date of this publication ranged between about Ksh 2,000-2,500, or
$31-38, per tonne.288 At an average of about 4 tonnes of molasses per cubic meter (1,000 liters) of
ethanol, the cost of the feedstock portion of ethanol production is on average about Ksh 9, or $0.14,
per liter, which is extremely cheap by global standards (see Figure 4).
Despite Kenya’s relatively low molasses prices, the overall cost of ethanol production remains higher
than in the other five sugarcane ethanol producing countries or regions considered in this study.
The current cost of production at the two ethanol plants in Kenya is approximately Ksh 33-40, or
$0.51-$0.61, per liter.289 The next most expensive production costs, from highest to lowest, are:
Thailand ($0.44); Central America ($0.43); India ($0.42); Colombia ($0.39); and Brazil ($0.32) (see
Figure 5).290 Thus, even though feedstock costs in Kenya are less than 60% of those in Brazil (the
next cheapest), the overall cost of ethanol production is 75% more in Kenya.
FIGURE 4: COST OF MOLASSES FEEDSTOCK IN KENYA & THE WORLD291
Country Kenya Brazil Colombia Central America India Thailand

$ per liter $0.14 $0.24 $0.32 $0.30 $0.28 $0.32
17 May 2008 59
The main reasons for the higher operating costs in Kenya are poor infrastructure and the relative
inefficiency of the Kenyan ethanol model. All of the other countries analyzed produce sugarcane
ethanol as part of the sugar production process, whereas ethanol production in Kenya is a stand-
alone industry. The integrated approach harnesses the heat and electricity from the cane bagasse to
power the plant, significantly reducing power costs. In Kenya, heavy fuel oil is the main source of
power for ethanol production, although biogas produced from ethanol wastes does offset some of
these costs.292 Other benefits of the integrated approach are lower capital and employment costs
due to the lack of duplication in running two separate enterprises. Not surprisingly, Mumias Sugar,
which is planning to integrate ethanol production into its sugar factory in Western Kenya, expects to
cut the cost of ethanol production to about Ksh 25, or $0.38 per liter.293
FIGURE 5: COST OF SUGARCANE ETHANOL IN KENYA & THE WORLD294
Country Kenya Brazil Colombia Central America India Thailand

$ per liter $0.56 $0.32 $0.39 $0.43 $0.42 $0.44
Little information is available on the cost of production for ethanol produced from sweet sorghum
and cassava. However, relying on preliminary assumptions from research conducted by ICRISAT in
India and Thailand, sweet sorghum appears to have potential to augment the supply of sugarcane
feedstock in Kenya. Similar to sugarcane, sweet sorghum can produce two products simultaneously,
a sweet stalk for ethanol and grain for food. The potential yields are similar to sugarcane, although
sweet sorghum has the potential to grow in somewhat drier climates and can produce at least one
crop per year (as opposed to the 18-24 months required by sugarcane). Because very little sweet
sorghum has been grown in Kenya, it is difficult to predict its economic feasibility.
High yielding varieties of sweet sorghum that have been developed by ICRISAT reportedly can
produce between 30-40 tonnes of sweet stalk per year un-irrigated over two crops, in addition to
about 1.2 tonnes of grain. Yields could reach twice that much under irrigation. The estimated cost
of production from India is about Ksh 55,800 per hectare. Subtracting Ksh 14,400 from income
17 May 2008 60
received from grain leaves Ksh 41,400 per 35 tonnes of sweet stalk, or Ksh 1,183 per tonne. At Ksh
1,200 per tonne, which is enough to produce about 40 liters of ethanol, the per liter cost of
production for sweet sorghum would be about $0.46, which is $0.32 more than the current cost of
molasses. Even if we incorporate energy savings in the production process through the use of
bagasse, the cost of feedstock must be reduced significantly to make sweet sorghum an economically
attractive alternative to sugarcane. Planting trials, which are currently being conducted by both
Agro-Chemical and Spectre, will help to verify some of these assumptions and determine the precise
viability of sweet sorghum as an ethanol crop in Kenya.
Ethanol from cassava in Thailand costs about $0.37 per liter at an 18 million liter per year plant.295
Operations costs are higher than for molasses ethanol production in Thailand, but feedstock costs
are about 34% lower for cassava.296 In Kenya, it is difficult to ascertain a price for cassava that
would be used as a feedstock for ethanol, although the Ministry of Agriculture Guidelines put the
price of cassava at Ksh 6,500 per tonne, which is equivalent to about $0.59 per liter.297 However, the
estimated cost of production is only about Ksh 3,300 per tonne, so the price as an ethanol feedstock
could potentially be lower than the current market price.298 This is more than 1.6 times the cost of
cassava feedstock in Thailand. Thus, for cassava to become a feasible ethanol feedstock in Kenya,
prices must come down substantially.
Another factor to consider is the impact of fuel taxes on economic feasibility. As is described in
Section 5.9, there is a Ksh 30 ($0.46) per liter tax on petrol. Considering that ethanol has about two-
thirds the energy content as petrol, it would take about three liters of ethanol to replace two liters of
petrol. Thus, applying the equivalent tax per unit of energy would amount to about Ksh 20 ($0.31)
per liter of ethanol. Applying the same 3:2 ratio to the retail price, would competitively price ethanol
at about Ksh 60 ($0.92) per liter with petrol at the current price of about Ksh 90 ($1.38) per liter.
Thus, for ethanol to be feasible in the market without any help from the government in terms of tax
reductions or subsidies, the pre-tax price of each liter of ethanol must be less than roughly Ksh 40
($0.62) per liter. Of course, this will fluctuate with the price of petrol.
The current average production cost of Ksh 36.5, or $0.56, per liter of sugarcane ethanol is barely
economically feasible as a substitute for petrol, assuming the Ksh 3.5 per liter difference between the
cost of production and the pump price is sufficient to cover the cost of transport, blending,
marketing and profits. However, competitive markets for ethanol, as discussed more in Section
4.3.1, provide ethanol producers with more lucrative alternatives, such as potable alcohol and
methylated spirit, to ethanol fuel. Both Agro-Chemical and Spectre are currently selling ethanol for
drinking alcohol and industrial uses at a pre-tax average price of about Ksh 50, or $0.77, per liter.299
Thus, absent some incentive in the form of a tax reduction or subsidy, ethanol producers would
have to discount their product by about 24% for it to be economically feasible as an alternative to
petrol. Alternative sources of ethanol, such as sweet sorghum and cassava, that could be even more
expensive to produce, would require even more support to become viable petrol replacements.
Section 7 discusses how tax policy could be used to make ethanol fuel competitive.
4.2.2 Economic Feasibility of Biodiesel
We have evaluated three different scales of production for biodiesel: farm scale (~180,000 liters per
year), small commercial scale (~2 million liters per year), and large commercial scale (~12 million
liters per year). By international standards, a 12 million liter per year plant is actually quite small.
17 May 2008 61
However, we have purposely limited the large commercial plant size evaluated in this study
considering the very nascent stage of the biodiesel industry in Kenya and the fact that very large,
centralized production plants for biodiesel are not likely to prove practical in the near-term given
limitations on land availability for growing oil crops for biodiesel and the country’s poor transport
infrastructure. We also feel that it is much more sustainable to scale production to the amount of
feedstock that can be grown within a particular location and to have many smaller plants near to
where the feedstock is produced and the fuel will ultimately be consumed.
The cost of biofuels feedstock is a factor of the price per tonne of the oilseed, the percentage of oil
that can be extracted from the seed (known as “oil content”), and the revenue that can be collected
from the seedcake that is leftover after the oil has been extracted. For edible crops, such as coconut,
cottonseed, rapeseed and sunflower, the seedcake can be sold as animal feed. For inedible crops,
such as castor, croton300 and jatropha, the seedcake can be converted into bioenergy, either in the
form of biogas or electricity, which can be sold or used to power the biofuel plant. The estimated
price of seed is based on discussions with farmers, data from the Ministry of Agriculture, KARI and
FAOSTAT. The revenue from the seedcake is estimated from the market price of animal feed and a
discounted value of the biogas that could be produced. The added capital cost of a biogas digester is
included for the three feedstocks for which biogas revenue is projected.
TABLE 5: BIODIESEL FEEDSTOCK COSTS301

FEEDSTOCK C OSTS Castora Coconutb Cottonc Crotond Jatrophae Rapeseedf Sunflowerg
Cost of Seed (Ksh/tonne) 20,000 29,327 20,000 15,000 15,000 26,000 31,984
Oil Content (%) 40% 65% 13% 30% 30% 35% 37%
Unrefined Oil (Ksh/L) 44.64 40.28 137.36 44.64 44.64 66.33 78.24
Seedcake Revenue
Animal Feed (Ksh/L) 2.33 89.63 19.90 24.85
Biogas (Ksh/L) 6.04 9.40 9.40
TOTAL (Ksh/L) 38.60 37.95 47.73 35.24 35.24 46.43 53.39
Croton and jatropha are the cheapest feedstocks, although they take the longest to mature and thus
are potentially less attractive for farmers, especially if they cannot readily obtain financing for a long-
term investment. As demonstrated in Section 4.4.2, a jatropha plantation could take more than 10
years to pay back the initial investment. Another caveat is that jatropha is among the least
understood oil crops in Kenya, with very little practical experience in growing and no source of
certified seeds yet identified. Thus, jatropha’s overall potential is much less certain than the other oil
crops considered in this study, despite its attractive qualities.
At current prices, coconut is the third cheapest feedstock. The coconut sub-sector is also quite
underutilized, despite a broad potential market for many valuable products. One recent survey
estimated that only 25% of the coconut economy is currently being exploited.302 Income from
biofuels could provide farmers with an incentive to increase production by planting higher yielding
varieties and taking better care of the trees they grow. Castor oil is the fourth cheapest feedstock
and has great potential to be grown in large quantities in marginal areas that do not compete with
food. Another advantage of castor is that it can be harvested within nine months of planting and
then does not require replanting for another four years. Kenyans have a history of growing castor,
and so are familiar with the crop, although the local market has caused many farmers to lose interest.
Biofuels could reignite enthusiasm for this potentially important crop.
17 May 2008 62
The three most expensive crops – cottonseed, rapeseed and sunflower – have competing uses for
human and animal consumption. The global price for these commodities has skyrocketed in the
past two years to such a degree, that they have become prohibitively expensive in most parts of the
world for use in biofuels without large subsidies. To the degree that these crops are promoted by
government and the private sector, the priority market should be for edible oils, first at the local
level and then for export as production permits. If significant surpluses can be produced, which is
doubtful considering the amount of edible oils Kenya imports, then these crops could be considered
for biofuels.
In addition to feedstock, the other three components of cost are capital investments, operations and
taxes. Table 6 provides a per liter breakdown of these costs (the specific breakdown of capital and
operations costs are included In Appendix F). We assume financing with 50% debt and 50% equity.
Capital costs plus six months of operations costs are included. The debt is based on a 10-year loan
with an annual interest rate of 10%. The equity investment assumes a 15% annual return. These
costs are summarized on a per liter basis in the first line of Table 6.
The sale of glycerol, which is a byproduct of biodiesel production, is an added source of revenue.
However, global prices for raw, unrefined glycerol have plummeted due to the oversupply that has
been created by the biodiesel industry. As of May 2007, the sale of unrefined glycerol was worth
about EUR 10 per tonne of biodiesel produced, which is the equivalent of about EUR 0.009, or Ksh
0.89, per liter of biodiesel.303 The local price of unrefined glycerol in Kenya may be at least a bit
higher, but we have chosen not to include it within the economic analysis due to the uncertainty of
the local market and the extremely low and falling prices worldwide. Adding glycerine processing to
the production process is another option for increasing the value of the byproduct, as refined
glycerine will fetch a higher price, although this will also add substantial costs to the capital
investment.
TABLE 6: BIODIESEL NON-FEEDSTOCK COSTS

NON-FEEDSTOCK COSTS Farm 2m 12m
Capital & Start-Up Financing 5.61 2.90 3.15
Operations 22.94 13.24 11.23
Taxes 19.10 19.10 19.10
Transport, Blending & Profit 5.00 5.00
TOTAL NON -FEEDSTOCK 47.64 40.23 38.47
Not surprisingly, the scale of production is inversely proportionate to the cost of production per
liter, with the exception of the capital and start-up financing being slightly cheaper for the small
commercial than the larger commercial. The cost of methanol, sodium hydroxide, and magnesium
silicate is based on market prices in Nairobi as of December 2007. All chemicals are readily available
in the local or regional market. Taxes are calculated based on the current combined tax burden per
liter of petroleum diesel, discounted by 7% to account for the reduced energy content of biodiesel (it
will take 7% more biodiesel to replace each unit of petroleum diesel, so the overall revenues to the
government would be the same). The cost of transport, blending and wholesale profit must also be
accounted for, although only for the two commercial scales of production.
The overall cost of production presented in Figure 6 includes all feedstock and non-feedstock costs
for each feedstock at the three different scales of production. To determine overall feasibility, the
cost of production plus taxes must be compared to the current pump price for petroleum diesel,
17 May 2008 63
which is about Ksh 80 per liter at the time of this publication. However, discounting for the lower
energy value in biodiesel, we can reduce the comparative price of petroleum diesel by 7% to Ksh
74.4 per liter, which is represented by the red horizontal line in Figure 6.
Thus, at current retail prices, biodiesel production is not economically feasible unless the tax burden
is reduced or eliminated. However, fuel taxes that ordinarily attach at the point of sale may be
inappropriate for an on farm venture where no commercial sale is taking place (more on tax policies
in Section 5.9 and Section 7). Nor would it be feasible to produce biodiesel at the commercial scale
at current prices with a full fuel tax burden. At these levels and with the price of diesel likely to
fluctuate below its current retail price, investing in a new biodiesel venture in Kenya seems risky
without some governmental support.
FIGURE 6: BIODIESEL COST OF PRODUCTION BY FEEDSTOCK & SCALE OF PRODUCTION
B100 COST (Ksh/L) Castor Coconut Cotton Croton Jatropha Rapeseed Sunflower
Farm 86.84 85.59 95.38 83.49 83.49 94.07 101.03
2m 79.01 78.18 87.97 75.66 75.66 86.66 93.62
12m 77.14 76.42 86.20 73.78 73.78 84.90 91.86
4.3 KENYAN AND GLOBAL BIOFUELS MARKETS

4.3.1 Ethanol Markets
Ethanol is used for alcoholic beverages, pharmaceutical and industrial applications, and for fuel.
Seventy-seven percent of global ethanol production was used for fuel in 2006, with fourteen and
nine percent for beverages and industrial use, respectively.304
Current ethanol production in Kenya amounts to about 20 million liters per year, the vast majority
of which is exported to Uganda and the Democratic Republic of Congo for beverage use.305 A small
share is also denatured with methanol and sold as methylated spirit for industrial uses in Kenya. The
17 May 2008 64
current expansion in ethanol production that is being planned by Spectre International and Mumias
Sugar would add over 100 million liters of production at full capacity.
A ten percent ethanol blend (E10) in Kenya would require approximately 93 million liters a year by
2013. At full production capacity, the two current ethanol plants in Kenya could produce about half
the required amount, or 45 million liters per year. However, current expansion plans at Spectre and
Mumias would add nearly 80 million liters additional capacity. In 2006, European countries
imported 2.36 billion liters of ethanol.306 With average production costs, excluding capital costs, of
about Ksh 38 per liter for grain-based ethanol produced in Europe, such a market could be
attractive for any surplus ethanol produced in Kenya.307
Closer to home, African nations imported about 154 million liters of ethanol in 2006, with a demand
that is surely to rise in the coming years.308 Uganda would need about 10.6 million liters a month to
comply with its proposed E20 mandate, much of which would have to be imported. In 2006,
Uganda produced enough molasses for about 20 million liters of ethanol.309 If all cane produced in
Uganda went directly into ethanol, Uganda could produce roughly 11.37 million liters per month.
Another potential local market is the use of ethanol in cook stoves and lamps. If affordable, this
domestic market could reduce the use of unsustainable charcoal and fuel wood. However, studies
using ethanol for domestic fuel purposes have not yet demonstrated economic feasibility.310
4.3.2 Biodiesel Markets
Biodiesel is used for transport fuel, stationary power, farm equipment use and marine power. A two
percent blend of biodiesel (B2) into the local transport market would require about 32 million liters
of biodiesel by 2013. Many communities throughout Kenya currently derive electricity from diesel
generators. Biodiesel could complement, or completely displace, the use of petroleum diesel for
many stationary applications. Safaricom and Celltel alone use millions of liters of diesel to power
remote cell phone towers throughout the country and have expressed interest in using biodiesel in
lieu of petroleum diesel.
Straight vegetable oil that has not been processed into biodiesel could potentially be used in a wide
variety of industrial applications, such as for transport with specially modified vehicles and farm
equipment. This could reduce the costs of production and provide significant savings as a
replacement for petroleum diesel. Based on the feedstock costs listed above, a customer might save
as much as Ksh 30 per liter. However, it must be stressed that most vehicle manufacturers will not
extend their warranties to customers using straight vegetable oil (see Appendix E for manufacturers’
policies on biodiesel). Plus, the cost and logistics of modifying the engine with a pre-heating system
would make such use prohibitive in many situations. Nonetheless, research should be undertaken to
test the use of SVO in various transport markets.
Another possibility is the use of straight vegetable oil as a fuel replacement for stationary power.
Safari camps and other off-the-grid users could benefit from the simplicity and cost of using locally
supplied vegetable oil, and avoid the need for long transport of fuel and processing costs for turning
the SVO into biodiesel. However, before people start experimenting on their own equipment,
studies should be undertaken for performance and engine modifications necessary for using SVO in
17 May 2008 65
generators. This type of project could be undertaken by KIRDI in conjunction with interested
private parties.
A third avenue for SVO is for use as a substitute for kerosene, firewood and charcoal. Domestic
lighting and cooking needs are often met with environmentally damaging and unhealthy fuels. The
use of SVO can provide an economical alternative. However, more research needs to be done to
identify and develop affordable and practical lamps and stoves that can burn SVO.
As indicated above, rapidly expanding markets for export of ethanol and biodiesel provide
tremendous growth opportunities for countries like Kenya, although trade restrictions, such as
import tariffs, could impede these markets. The Harmonized Commodity Description and Coding
System of the World Customs Organization does not yet have a clearly defined code for biofuels
under which ethanol and biodiesel could be classified.311
4.4 EMPLOYMENT & INCOME BENEFITS
The potential employment and income benefits of biofuels in Kenya are enormous. It is estimated
that the jobs-to-investment ratio for biofuels is about 100 times higher than for crude oil
refineries.312 Expanded agricultural production of biofuels feedstocks would provide farm jobs, as
well as opportunities for smallholders to expand production into new cash crops. By focusing on
crops that can grow in semi-arid agro-ecological zones, economic activity could revive poor rural
economies that currently have few other options.
4.4.1 Ethanol Employment & Income
An additional 93 million liters of ethanol (enough for a national E10 blend by 2013) could yield
about Ksh 4.65 billion ($72 million) per year to the economy.313 Approximately 500 to 1,000 new
jobs could be created in the manufacturing and transport sectors by the planned ethanol production
expansion, according to estimates based on current and planned employment at ethanol plants in
Western Kenya and job creation projections for ethanol plants in the developed world.314 Mumias
planned ethanol plant is expected to employ up to 100 new people, including at least 20 professional
staff, who will earn an average of Ksh 100,000 per month.315 The workers at the Mumias ethanol
plant will earn between Ksh 15,000 and 35,000 per month.316
Tens of thousands of hectares of new feedstock production would be necessary to produce an

additional 93 million liters in Western Kenya (see Table 9). This would require thousands of farm
workers and managers, although more research is required to calculate the specific number of
workers that would be required for cassava and sweet sorghum. Based on the current number of
farm workers in the sugar industry, one wage farm job is created for every 54.9 hectares planted and
one casual farm job for every 30.4 hectares.317 Thus, growing enough sugarcane for an additional 93
million liters of ethanol would create 341 new wage farm jobs and 617 new casual farm jobs if the
sugarcane is turned directly into ethanol without first producing any sugar. If sugar is produced and
the ethanol is made from molasses, than approximately seven times as many farm jobs would be
created. Of course, this is all dependent on land availability for this scale of production.
Another way of considering the benefits is to compare the potential net income from each
feedstock. Reliable data on cost of production, yields and market prices are only available for
17 May 2008 66
cassava and sugarcane. As sweet sorghum is not yet established in Kenya, we can estimate costs
based on the projected cost of production by ICRISAT in India. As Table 7 indicates, farmers stand
to make about three times from cassava over sugarcane. However, ethanol from cassava would be
prohibitively expensive at Ksh 6,500 per tonne (see Section 4.2.1), so prices would have to come
down to become a viable ethanol feedstock.
TABLE 7: FARM INCOME FROM DIFFERENT ETHANOL FEEDSTOCKS318

Feedstock Costs Cassavaa Sugarcaneb Sweet Sorghumc
Stalk Grain
Cost of Production (Ksh/Ha) 31,700 57,000 57,200
Sale Price (Ksh/tonne) 6,500 2,027 n/a n/a
Current Yield per Hectare 9.6 33.4 35 1.2
n/a n/a
Current/Projected Income (Ksh/Ha) 30,700 10,702 n/a
4.4.2 Biodiesel Employment & Income
Approximately one non-farm job could be created for every 100,000 to 180,000 liters of biodiesel
production capacity.319 Thus, about 229 new non-farm jobs would be created if Kenya adopted a B2
policy requiring the production of roughly 32 million liters of biodiesel by 2013. Thousands of farm
jobs would also be created, although the precise number will depend on the efficiency of production
in terms of yield per hectare, which is currently quite low for many of the feedstock crops. Further
research must be conducted to ascertain the specific number of farm jobs that would be created for
each different biodiesel feedstock.
To be sustainable and to benefit the largest number of Kenyans, any future biodiesel industry should
maximize smallholder farm income by selecting feedstocks that will yield the highest return on
investment. The availability of oilseeds in large enough quantities for commercial biodiesel
production will depend on which crops farmers see as the most beneficial. Although revenues can
be calculated for each crop, based on yield per hectare and the current market price of each
feedstock, net income is more challenging. Information on the cost of production is not readily
available and will require further research. KARI has the capacity and the interest in conducting
such important work and should be engaged to do so as soon as possible.
Due to the overwhelming focus on jatropha by the Ministry of Energy, private farmers, investors
and NGOs, we have analyzed the potential farm income for a theoretical 50-hectare plantation. The
calculation assumes a yield of 2.5 tonnes per hectare (1.5 kilograms per tree) after seven years with a
3 by 2 meter spacing (1,666 trees per hectare).320 The price per tonne of seeds is Ksh 15,000, which
is the price used in the feasibility analysis contained in Section 4.2.1 above. Importantly, the cost of
land is not included. These numbers are mere estimates and should not be relied upon for planning
specific projects.
The plantation is designed to minimize the up-front establishment costs by planting 10 hectares per
year over the first five years. This approach would require about 12 years before the entire
plantation is fully matured. It will take more than five years before the plantation turns an annual
operating profit and ten years before such an investment produces a cumulative net income (see
17 May 2008 67
Figure 7 with accompanying table). The investment is projected to have a 16.19% internal rate of
return over 30 years.
TABLE 8: 50 HECTARE JATROPHA PLANTATION COSTS & REVENUE

Costs Revenue
Yr Ha Est. Filling Maint. Harvest Total Seed (T) Oil Ksh/T Total
In Cost (L) Revenue
1 10 320,073 32,950 249,000 0 602,023 0.0 0 15,000 0
2 20 320,073 32,950 279,000 62,400 694,423 0.8 280 15,000 12,495
3 30 320,073 32,950 309,000 124,800 786,823 2.5 840 15,000 37,485
4 40 320,073 32,950 324,000 187,200 864,223 6.7 2,239 15,000 99,960
5 50 320,073 32,950 339,000 249,600 941,623 15.0 5,038 15,000 224,910
6 50 105,000 312,000 417,000 31.7 10,636 15,000 474,810
7 50 90,000 374,400 464,400 51.6 17,353 15,000 774,690
8 50 75,000 436,800 511,800 75.0 25,190 15,000 1,124,550
9 50 75,000 499,200 574,200 95.8 32,187 15,000 1,436,925
10 50 75,000 561,600 636,600 112.5 37,785 15,000 1,686,825
11 50 75,000 624,000 699,000 120.8 40,584 15,000 1,811,775
12 50 75,000 686,400 761,400 125.0 41,983 15,000 1,874,250
7,864,899 9,558,675
FIGURE 7: CUMULATIVE NET INCOME 50 HECTARE JATROPHA PLANTATION OVER 12 YEARS
Yr Costs Revenue Net Income Cumulative Income

1 602,023 0 -602,023 -602,023
2 694,423 12,495 -681,928 -1,283,951
3 786,823 37,485 -749,338 -2,033,288
4 864,223 99,960 -764,263 -2,797,551
5 941,623 224,910 -716,713 -3,514,264
6 417,000 474,810 57,810 -3,456,454
7 464,400 774,690 307,708 -3,062,963
8 511,800 1,124,550 609,002 -2,453,962
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9 574,200 1,436,925 857,935 -1,596,026

10 636,600 1,686,825 1,044,602 -551,424
11 699,000 1,811,775 1,106,736 555,312
12 761,400 1,874,250 1,106,603 1,661,914
Jatropha is similar to other crops like coffee and tea that take years to mature. However, unlike
coffee and tea, that are well-understood crops with established yields and production costs, jatropha
plantation farming is still in its infancy and many questions remain. Many of the assumptions we
have relied upon, such as un-irrigated yield, could vary significantly from the experience in India we
have borrowed from. Nonetheless, it seems nearly certain that farmers will require significant long-
term financing to develop commercial jatropha plantations. Smallholders, who do not have such
large land areas, and can provide much of the labor themselves, may begin planting on boundaries
and unused land, but may also require significant economic support to develop smaller jatropha
plantations.
4.5 CURRENT & PROJECTED PETROL & DIESEL CONSUMPTION
Kenya consumed a total of 509 million liters of petrol and 1.22 billion liters of automotive diesel in
2006, or about 1.4 and 3.3 million liters per day, respectively.321 Consumption of petroleum
products overall has risen by an average of 1.6% over the past 25 years and 3.7% since 2003.322
Assuming an average growth of 2.8% per year, Kenya will require 2.7 and 6.5 million liters per day
of petrol and diesel, respectively, by 2030.
An additional 77 million liters of ethanol would be needed to supply sufficient quantities for a
national 10% (E10) blend at current consumption levels, but would have to grow to 93 million liters
by 2013 and to 148 million liters by 2030. A national B2 would require about 26 million liters of
biodiesel at current consumption levels, which would have to grow to 32 million liters by 2013 and
to 50 million liters to meet projected demand by 2030.
4.6 LAND AVAILABILITY FOR PRODUCING E10 & B2
Another significant factor in choosing which crops should be emphasized for biofuels is to consider
the amount of land that would be required to meet certain ethanol and biodiesel production levels.
For purposes of this study, we have chosen to analyze the land that would be required to produce 93
million liters of ethanol and 32 million liters of biodiesel, enough for E10 and B2 blends by 2013.
Suitability mapping is also very helpful in determining where different crops can grow without
competing with existing agricultural production.
Tables 9 and 10 list the number of hectares that would be required for each feedstock to produce
E10 and B2 blending levels by 2013 and, based on calculations derived from the suitability maps,
what percentage of suitable lands outside of existing food and cash crop areas would be required.
Ample non-competitive, but suitable, land is available for cassava and sweet sorghum. If sugarcane
was used, about one-fifth of potentially suitable land that is not currently being used for food or
cash crops would be required. Not enough suitable land exists to produce an additional 93 million
liters from molasses.
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TABLE 9: LAND REQUIRED FOR 10% (E10) ETHANOL PRODUCTION BY 2013323

Ethanol Yield Hectares Existing Percentage of Non-Food
(liters per hectare) (needed for E10 blend)d Hectares Planted & Cash Crop Land
Cassava 1,632a 56,985 68,500e 2.7%
Sugarcane 4,962b 18,742 149,700f 20%
Molasses 709b 131,171 149,700f 141%
Sorghum* 1,400c 66,429 n/a 1.1%
The feedstock crops with the most land available for biodiesel are jatropha, castor, sunflower and
croton. Both cottonseed and rapeseed is more limited, although could contribute a share of the
feedstock required. Coconut is even more limited, but again could provide a portion of production,
especially on a local level.
TABLE 10: LAND REQUIRED FOR 2% BIODIESEL (B2) PRODUCTION BY 2013324

Biodiesel Yield Hectares Existing Percentage of Non-Food
(liters per hectare) (needed for B2 blend) Hectares Planted & Cash Crop Land
Castor 448a 71,429 13,000h 1.0%
Coconut 597b 53,601 37,100h 161%
Cottonseed 87c 367,816 36,300h 26%
Croton* 840d 38,095 n/a 5.8%
Jatropha* 840e 38,095 n/a 0.6%
Rapeseed** 784f 40,816 n/a 26%
Sunflower 381g 83,990 13,000h 2.4%
4.7 FOREIGN CURRENCY SAVINGS & DOMESTIC REINVESTMENT
Kenya spent $983 million, or 5.6% of gross domestic product, importing petrol and automotive
diesel in 2006.325 The country also ran a current account deficit of $874 million in 2006.326 With
domestic consumption and the price of oil both continuing to rise, the amount spent on imported
oil is nearly certain to increase in the years to come. Domestically produced biofuels could reduce
the need for a portion of petroleum imports, thus leading to significant foreign currency savings.
Hard currency that is currently enriching international trading partners could instead be reinvested in
the Kenyan economy, creating jobs and new opportunities, especially for poor rural areas. If Kenya
offset 10% of petrol imports and 2% of diesel imports with locally produced biofuels by 2013, it
would keep a total of $71 million per year from flowing overseas (at current consumption levels,
assuming an average price of $90 per barrel of oil).
4.8 CARBON FINANCE POTENTIAL
The potential reduction in greenhouse gas emissions from biofuels may provide an additional
revenue stream for some projects (see Section 6.2 below on biofuels and greenhouse gasses). There
are two distinctive markets for carbon credits: the mandatory market created through the Kyoto
Protocol of the United Nations Convention on Climate Change (UNFCCC), and market for
voluntary credits. The former is more stringent and restrictive, but generally yields a higher price per
tonne of carbon. Conversely, the latter is more flexible and easier to gain compliance with, but
fetches a lower price, (though the price has increased steadily due to the value placed on the
livelihood and sustainability aspects of specific projects within the voluntary carbon markets).
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4.8.1 Clean Development Mechanism (CDM) Market
With the exception of one project, biofuels have yet to benefit from the existing carbon funding
mechanisms through the Clean Development Mechanism (CDM) of the Kyoto Protocol. The CDM
enables countries to meet their emissions reduction obligations in part by funding projects that
reduce emissions in other parts of the world, particularly developing countries that are not
themselves bound to reduce emissions under the Climate Convention. In order for a project to
qualify for emission reduction credits under the CDM, several requirements must be met.
First, the methods for counting the precise amount of emissions that have been reduced, as well as
verification for what is claimed, must meet the very strict guidelines of an approved methodology.
Six methodologies have been proposed to date, but only one – which applies to projects that
produce biodiesel from waste vegetable oil – has been approved.327 The remaining five
methodologies either have been rejected or are in the process of being resubmitted to the CDM
Executive Board.
A second requirement is the need to demonstrate that the project will result in emissions reductions
that would not have occurred in the absence of CDM carbon financing. This is called additionality.
The project must also meet the requirements of the host country for sustainable development.
Participating governments are required to build up human and institutional capacities in order to
implement CDM projects. This can be a significant barrier in Africa and other parts of the
developing world. Not surprisingly, as of this publication, only 2.8% of all current CDM projects
were registered in Africa.328
Another limitation on the viability of biofuels carbon projects, and part of the reason for so few
approved methodologies, is the challenge involved in accounting for GHG reductions, especially
regarding those that come from land-use change. As discussed in Section 6.2 below, certain biofuels
produced today may actually be net GHG emitters if all direct and indirect land-use changes are
accounted for. This is because of GHG emissions that are released when forests and grasslands are
cleared for biofuels crops or for other agricultural crops that are displaced by biofuels production.
Emissions that occur as a result of the project outside of the project baseline are referred to as
leakage.
Despite all of these obstacles, it may be possible to obtain certification for a CDM biofuels project.
Several initiatives that have been launched to promote the CDM in Africa may provide support to
biofuels carbon financing. These include:
! The Nairobi Framework – Initiated by the United Nations Development Programme

(UNDP), United Nations Environment Programme (UNEP), World Bank Group, African
Development Bank, and the Secretariat of the UNFCCC with the goal of helping developing
countries, especially those in sub-Sahara Africa, to improve their level of participation in the
CDM.
! Capacity Development for the CDM (CD4CDM) Activities – A multi-year program with
local partners, mostly undertaken in Cote d’Ivoire, Mozambique, Uganda, Ghana, Egypt,
Morocco, Tanzania, Mauritius and Algeria. The donor is the Netherlands Ministry of
Foreign Affairs, which has provided $15 million for the project.
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! Carbon Finance for Sustainable Energy in Africa – This is a program mostly implemented in
Mali, Cameroon, Ghana, Mozambique and Zambia. Accomplishments will include the set-
up of national institutions for regulation and promotion of CDM projects and the
development of national action plans. The main donor is the UN Foundation and the
World Bank, which has given $1 million.
! UNEP Project: Forestry/Bioenergy CDM in Africa – A three-year program mostly
undertaken in French speaking Africa (Benin, Cameroon, Democratic Republic of Congo,
Gabon, Madagascar, Mali and Senegal). The main objectives are to meet short and long-
term capacity needs and to pilot existing and future CDM projects in the forestry/bioenergy
sectors.
4.8.2 Voluntary Carbon Market
As mentioned above, the voluntary carbon market (VCM) offers a potentially less rigorous
alternative for carbon financing than the CDM market. Generally speaking, the methodologies used
in the VCM are very similar to those used for compliance with the CDM. However, the transaction
costs for obtaining credit are usually lower in the VCM due to a shorter certification process. Also,
the additionality requirements are generally more lenient in the VCM, since buyers are more
interested in the sustainable development aspects of the project more than whether the project
would have occurred in the absence of the carbon financing (the basic test for additionality).
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5. REGULATORY & FISCAL ANALYSIS
Before you begin building a house, it is wise to survey the landscape. Similarly, before we create an
appropriate biofuels policy framework in Kenya, we must assess the existing fiscal and regulatory
regime. The survey contained in the following section includes a comprehensive review of current
laws, policies, regulatory requirements and taxes as they apply throughout the biofuels production
life cycle. The scope of the research includes relevant laws and regulations under the authority of
the Ministries of Agriculture, Energy (specifically the Renewable Energy Department), Environment
and Natural Resources, and Finance and Revenue, among others.329
As a preliminary matter, it is important to distinguish between law and policy. Generally speaking,
the former is mandatory while the latter is merely advisory. Both can change over time, but laws
tend to be more permanent as they are harder to modify or amend than policy. Another distinction
is that laws usually bind both the government and the public at large, whereas policies usually only
apply to governmental agencies or institutions.
The information gained from this research should act as a guide to project developers, investors, and
government officials as to what regulatory requirements, obstacles or benefits currently exist for
biofuels in Kenya. Section 7 provides a detailed list of recommended regulatory and fiscal reforms
that would promote biofuels while protecting consumers, workers, communities and the
environment. Investors and project developers should not rely on the information contained herein
without an independent assessment by a qualified expert assessing the legal and regulatory
implications of their specific projects.
5.1 ENERGY REGULATION
The Energy Act of 2006 mandates that the government pursues and facilitates the production of
biofuels, but does not articulate how this shall be accomplished.330 Liquid biofuels are only accorded
a passing mention in the Act, although it does at least distinguish between bioethanol and
biodiesel.331 The Ministry of Energy drafted a policy paper on biofuels in 2004 and, through its
National Biofuels Committee recently produced a biodiesel strategy (see Section 3.2 for more
information on the Committee). The policy and strategy together provide an important starting
point for the construction of a comprehensive regulatory framework. As the strategy acknowledges,
more analysis is required to determine a precise policy on blending targets, tax incentives, overall
economics, production capacities, and the use of multiple feedstocks in addition to jatropha. No
similar efforts have begun regarding the ethanol industry, although the Ministry of Energy intends to
do so upon completion of the biodiesel framework.
Biofuels activities clearly fall under the provisions of the Energy Act and may be regulated
accordingly.332 The newly formed Energy Regulatory Commission (ERC) has been given the explicit
authority to regulate biofuels production and distribution, in addition to more traditional forms of
energy such as electricity and petroleum products.333 The NBC has called for the adoption of new
regulations and, where appropriate, the application of existing regulations regarding: environmental
impact assessments, child labor, penalties for non-compliance within the Energy Act, handling and
safety standards, and the creation of material safety data sheets.334
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For electricity and petroleum, the Energy Act explicitly requires a license for the generation,
importation, exportation, refining, transmission, distribution, sale, storage or transportation.335
Significantly, no such requirement for a license or permit is included in the section governing
biofuels.336 This omission seems prudent given the nascent stage of the biofuels industry in Kenya
and the need to adopt rules that support, rather than suppress, the development of the new industry.
However, a licensing requirement is probably wise once commercial production and sales begin. A
license was required for the possession of power alcohol (ethanol) under the recently repealed
Industrial Alcohol (Possession) Act.337 The authority to introduce licensing requirements now rests
in the hands of the ERC if and when it deems the need to do so.
5.2 CONSUMER PROTECTION
The underlying purpose of fuel quality and blending standards is to protect consumers from harmful
products. The Energy Act generally supports the production, sale and use of biofuels.338 However,
current gaps and vagaries in the law make it unclear whether it is permissible to produce, sell or use
biofuels in the absence of clear standards from the Kenya Bureau of Standards (KEBS). Section 115
of the Act states that:
No person shall use or employ for or in connection with any of the purposes of
producing, generating, transforming, transmitting, distributing, supplying, or
importing, exporting, transporting, refining, storing, selling or using, any form of energy,
any mode, material or apparatus other than that which complies with the
specification or standard of the Kenya Bureau of Standards or where no such
standard exists, any international standard approved by the Kenya Bureau of
Standards.339
What seems clear is that none of the above-listed activities are permitted with regard to biofuels if
they are conducted in a way that contravenes any specification or standard adopted by KEBS. What
is less clear is whether such activities can occur legally if no such specification or standard has been
established. It is arguable that in the absence of an established standard, the activities may continue.
However, a plain reading of the law, as well as a consideration of the very purpose of a government
agency like KEBS, seems to indicate that KEBS should adopt relevant standards before commercial
biofuels activities begin on a large scale, and certainly before they are sold for use by the general
public.
KEBS has already adopted standards for a 10% ethanol blend with petrol, which means that
commercial fuel ethanol production is lawful as long as the fuel meets the standard, regardless of
how Section 115 is interpreted (see Appendix C for Kenya and international ethanol fuel quality and
blending standards).340 No similar standard exists for biodiesel in Kenya, although KEBS claims to
be developing one and several international standards could rather easily be approved.
Once biofuels are lawfully produced, a petroleum license is required for blending them with
petroleum products, and such blending is also subject to approved KEBS standards.341 The ethanol
blending standard cited above would permit the blending of 10% ethanol with 90% petrol, however,
a similar blending standard would be required before biodiesel could lawfully be mixed with petrol
diesel. It would be wise to review all existing Kenyan and international biofuel quality and blending
standards and adopt appropriate ones for each category of fuel before large-scale production occurs.
17 May 2008 74
Fortunately, the Energy Act creates the framework for doing so without needing to enact new
legislation.
As noted above, the Energy Act delegates broad authority to KEBS to determine fuel quality and
blending standards for biofuels. According to the Environmental Management Coordination Act
(EMCA), which is discussed more fully below, KEBS is required to conduct an environmental
impact assessment (EIA) analyzing the environmental impact of any biofuels standards it
proposes.342 The EMCA also requires that KEBS provide public notice and opportunities for public
comment before it finalizes its decisions.343
5.3 HEALTH, OCCUPATIONAL SAFETY & WORKER PROTECTION
Health, safety and worker protections are also important considerations for any producer or seller of
biofuels, and any associated laws or regulations must be complied with. Existing regulations under
the Energy and Petroleum Acts presumably would govern the distribution and sale of blended
biofuels. Health and safety regulations exist for vehicles and drivers used to transport petroleum
products as well as facilities and equipment used to manufacture and process petroleum products.344
Licenses and certificates are required for drivers, vehicles and facilities that verify the standards are
being adhered to.
A manufacturer’s license is also required by the Factories Act, which is intended to provide a
protective layer for workers and surrounding communities.345 Perhaps more importantly from the
perspective of occupational safety, rules setting specific exposure thresholds for a variety of
chemicals, including some that are used throughout biofuels production processes, have been
adopted.346 The Factories Act should be consulted prior to commencement of production activities
to ensure all other requirements, such as health and safety regulations are met.
The Employment Act stipulates that an employer must inform his/her employees of their rights by
conspicuously displaying a statement in the prescribed form of the employee’s rights under the law,
which is accessible to all the employees.347 Every employee in Kenya has the right to participate in
forming a trade union and no employer has any lawful right to discriminate against an employee or
potential employee for doing so.348 Employers are required by law to submit trade union dues
(membership subscriptions) to the respective trade unions that their employees subscribe to within a
prescribed time period and with notice. These dues are to be deducted from the respective
employee’s salary.349
Employers must maintain an insurance policy or surety covering any liability the employer may incur
regarding his employees.350 Employers must also register with the Director of Occupational Safety
and Health Services and provide details of their business activities.351 An employee who is involved
in an accident while at work that is not caused by the employee’s willful or deliberate conduct that
results in a permanent disability must be compensated by the employer.352
5.4 ENVIRONMENTAL PROTECTIONS
Many aspects of biofuels production have direct and indirect environmental implications (see
Section 6 for a complete discussion of the environmental impacts of biofuels). As a result, various
regulations are in place to protect land, water, air, genetic biodiversity and other resources. In terms
17 May 2008 75
of setting new policy, the National Environmental Management Authority (NEMA) is mandated to
create incentives for the promotion of renewable sources of energy.353 This is to be effected through
a Committee of NEMA known as the National Environmental Action Plan Committee (NEAP),354
which has been empowered under the EMCA to recommend appropriate legal and fiscal incentives that
may be used to encourage the business community to incorporate environmental requirements into
their planning and operational process.355 This section analyzes environmental laws and regulations
that are germane to biofuels production.
5.4.1 Environmental Impact Assessments
While the small-scale planting of biofuels crops may not require any environmental permits, large-
scale biofuels plantations will require environmental impact assessments (EIAs) and licenses
(EIALs). Risk assessments and performance trials may also be required for new crops under the
Seeds and Plant Varieties Act.356 The following activities along the biofuels value chain would
require consideration in an EIA:357
! any activity or structure out of character with its surrounding;

! major changes in land use;
! all roads in scenic, wooded or mountainous areas and wetlands;
! railway lines;
! oil and gas pipelines;
! water transport;
! river diversions and water transfer between catchments;
! drilling for the purpose of utilizing ground water resources;
! timber harvesting;
! clearance of forest areas;
! reforestation and afforestation;
! large-scale agriculture;
! use of pesticides, including aerial spraying;
! introduction of new crops;
! use of fertilizers;
! irrigation;
! fertilizer manufacture or processing;
! oil refineries and petro-chemical works;
! chemical works and process plants;
! bulk grain processing plants;
! management of hydrocarbons including the storage of natural gas and combustible or
explosive fuels;
! waste disposal, including: sites for solid waste disposal; sites for hazardous waste disposal;
sewage disposal works; works involving major atmospheric emissions; works emitting
offensive odors.
EIAs must be performed by a NEMA-approved expert for any biofuels project, program or policy
that may have an impact on the environment.358 An environmental impact assessment license
(EIAL) from NEMA must be obtained before the project can be started.359 A fee of 0.1% of the
total project cost is required to obtain an EIAL.360 NEMA must respond within three months and if
no response is given, then the project is tacitly approved.361 Before a project is considered, NEMA
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must provide public notice and an opportunity for comments on the project.362 EIAs must conform
to the EIA Regulations,363 as well as the provisions of the EMCA itself.364 NEMA has broad
discretion as to whether to approve a project and, once approved, may reconsider or revoke
approval at any time thereafter.365 An updated EIA may be required under some specifically defined
circumstances.366 EIA licenses, which are issued upon approval of an EIA by NEMA, can be
transferred along with the transfer of a business; however, both the transferor and transferee must
jointly notify NEMA in writing within 30 days of the transfer.367
5.4.2 Water Pollution
Written approval from the Director General, Ministry of the Environment is required before
erecting or constructing any structure in a waterbed or beside it for purposes of irrigation.368
Approval is also required before introducing or planting a substance, biological or human made, in
any natural water body that would or is likely to have adverse environmental effects, or before
changing or blocking a river’s natural course.369 Cultivation or any agrarian activity is prohibited six
meters from any riverbed.370
As authorized by the EMCA, the Ministry of Environment and Natural Resources has established
water quality standards for myriad chemicals.371 The Regulations require that all sources of water
comply with the scheduled standards.372 Effluent Discharge Licenses are required of all point
sources.373 Licensees are required to carry out regular effluent discharge quality and quantity
monitoring and submit quarterly reports to NEMA.374 NEMA in consultation with the relevant lead
agencies monitors compliance with the relevant standards.375
5.4.3 Hazardous Chemicals
Importing or purchasing inputs such as fertilizers, pesticides and herbicides may require special
licenses under either the Pharmacy and Poisons Act or the Use of Poisonous Substances Act.376
Farmers and other agricultural experts should have experience with these regulatory requirements.
Other chemicals necessary for the production of biofuels, such as methanol, sodium hydroxide and
magnesium silicate, may also fall under these regulations.
NEMA prescribes standards to regulate the importation, exportation, manufacture, storage,

distribution, sale, use, packaging, transportation disposal and advertisement of toxic substances.377
NEMA is also mandated to provide procedures for the registration of toxic substances378 and to
prescribe measures for the establishment of enforcement procedures and regulations for the storage,
packaging and transportation of toxic substances.379
5.4.4 Waste & Byproduct Disposal
Biofuels production creates certain waste streams that must be dealt with before they are put back
into the environment. Some, such as seedcake, are extremely valuable byproducts that can readily be
sold as fertilizer, animal feed, or biomass for biogas generation. Others, like glycerol, must be
treated before they are reused or disposed of in the environment.
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The EMCA provides that every person whose activities generate wastes must employ measures
essential to minimize wastes through treatment, reclamation and recycling.380 Selling the waste
seedcake produced after biofuels production and the agricultural residue produced after harvesting
crops can be viewed as reclamation of wastes. If the seedcake that is leftover after oil extraction is
to be used as a fertilizer or animal feed, then such seedcake would fall under the provisions of the
Fertilizers and Animal Foodstuffs Act, and must conform to the relevant standards for such
products.381 A license is required to distribute or manufacture animal feed or fertilizer.382 NEMA
has enacted regulations prescribing standards for waste handling, storage, transportation, segregation
and disposal.383 A valid license from NEMA is required to transport certain wastes.384
5.5 PURCHASE, DOMESTIC MOVEMENT & IMPORTATION OF SEEDS & OTHER

GENETIC MATERIAL
Growing an adequate supply of biofuel feedstock is an essential component of the production

process. This may require the purchase, domestic movement and/or importation of seeds, which
are activities regulated by the Seeds and Plant Varieties Act385 and the Plant Protection Act.386 Their
overriding purposes are the protection of the domestic seed market in Kenya and the limitation on
the introduction of potentially dangerous organisms. The statutes apply stringent plant and seed
introduction and certification procedures which are intended to prevent the importation and
domestic transfer of diseased seeds, noxious weeds and injurious pests. All phytosanitary measures
are based on or have equivalent international standards.387 The Kenya Plant Health Inspectorate
Service (KEPHIS)388 is charged with testing, certification, quarantine, and grading, as well as the
implementation of the national policy on the introduction and use of genetically modified seeds and
plants.389
Any commercial seed dealer or merchant must be licensed under the Trade Licensing Act.390 This
License is issued by the respective District Trade Development Officers under the Ministry of Trade
and Industry, who are located in most, if not every, district in Kenya.391 Prior to importation of any
type of seed, the seed merchant must also be registered with KEPHIS and given an Importation
Certificate.392 The following documents are required for the import of most types of seed into
Kenya:393
! Suppliers Invoice - describing the seed as well as their quantity.

! Packing List - detailing the contents of the consignment containing the seed.
! A Bill of Lading/Airway Bill - a contract of carriage of goods between a shipper and a carrier
of goods.
! Import Declaration Form (IDF Form C-61) - this form is issued by the Kenya Revenue
Authority’s (KRA’s) Customs Services Offices and is required for all imports. One needs to
pay a processing fee of Ksh 5,000 minimum or 2.75 percent of the Cost Insurance and
Freight (CIF) value, whichever is greater.
! Declaration of Customs Value (Form C-52) - This form is used to declare the true and
accurate value of the seeds being imported.
! Phytosanitary Certificate - These are obtained from the applicable agency in the exporting
country and processed by KEPHIS. Where the import is categorized as a Schedule I (one)
seed then it must be up to standards of the Organization for Economic Cooperation and
Development (OECD) system, which ensure compliance with phytosanitary standards such
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as, treatment of seed by any specified means for the control of plant disease and regulating
the importation, quality, testing and sale of any material used in such treatment.394
! International Orange Certificate - All imported seed shall be accompanied by an
International Orange Certificate of the International Seed Testing Association (ISTA), and
shall meet Kenyan quarantine standards requirements as set out in the Plant Protection Act,
Chapter 324 of the Laws of Kenya.395
! Plant Import Permit - This is obtained prior to its shipment from the importing country and
it specifies the requirements of plant health, indicating prohibitions, restricted quarantine
importations and additional declarations with regard to pre-shipment treatments. This
permit must be sent to the plant health authorities in the country of origin for adherence
with Kenya’s import permit requirements.
All potential biofuels feedstocks considered in this Study are subject to a 2.75% CIF tax and an
excise duty of between 10-35%.396 The excise on castor and sunflower seeds is 10%; for cotton,
coconut, rapeseed, sorghum and sugarcane it is 15%; for cassava it is 35%; and the excise on croton
and jatropha has yet to be set by the Ministry of Finance.397 A 16% VAT applies to the sale of all
seeds except croton and jatropha.398
5.6 ACQUIRING & USING LAND
Land is a form of property.399 The most crucial issues to consider when dealing with land are the
questions of ownership, control and rights of access and use. Land in Kenya is regulated by several
Acts of Parliament400 and most of these Acts define land in their own way.401 These definitions are
extremely crucial in transactions involving land and will be applicable to any category of land to
which the parent Act refers.
A biofuels producer can obtain the necessary ethanol or biodiesel feedstock in any of the following
four ways:
! Freehold ownership whereby they manage a plantation on land that they or their company
owns outright.402
! Leasehold ownership whereby they manage a plantation on land that they or their company
leases.403
! A contract with a landowner or lessee that creates an ownership right to the crop or portion
of the crop, called a servitude.404
! Purchasing crops from a farmer or on the open market.
The requirements of a particular project’s business model will determine what level of control over
the land is needed. Generally speaking, the size of the initial investment in the land is proportional
to the level of control the investor will receive. There are various categories of property rights or
estates that are capable of ownership or control.
A prospective biofuels investor should be aware that Kenya has two distinctive and not always
consistent land title registration systems, each of which have particular procedural and substantive
requirements that their property lawyer must be fully conversant with. Here are the main
components of a land transaction in Kenya:
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! Due Diligence Search – A title search checking that the land is free from any encumbrances
or fetters such as a charge for a mortgage. This can be carried out by a title insurance
agency.
! Purchase Documentation – A sale agreement prepared by a duly registered Advocate of the
High Court of Kenya, which stipulates all the requirements of the purchase transaction such
as payment schedule and completion time for a conveyance transaction.
! Lease/Transfer Documentation – A transfer of title or possession and control of property
from the owner to the purchaser or lessor for the stated duration of time.
! Acquisition of Title Documents – Documents that prove ownership of the land and are
issued to the new owner once a lease/transfer of property has been registered in the lands
office and payment is complete.
! Land Rent Certificate – Since all land is actually owned by the state, then the “purchase” of
land from the state is on leasehold and an annual rent is payable to the state. A land rent
certificate is issued before land is transferred to a new owner, indicating no rent is pending.
! Land Rate Certificate – A valuation indicating the amount owed to the city
council/municipal council for the “maintenance” of the land.
! Stamp Duty – A tax amounting to four percent of the value of the property being leased or
sold.
! Commissioner of Lands’ Consent – Required because the land is technically owned by the
State.
! Land Controls Board’s Consent – Required where use of land is changing from residential to
agricultural use.
5.7 EQUIPMENT PURCHASE & IMPORTATION
This section analyzes issues related to the purchase and importation of agricultural and biofuels
processing equipment. Under Kenyan law, the purpose for which machinery will be used may affect
how it is taxed or otherwise regulated. For instance, agricultural machinery and certain processing
or production equipment may, in certain cases, be subject to tax exemptions. See Table 11 for
examples on regulatory and tax treatment for importing and/or purchasing certain pieces of
equipment.
TABLE 11: TAXES & REGULATIONS ON IMPORTING MACHINERY

Hydrams Plows Harvesters Liquid Pumps Root Harvesters Generators
Taxes 2.75% CIF 2.75% CIF 2.75% CIF 2.75% CIF 2.75% CIF 2.75% CIF
10% Excise - 0% Excise Excise - 0% Excise 10% Excise
Excise Manual 25% Non-Fuel 10%
Other 0%
Licenses . Trade License
. Import License
Import . Suppliers Invoice
. Packing list
. Bill of lading
. Import Declaration Form
. Declaration of customs value (Form C-52)
Certificates . Certificate of Conformity
. Meet KEBS standard specification
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Any equipment or goods must meet Kenyan standards before they are shipped. The Standards Act
prescribes that the supplier or exporter obtains a Certificate of Conformity issued by a Pre Export
Verification of Conformity (PVoC) office before shipment. There are three possible routes for
obtaining a Certificate of Conformity: product licensing, product registration, or consignment
inspection and testing for unlicensed/unregistered products. The method used is dependant on the
exporters’ shipments’ frequency to Kenya and level of compliance they are able to demonstrate
when applying for certification.
5.8 TRADE & INVESTMENT
The Trade Licensing Act prohibits anyone from conducting any business405 except under and in
accordance with the terms of a current license.406 Non-citizens of Kenya are prohibited from
conducting business in any place that is not a designated general business area;407 or in any specified
goods, unless their license specifically authorizes them to do so.408 Persons are also prohibited from
entering any business transaction unless the business with which the transaction is entered into is
carried on under a license.409
The Investment Promotion Act (IPA) promotes and facilitates investment by assisting investors in
obtaining the licenses necessary to invest and by providing other assistance.410 The IPA makes
provision for applications for investment certificates411 to the Kenya Investment Authority412 (KIA),
by any potential investors in Kenya. Investment certificates entitle investors to 71 different types of
licenses that are required under different Kenyan laws, as well as entry and employment permits
under the Immigration Act.413 Ultimately, the purpose of the IPA is threefold: to aid investors in
complying with bureaucratic requirements of establishing a business, to keep track of investments,
and to protect Kenya and the local investor market from potentially detrimental investments.
5.9 TAXES & FISCAL POLICY
As discussed in Section 4.2 above, biofuels may not always be economically competitive with
petroleum fuels, especially as the industry is first getting established. The cost of production and the
cost of petroleum will dictate the competitiveness of biofuels at any given time. Tax policy can play
a key role in either supporting or obstructing the development of a new biofuels industry. Of
particular importance is the issue of how fuel taxes will be imposed on biofuels. The following table
lists the current fuel taxes in Kenya for petrol (premium and regular) and automotive diesel (gas oil):
TABLE 12: FUEL TAXES ON PETROL & DIESEL IN KENYA (KSH/L)414

Type of Fuel E.D. V.A.T. R.M.L. P.D.L. I.D.F. Remission Totals
Regular Petrol 19.505 n/a 9.00 0.40 1.33 -0.45 29.785
Premium Petrol 19.895 n/a 9.00 0.40 1.23 -0.45 30.075
Automotive Diesel 10.305 n/a 9.00 0.40 1.13 -0.30 20.535
Key: E.D. – Excise Duty; V.A.T. – Value Added Tax; R.M.L. – Road Maintenance Levy; P.D.L. – Petroleum
Development Levy; I.D.F. - Import Declaration Fee (2.25% of cost, insurance and freight (CIF), assumed to be Ksh
59 for premium petrol, Ksh 55 for regular, and Ksh 50 for diesel); Remission – This is an amount of money that is
remitted to the client by the K.R.A., for refining petroleum in the government refineries, for every liter of petroleum
that is refined. This amount is deducted from the Excise duty payable to the government.
17 May 2008 81
Tax holidays that reduce or eliminate the fuel tax on biofuels have been used very effectively to spur
the growth in the industry in Europe and other parts of the world. Production tax credits –
essentially the inverse of a tax holiday – have been the tool of choice in the United States to counter
the stifling effect that fuel taxes can have on biofuels. These devices are often implemented for a set
period of time – usually about 3-5 years – to enable the scale of biofuels production to rise to the
point where it can compete with petroleum products on an even footing. Although this approach
may forego some short-term revenues for the government, the domestic investment and job
creation that such measures will spur should more than make up for the lost revenue in terms of
overall economic benefit to the country (see Section 4.4 for more on income and job creation
benefits of biofuels). Whereas there is no guarantee that revenues raised from fuel taxes will flow
back into the country in a way that produces permanent employment and raises incomes, spurring
industrial biofuels development with tax incentives will absolutely have that effect. Another factor
to consider is the fact that the corporate and personal tax revenue from those involved in the new
biofuels industry will offset at least a portion of the lost revenue from fuel taxes. A more in-depth
analysis of tax trade-offs should be conducted to assess quantitatively the actual trade-offs.
The EMCA provides that the Finance Minister may propose to the government to put in place tax or
fiscal incentives to induce or promote proper environmental management.415 These incentives may
include: a customs and excise waiver in respect of imported capital goods which prevent or
substantially reduce environmental degradation caused by an undertaking, tax rebates to industries or
other establishments that invest in plants, equipment and machinery for pollution control, recycling
of wastes, water harvesting and conservation, prevention of floods and for using other energy resources as
substitutes for hydrocarbons.416
Section 7 provides a detailed list of recommended regulatory and fiscal reforms to promote biofuels,
including which government agency should take the lead.
17 May 2008 82
6. ENVIRONMENTAL & SOCIAL IMPACTS
Biofuels can have both positive and negative environmental and social impacts depending on the
type of feedstocks used, the methods and scale of production, and other factors. According to the
assistant production manager at Mumias, “dealing with the environmental impacts of ethanol
production can be difficult and tedious, and the initial investment costs high.”417 Many
unanticipated and overlooked consequences of the recent global biofuels boom, such as higher food
prices and high greenhouse gas emissions, are increasingly changing the debate amongst
policymakers and the general public. Many of the existing models of biofuels production are
proving to be quite unsustainable for many of the reasons discussed below. The following section
describes some of these impacts from a life cycle perspective. The section concludes with a
discussion of sustainability standards, or criteria, for the production of environmentally benign
biofuels.
6.1 AIR & WATER POLLUTION
The environmental and health benefits of biofuels can be quite significant, depending on the type of
feedstock and the mode of production. As anyone who has walked along the streets of Nairobi and
many other large cities can attest, air pollution from automotive exhaust is noxious and ubiquitous.
Fossil fuel emissions are not only a nuisance, but are downright dangerous. Studies have shown that
diesel pollution contributes to premature death, lung cancer, decreased lung function, chronic
bronchitis, increased respiratory and cardiovascular hospitalizations, and aggravated asthma.418
Air emissions from ethanol are lower than those from petrol in all six types of air pollution listed
(see Figure 8). For biodiesel, all major air pollutants are also lower than for petroleum diesel, except
for nitrogen oxide (NOx) emissions, which are slightly higher (see Figure 9).419 Reductions in
polycyclic aromatic hydrocarbons, which are probable human carcinogens, and particulate matter,
which triggers respiratory illness such as asthma, could yield large public health benefits. The
potential increase in NOx emissions, which contribute to the formation of ground-level ozone
(smog), is small relative to the greater reductions in all other significant air pollutants. The use of
fuel additives may also neutralize increased NOx emissions.420
Another benefit is the reduction in air pollution that comes from the co-generation of power and
steam at biofuels plants. Ethanol plants running on sugarcane and sweet sorghum can use the
bagasse waste from the sugar extraction to generate enough electricity to power their operations,
plus a surplus to sell back into the electrical grid. For example, Mumias is investing in a
cogeneration plant that is expected to generate 35MW of electricity into the Kenyan power grid, in
addition to the 11-14MW that it currently produces to offset all of its electricity use at the sugar
plant.421 Spectre International’s ethanol plant in Kisumu also generates biogas from the biomass
residues of its operations, which it uses to offset part of its use of heavy fuel oil.422
Biodiesel is biodegradable and considered nontoxic by the United States Environmental Protection
Agency. Pure biodiesel (B100) degrades 85% to 88% in water within 28 days.423 Biodiesel’s
biodegradability also makes it much more benign on marine environments such as wetlands,
marshes, rivers and oceans.424
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Although biofuels may produce much lower emissions from exhaust, emissions from other sources
along the life cycle must also be taken into account. Vehicles used for transport and agricultural
production, as well as the pollution generated from the manufacture of pesticides and fertilizers, can
outweigh some of the gains from reduced exhaust emissions. According to one study, biodiesel has
the potential to produce more particulates throughout the entire life cycle of production than
petroleum diesel, although the type of particulates may be less carcinogenic from biodiesel.425
FIGURE 8: 85% (E85) & 10% (E10) ETHANOL VS. PETROL426
FIGURE 9: 100% (B100) & 20% (B20) BIODIESEL COMPARED VS. PETRODIESEL427
Ethanol production utilizes large quantities of water and produces significant wastewater effluents.
In Brazil, between 1,000-2,000 liters of water are used to process a tonne of sugarcane into sugar
and ethanol.428 According to Agro-Chemical, the spent wash from ethanol production has a
malodorous smell and dark brown color that regularly attracts complaints from the local community
when it is discharged into the nearby river. It is unclear what type of wastewater treatment they are
doing. Spectre International has invested in a state-of-the-art wastewater treatment facility that first
treats incoming water from Lake Victoria and then processes wastewater before it is released back
17 May 2008 84
into the environment.429 The water treatment facility also provides free potable water to the
surrounding community.
6.2 GREENHOUSE GAS (GHG) EMISSIONS
Greenhouse gasses (GHGs) are natural and human-made atmospheric chemicals that contribute to
global warming. One of the most common GHG’s, carbon dioxide (CO2), is largely caused by the
combustion of fossil fuels in power plants, automobiles and industrial facilities. Biofuels present an
opportunity to help mitigate climate change by reducing CO2 emissions from fossil fuels because the
carbon that is released into the atmosphere during the combustion of biofuels is equivalent to the
amount of carbon that is absorbed during plant growth minus the amount of fossil fuels used for
transport and production. These climate benefits can be commoditized and sold as carbon credits
through the CDM or the voluntary carbon market. The sale of carbon credits could increase the
viability of biodiesel projects that may not otherwise be economical and help to expand biodiesel
development into other African countries (see Section 4.7 on Carbon Finance).
Similar to the discussion above on other air emissions, the climate benefit of a particular biofuel is
dependent on the scale and mode of production, as well as the type of feedstock that is used.
Machines and vehicles burning fossil fuels that are used to grow and process biofuels, as well as
petrochemical-based fertilizers and pesticides, will increase the GHG footprint of the biofuel being
produced. Some feedstocks, such as maize and soya, are generally more energy intensive than
others, such as sugarcane and rapeseed, meaning that their GHG footprints are larger.430 Several
studies have shown GHG emission savings from biodiesel of up to 61% compared with
conventional diesel emissions.431 One study by the United States National Renewable Energy
Laboratory found soy based biodiesel reduced GHG emissions by 78.4% over its entire production
life cycle.432 Another study found that corn-based ethanol reduced GHGs by only 12-13%
compared with petrol.433
These potential GHG benefits may overlook the emissions resulting from land-use change that is
caused by the direct growing of biofuels crops, or the indirect conversion of forest and grasslands to
agricultural production resulting from the need to increase food production that has been displaced
by biofuels crops. A recent study calculating the impact of land-use change on the overall GHG
emissions footprint of some biofuels found that corn-based ethanol actually produces 93% more
GHGs than petrol.434 The study found that even switchgrass, an ethanol feedstock that has been
hailed for its potential GHG benefits, when grown on land that would otherwise would have grown
corn, would produce about 50% more GHGs than petrol.435 Because the GHG emissions that are
caused by converting forests or grasslands to agricultural production cause a one-time release of
carbon from the soil and the plant matter that is removed, the GHG’s that are reduced from the
annual growing of biofuels feedstocks will “pay back” the initial release over time. For corn, the pay
back period is calculated at 167 years; switchgrass grown on land previously used to grow corn
would take 53 years.436 Ethanol produced from Brazilian sugarcane is said to take 4 years to pay
back the initial emissions caused by land-use change if grown on tropical grazing land, but even this
relatively efficient source of ethanol would take over 50 years to pay back the initial GHG emissions
if grown on land converted from tropical rainforest.437
In Kenya, the few remaining rainforests are protected and off limits to development. Given the
limitations on arable land, the most logical strategy for biofuels would be to exploit semi-arid areas
17 May 2008 85
as much as possible, as well as parts of the sugarcane belt that are suitable for expanded cane and
sweet sorghum plantations. For biodiesel, the optimal balance would be to use feedstocks that can
either grow in semi-arid areas, such as castor and jatropha, or trees that can be part of a larger
agroforestry or reforestation program, such as croton. Edible oil crops, like rapeseed and sunflower,
could be used for biodiesel in cases where they are grown as a rotation with wheat and other food
staples. Such a combined strategy would significantly reduce GHG emissions from land use change
and make biofuels produced in Kenya extremely carbon friendly.
The release of GHGs from land-use change that is caused by growing biofuels feedstocks could
undermine purported climate benefits and significantly reduce their overall environmental benefits.
The use of waste materials, such as agricultural residues and used vegetable oil, thus are much more
attractive feedstocks than crops that are grown primarily for biofuels. The use of marginal lands
that would not otherwise be used for agricultural production to grow biofuels feedstocks is another
key to reducing GHG emissions from land use change. Afforestation and reforestation projects
involving tree species like croton and jatropha could also enable the biofuels produced to provide an
overall GHG emission reduction compared with the fossil fuels it replaces. As discussed in more
detail below, sustainability standards and legal restrictions should be adopted to promote the least
GHG intensive biofuels (see Section 6.6).
6.3 NET ENERGY BALANCE & ENERGY RETURN ON INVESTMENT
An issue closely related to GHG emissions is the amount of energy it takes to produce each unit of
biofuels, known as net energy balance or energy return on investment. A positive net energy
balance means that more energy is produced than consumed in the production process. If the
energy contained in a unit of biofuel is equal to the nonrenewable energy input required for
production, the fuel is said to have a neutral net energy balance and the energy return on investment
value is 1. Values greater than 1 mean the biofuel contains more energy than the fossil energy inputs
used to make it; conversely values less than 1 mean that more nonrenewable energy was consumed
during the production than is contained in the final product.
According to a study by the Minnesota Department of Agriculture, biodiesel and ethanol have
energy yields of 3.2 and 1.34, respectively, which means biodiesel has a net energy gain of 220% and
ethanol 34%.438 An analysis of six studies by the Natural Resources Defense Council found that
corn-based ethanol has an energy return on investment of between 1.29 and 1.65.439 A similar
survey of the net energy balance of biodiesel produced from different feedstocks found a range of
estimates, including one that shows a negative balance (see Table 13).440
TABLE 13: BIODIESEL NET ENERGY BALANCE (NEB)441

Feedstock and Co-Products NEB Study
Soybean 1.6 Hill (2006)
Soybean+ Soymeal+ Glycerine 1.93
Sunflower 0.46 Pimentel and Patzek (2005)
Sunflower + Oil meal 0.57
Soybean 0.76
Soybean + Soymeal 0.94
Oilseed rape 2.99 ADEME(2002)
Sunflower 3.16
Oilseed rape 1.98 Shell (2002)
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Oilseed rape + Oil meal 3.36

Oilseed rape + Oil meal + Glycerine 3.45
Oilseed rape + Oil meal + Glycerine + Straw 6.35
Oilseed rape 1.78 Levington (2000)
Oilseed rape + Oil meal + Straw 3.71
Soybean 3.22 USDA (1998)
6.4 SOIL EROSION, LAND CONSERVATION, INVASIVENESS & BIODIVERSITY
Biofuels crops may help to prevent soil erosion and reclaim marginal lands for agricultural use.
Some crops, such as rapeseed, are commonly used as a rotational crop to provide soil cover in
between other harvests, typically wheat. Other feedstocks, like jatropha and croton, can help to
reforest degraded areas that can replenish soils and local hydrology over time. Semi-arid crops, like
castor, sweet sorghum and jatropha can also aid in returning marginal lands to productive use, thus
increasing the overall efficient use of the land.
Of course, depending on the crops and the scale of production, many of these potential gains in
land use can just as easily be undone by, for example, the deforestation of tropical rainforests to
make way for industrial-scale palm oil plantations. Agricultural operations related to biofuels crops,
such as seedbed preparation (i.e. ploughing and harrowing) and tilling, may also lead to soil erosion.
Another fear about biofuels crops is that they could promote leaching of excess chemical nutrients,
containing nitrogen or phosphorus, from agricultural fields to natural ecosystems contributing to
eutrophication. This concern is no different from that of any agricultural crop, whereby the negative
environmental impacts of different farming techniques can be increased or decreased, depending on
the approaches chosen by the farmer and the community. All too often, short-term economic
benefits of increased yield outweigh the long-term interests of preserving soil and preventing
environmental degradation. Governmental and non-governmental agencies must work to educate
farmers to appreciate the long-term interests when they are making more short-term decisions on
which agricultural methods to employ.
Demand for biofuels can also cause massive destruction of tropical rainforest ecosystems as they are
cleared for biofuels plantations.442 Deforestation for agricultural purposes is one of the most severe
forms of land-use change. It is highly correlated with loss of biodiversity, as forested land, which is
shifted to cultivation, loses its ecological function as a habitat for native plant and animal species.
Examples include vast areas of natural forests and savannahs in Brazil and Asia that have been
cleared for soy and palm plantations.
The Indonesian government is considering turning vast areas of Borneo’s remote and biodiverse
rainforests into oil-palm plantations, which could destroy habitat for over 360 species of animals,
including orangutans.443 Large-scale monoculture plantations can also lead to an increase in pests
and diseases, which in turn require the application of greater amounts of toxic pesticides and energy-
intensive fertilizers. To avoid these problems in Kenya, it is imperative that the government study
the long-term impacts of land-use change for biofuels and plan accordingly. The central
government should play a strong role in this process in consultation with local governments, as local
governments acting alone may not always consider the broader impacts of their decisions on
ecosystems that include areas beyond their jurisdictions.
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Certain biofuels feedstocks, such as castor and jatropha, are considered invasive in some parts of the
world and naturalized in others.444 The Invasive Species Council of Australia recently released a
report recommending that castor and jatropha, as well as a number of other potential biofuels crops,
not be allowed in the country.445 Both castor and jatropha have grown in Kenya under cultivation
and in the wild for decades, if not longer. However, the introduction of large plantations of either
crop raises serious questions about potential impacts on native ecosystems and must be adequately
studied for its ability to spread before such plantations are undertaken. The Ministry of Energy is
working with KEPHIS to study the potential invasiveness of different biofuels crops and to take the
necessary steps to control any problems that might otherwise arise.
In the 1980s, Kenya allowed the introduction of a tree called Prosopis juliflora, as it was seen as having
high potential as a fast growing tree that could help to reforest parts of the country. The tree has
spread as intended and maintains certain benefits, such as fuel wood, but has since raised many
concerns regarding its affect on domestic animals and native vegetation. The government is now
trying to control the spread by introduction of a beetle that is thought to eat the tree’s seeds and
slow its spread. These efforts have done little to assuage the concerns of many Kenyans, who have
filed a lawsuit against the government claiming millions in damages.446 However, it is important to
note that all invasive species are not equally dangerous, and there is even debate over the costs and
benefits of prosopis. Many common non-native trees in Kenya, such as jacaranda, calliandra and
juniper, are considered highly invasive in some parts of the world.
6.5 COMPETITION WITH FOOD

6.5.1 Debate & Facts on Biofuels and Food
Should edible crops be used for biofuels? As energy and food prices climb to record levels, this
question is of the utmost importance, especially in countries like Kenya where approximately half of
the population lacks access to adequate food.447 While there are legitimate economic and ethical
arguments on both sides of the debate, it is very difficult, if not impossible, to devise a universally
applicable rule to guide decision makers in different parts of the world. The conflict between food
and biofuels is certainly real. It is beyond dispute that food prices of major staples that are also
being used as feedstocks for biofuels production have increased dramatically over the past several
years as biofuels production has boomed (see Figure 10). What is not entirely clear is the causal link
between the two.
On the one hand, the diversion of corn from food in the United States, which represents about 40%
of global production,448 and oilseeds in Europe and Southeast Asia could be a main driver for the rise
in global commodity prices. World grain production has not kept up with consumption for six of
the past seven years, and world grain stocks are at a 32-year low, down to about a 57-day supply.449
Reductions in cheap corn exports to Mexico from the United States due to the increased demand
for corn-based ethanol has led to increases in the price of tortillas, according news reports.450 The
debate has gotten so heated that a leading independent UN expert on the “right to food,” Jean
Zeigler, recently called the use of edible crops for biofuels “a crime against humanity” because of the
impact higher food prices are having on the world’s poor.451
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FIGURE 10: ETHANOL & BIODIESEL PRODUCTION & FEEDSTOCK COMMODITY PRICES452
The UN Food and Agriculture Organization, which called Zeigler’s remark “regrettable,” has raised
more scientifically-based concerns that the current biofuels boom may be threatening a hungrier
world over the long term.453 FAO’s “Agricultural Outlook: 2007-2017” concludes:
Currently strong world market prices for many agricultural commodities in

international trade are, in large measure, due to factors of a temporary nature,
such as drought related supply shortfalls, and low stocks. But, structural changes
such as increased feedstock demand for biofuel production, and the reduction of
surpluses due to past policy reforms, may keep prices above historic equilibrium
levels during the next 10 years. Higher commodity prices are a particular
concern for net food importing developing countries as well as the poor in urban
populations, and will evoke on-going debate on the “food versus fuel” issue.454
Part of the problem is the fact that biofuels feedstock production is much more expensive in the
United States and Europe than much of the developing world, yet large subsidies in the U.S. and
Europe continue to prime the agricultural production pump, which helps maintain artificially high
commodity prices.455
However, as the FAO report indicates, most short-term price increases in food are more the result
of increased demand for food from many of the world’s fastest expanding economies, like China
and India, as well as the high price of petroleum, which affects everything from transport to the
price of agricultural inputs like fertilizer and pesticides.456 The head of the U.S. Department of
Agriculture has put forth similar arguments.457 Indeed, the fact that U.S. corn exports actually
increased by about 26% from 2005 to 2006 makes it harder to direct blame at the U.S. ethanol
program, in and of itself, causing the reduction in corn stocks worldwide that has increased prices.458
The success of sugarcane-based ethanol in reducing the price of fuel in Brazil may actually be
helping to bring food prices lower.459 Even UNEP Executive Director Achim Steiner is skeptical
that higher food prices is simply the result of increased biofuels production:
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Global price fluctuations in the grain markets have always existed, although we
are for some, like wheat, at historic highs at the moment. It would be somewhat
premature to say that pasta costs more because there is biofuel grown in other
parts of the world.460
6.5.2 Biofuels & Food in Kenya
One very important consideration when selecting potential feedstocks for biofuels production is
whether current domestic production levels are sufficient to meet domestic demand for food and
animal feed. Before considering whether the country should start producing biofuels from certain
crops, it should evaluate whether doing so will put too much pressure on imports for food. It is
likely to take at least a few years before the volume of production from jatropha, croton and castor
are sufficient to begin large scale biodiesel production. However, some consumers are already eager
to begin using locally produced biodiesel, and others would become interested if they begin to get
accustomed to seeing it and hearing about it. The use of available feedstocks, such as coconut,
cottonseed, rapeseed and sunflower, could be used to prepare the market for larger scale production
that may take several years or longer to achieve.
Increasing imports of some foods due to increased biofuels production also may not be such a bad
thing, especially if the domestically produced crop can fetch more value as a biofuels feedstock than
a food crop and the local food market can meet demand at affordable prices. However, gender and
health issues must be taken into account. Traditionally, women are not in direct control of
household assets including income, regardless of which family members are doing the work. This
can often lead to negative impacts on the family, especially if they are no longer growing food that is
readily available for the family to consume. A recent brief from the International Food and Policy
Research Institute (IFPRI) synthesizing research findings on gender and food security made the
following findings:
! Targeting women in agricultural technology dissemination can have a greater impact

alleviating poverty than targeting men.
! Equalizing agricultural inputs between men and women results in significant gains in
agricultural productivity.
! Raising a woman’s status dramatically improves the health, longevity and productivity of her
children.461
Another reason for considering using an edible crop for biofuels is if the domestic cost of
production for that crop cannot compete in global or regional markets. Kenyan sugarcane is a good
example of this phenomenon, as the current ex-factory price of a tonne of sugar produced in Kenya
is about twice the price of imported sugar from other COMESA countries (see Section 3.1 for more
detailed information on the reasons for this).462 Restrictive tariffs on imported sugar – a new four-
year extension was recently approved by COMESA – have been the key tool used by the Kenyan
government to prevent the sugar industry from the catastrophic consequences of having to compete
in regional and global markets. However, such tactics are unsustainable, as the day is likely to come
when Kenya can no longer convince its trading partners to accept these measures. Another effect of
current sugar policy is that the average consumer is paying more in Kenya for food products
containing Kenyan sugar than they otherwise would if more cheap sugar was imported.
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As long as Kenyan sugar companies enjoy protective tariffs that enable them to charge about twice
the price for imported sugar – Ksh 53,540 per tonne compared with Ksh 28,874 per tonne for
imported sugar – then it makes more economic sense to continue producing sugar as the primary
product, with the molasses by-product used for ethanol. However, at COMESA prices, Kenyan
sugar companies could make more money foregoing sugar production in favor of full-scale ethanol.
At the current production level of about 71 tonnes of sugar per hectare, about 7.1 tonnes of sugar
and 710 liters of ethanol can be produced per hectare. At Kenyan prices of Ksh 53,540 per tonne of
sugar and the current wholesale price of about Ksh 50 per liter of ethanol, one hectare of processed
cane yields Ksh 415,634. By contrast, if the entire production went towards ethanol production,
then about 4,970 liters of ethanol could be produced per hectare of cane for a total of about Ksh
248,500. At high protectionist prices for sugar, sugar and ethanol makes more sense than ethanol
alone. However, if and when protective tariffs disappear, then ethanol alone could make more
economic sense as the amount of income per hectare for the co-production of sugar and ethanol
would drop to Ksh 240,505 compared with Ksh 248,500 for ethanol alone (see Table 14).
TABLE 14: COMPARISON OF INCOME FROM CO-PRODUCTION OF SUGAR & ETHANOL VS. INCOME
463
FROM ETHANOL ONLY AT CURRENT DOMESTIC & IMPORTED SUGAR PRICES
DOMESTIC SUGAR PRICES IMPORTED S UGAR PRICES
(KSH 53,540 PER TONNE) (KSH 28,874 PER TONNE)
PRODUCTS SUGAR + ETHANOL SUGAR + ETHANOL
ETHANOL ETHANOL
1 Ha Cane 71 tonnes 71 tonnes 71 tonnes 71 tonnes
Sugar Produced 7.1 tonnes 7.1 tonnes
Sugar Income 380,134 205,005
Ethanol (Cane Juice) 4,970 liters 4,970 liters
Cane Juice Ethanol Income 248,500 248,500
Ethanol (Molasses) 710 liters 710 liters
Molasses Ethanol Income 35,500 35,500
TOTAL INCOME (KSH) 415,634 248,500 240,505 248,500
The Managing Director of Muhoroni Sugar agreed that “we should be making ethanol instead of
sugar, if it’s more efficient.”464 It is important to note, however, that ethanol sold for Ksh 50 per
liter would not be competitive with petrol at current prices unless there was a roughly Ksh 10 per
liter reduction in fuel taxes. However, the markets for potable alcohol and methylated spirit would
support a pre-tax price of about Ksh 50.
Increased income from biofuels could also provide the economic incentives for farmers to invest in
more efficient agricultural production methods. Irrigation could vastly improve yields for both food
and biofuels crops, thus increasing farm incomes and food security. However, the initial capital
investment in an irrigation system is too high for most small farmers. Opportunities for growing
lucrative cash crops could change the equation, thus enabling significant breakthroughs in
agricultural production throughout Kenya. Of course, the most vulnerable smallholders, who are
struggling to survive on extremely modest plots, are probably not the best candidates for
experimenting with cash crops in lieu of their food crops. The income generated from such small
plantations would probably not suffice to buy enough food.
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6.6 INTERNATIONAL SUSTAINABILITY STANDARDS PROTECTING THE POOR

AND THE ENVIRONMENT
The environmental sustainability of biofuels is at the center of a global debate over whether they are
as green as first advertised. The thirst for feedstock is increasing pressure on agricultural lands,
which can have the dual effect of raising food prices and pushing agriculture into undeveloped areas,
such as tropical rainforests and grasslands. The release of carbon from this large-scale land-use
change can negate, or at least diminish, the climate benefits of burning biofuels instead of fossil
fuels. However, these and other impacts can be minimized through the use of strict standards that
guarantee the sustainability of the production process and maximize the positive environmental and
development benefits the fuels have to offer. This section provides an overview of the design and
implementation of sustainability standards that are specifically designed for biofuels.
Various standards have been developed by different organizations with similar features, although no
unifying global standard has yet been adopted. The German Ministry for Cooperation and
Development provides the following environmental, social, and economic criteria for ensuring that
biofuels projects in developing countries are conducted sustainably:465
Environmental Criteria:
! Conservation of natural ecosystems (e.g., avoiding the clearing of old-growth forests for
cultivation of energy crops);
! Preservation of at least 10% for biotope networks and protection corridors;
! Preservation of genetic diversity, including a minimum number of species, as well as
structural diversity within energy crop plantations;
! Ensuring sufficient recirculation of nutrients into cultivated soils and woodlands;
! Avoiding the negative impacts of pesticide and fertilizer use, as well as air pollutants;
! Avoiding water pollution and critical irrigation needs in semi-dry and dry regions;
! Avoiding soil erosion and degradation.
Social/Economic Criteria:
! Giving priority to food security;
! Avoiding negative health impacts from energy crop cultivation;
! Integrating, rather than displacing, landless people in energy cropping systems;
! Processing energy crops locally;
! Preservation and development of jobs in rural areas;
! Equitable distribution of economic benefits of biofuels;
! Local, informed participation in decision-making.
UNEP has identified a number of areas for measuring the sustainability of bioenergy projects:
energy services for the poor, agro-industrial development and job creation, health and gender, food
security; government revenues; trade, foreign exchange balances, and energy security; biodiversity
and natural resource management; and climate change.466
Laws promoting biofuels can also help to ensure sustainability. For example, the Energy Act passed
in the United States in December of 2007 actually mandates that biofuels that are used to meet the
renewable fuels standard reduce lifecycle GHG emissions by at least 20% compared with the
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petroleum based fuels they are replacing.467 Importantly, the definition for “lifecycle GHG
emissions” includes both direct and indirect emissions, such as those caused by land-use change:
The term ‘lifecycle greenhouse gas emissions’ means the aggregate quantity of
greenhouse gas emissions (including direct emissions and significant indirect
emissions such as significant emissions from land use changes), as determined by the
Administrator, related to the full fuel lifecycle, including all stages of fuel and
feedstock production and distribution, from feedstock generation or extraction
through the distribution and delivery and use of the finished fuel to the ultimate
consumer, where the mass values for all greenhouse gases are adjusted to account for
their relative global warming potential.468
The method of accounting indirect emissions from land-use change, especially if that change is
occurring in another part of the world, is extremely important to ensuring that all emissions are
captured and quantified.
The EU, which has set an ambitious goal of 5.75% biofuels by the end of 2010, is now considering
banning biofuels derived from crops grown on recently cleared forests, wetlands or grasslands.469
The European Commission is drafting legislation that would mandate a minimum of 35% savings in
GHG emissions over fossil fuels, although the details for measuring life cycle emissions will have to
be developed.470 The general idea behind the new rules is to verify that biofuels meet the new
standards by tracking all biofuels from origin to market. Individual countries, like Germany and
Switzerland are beginning to design their own standards to ensure the sustainability of the biofuels
that may qualify for subsidies and that will count towards their national consumption targets.471 The
Netherlands says that it will no longer subsidize the importation of palm oil, claiming that much of it
is being grown on Asian plantations created from drained peat lands.472
Brazil has also taken the following steps to reduce the negative environmental impacts of the
biofuels it produces:473
! Burning of crops before harvest has been prohibited in the state of Sao Paolo, which
accounts for the largest share of Brazil’s sugarcane production. This has resulted in
significant environmental benefits including the reduction in air emissions and reduced risks
of forest fires.
! Efforts have been made to expand sugarcane plantations towards degraded or poor sites and
‘dirty fields’ instead of forested areas.
! Improved land-use management intended to reduce the risk of competition for land between
food production and biomass resources.
Notwithstanding these efforts, the rapid expansion of palm oil and soy plantations has had many
adverse effects on tropical ecosystems throughout the world. From 1990 to 2002, global oil palm
plantations increased by 43% to 10.7 million hectares, while soy plantations have increased by 26%
to 77.1 million hectares during the same period.474 Most of this growth has occurred primarily in
Indonesia and Malaysia (for oil palm) and in Argentina, the United States and Brazil (for soy).
In Brazil, soy expansion is causing massive soil erosion and loss of biodiversity in the bush
savannah. In the last decade alone, millions of hectares of Argentine Chaco and Brazilian Cerrado
have been converted to soy plantations.475 In Malaysia and Indonesia, clear-cutting of tropical
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rainforests for palm oil plantations is one of the major threats to biodiversity. In Sumatra and
Borneo, the palm oil industry has set up 6.5 million hectares of palm oil plantations and it is
estimated to be responsible for the destruction of 10 million hectares of rainforest.476 These
plantations pose one of the greatest threats to the survival of many species, including orangutans,
which have lost at least half of their habitat between 1992 and 2003.477 A group known as the
Roundtable on Sustainable Palm Oil is trying to stem these losses and improve the image of palm
based biodiesel by establishing its own standards for ensuring sustainability.478 Although, like all
similar efforts described above, the success of the program will depend on making tough decisions
that could increase cost of production and prohibit the use of some areas currently being considered
for exploitation.
As discussed in detail above, the competition between biofuels and food is a key determinant of
whether biofuels are indeed sustainable. Several countries have adopted policies that reduce or
eliminate this conflict. For instance, the Indian Biodiesel Programme is promoting the rehabilitation
of degraded lands by use of jatropha, which it hopes will actually allow some of these lands to return
to food production in the future.479 Countries like Tanzania, with so much unused arable land (55
million hectares by one estimate) could become a lead player in producing sustainable biofuels
crops.480
While most of the efforts towards more sustainable biofuels discussed above are laudable and much
needed, many hurdles remain to their successful adoption and implementation. First, like other
similar standards, the devil is in the details. For example, a standard requiring a 40% reduction in
GHG emissions may sound promising, but the results depend on precisely how the measurements
are calculated, especially emissions from indirect land-use change. Verification, compliance and
enforcement are also keys to success. Without verifiable assurances that the standards are being
adhered with regard to specific batches of biofuels delivered and consumed, then the standard itself
is meaningless. Biofuels sustainability standards in Kenya and the rest of the world would do well to
copy many of the mechanisms that have been developed for other similar processes, such as the
Forest Stewardship Council’s system for certifying wood products and the Gold Standard for
verified GHG emissions reductions.
6.7 HIV/AIDS
HIV/AIDS is an epidemic that challenges all aspects of development. It depletes the agricultural
labor pool due to premature death and re-occurring periods of illness. This can incapacitate
agricultural production and rural livelihoods. HIV/AIDS affects agriculture both directly and
indirectly at the household level, changing supplies of labor, assets, patterns of farming, and other
activities.481 The relationship between biofuels and HIV/AIDS is no different than that of
agriculture in general. However, as biofuels feedstocks comprise the largest portion of production
costs, the availability and reliability of farm labor is a very significant issue. Some of the most
suitable geographic regions for biofuels production also happen to have some of the highest rates of
HIV/AIDS in Kenya (see Table 15).
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The impact of high rates of HIV in the TABLE 15: HIV PREVALENCE IN S ELECT AREAS, 2006482
community is exacerbated by the fact that Province District Prevalence Individuals
those affected are disproportionately Coast Taita Taveta 4.1% 5,757
between the ages of 15 and 49, the heart of Coast Kwale 3.4% 8,904
the labor force. The loss of such a Coast Kilifi 1.9% 6,050
significant block of the labor force leaves Coast Malindi 3.4% 5,816
Eastern Isiolo 4.9% 2,999
children and the elderly to tend to their
Eastern Mwingi 3.8% 5,459
farms, which limits their ability to expand
Eastern Kitui 3.9% 9,598
beyond the growth of basic subsistence Eastern Machakos 3.4% 14,512
crops. FAO predicts that AIDS could kill Rift Valley West Pokot 3.2% 5,134
up to 17% of Kenya’s agricultural labor Rift Valley Kajiado 2.8% 7,976
force over the next 10-20 years.483 Rift Valley Laikipia 5% 11,199
HIV/AIDS also has an indirect impact on Rift Valley Baringo 3.3% 7,876
labor by increasing the nutritional needs of Rift Valley Samburu 6.1% 4,492
those affected. Both direct and indirect Western Bungoma 5.1% 41,561
impacts will have massive repercussions for Western Busia 5.9% 8,428
the country’s agricultural sector, including its Western Butere/Mumias 5.7% 15,632
ability to increase production of biofuels Western Kakamega 5.7% 12,237
crops. Western Teso 5.3% 8,842
Nyanza Bondo 7.8% 6,203
The introduction of biofuels cash crops to Nyanza Gucha 2.8% 6,527
agricultural communities affected by Nyanza Homa Bay 21% 40,052
HIV/AIDS could have many positive Nyanza Kisii Central 3% 11,516
impacts. For example, increased income Nyanza Kisii North 2.9% 6,999
from the sale of biofuel feedstocks as cash Nyanza Kuria 3.1% 3,107
crop could reduce the need for woman to Nyanza Migori 8.2% 28,519
engage in unprotected sex in exchange for Nyanza Siaya 7.6% 11,948
Nyanza Suba 21% 22,863
food and money. Increased wealth could
also enable better access to education, testing and treatment. The intensity of the labor required to
grow various feedstocks is an important factor in determining which crops may be most compatible
with communities with high prevalence rates. Biofuels policies should be sensitive to this reality and
recommend crops that the local labor force is most capable of growing.
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7. ROADMAP & RECOMMENDATIONS
With the right combination of governmental support, private sector entrepreneurship and NGO
outreach, Kenya could become the biofuels powerhouse of East Africa and beyond. Within five
years, Kenya could be blending 10% ethanol (E10) and 2% biodiesel (B2), plus providing surplus
production for stationary power and exports. Biofuels could revitalize rural areas, like Nyanza and
Western Provinces, and provide an engine of growth throughout the country. Such a program could
also provide a model for the sustainable production of biofuels to counter the increasingly
unsustainable models being pursued by large industrialized countries.
The Ministry of Energy’s recently released biodiesel strategy makes a number of prudent
recommendations to promote and develop the biodiesel industry in Kenya. Several key aspects of
the following roadmap incorporate these recommendations from the Ministry, including the
production of certified seeds, the establishment and upgrading of blending facilities, myriad aspects
of research and development, and the creation of pilot biodiesel production plants. The authors of
this study appreciate the Ministry’s input and support.
7.1 ENVISIONING E10 & B2 BY 2013
Achieving targets of E10 and B2 by 2013 would require the production of about 93 million liters of
ethanol and 32 million liters of biodiesel. This would produce close to 1,000 new non-farm jobs at
production plants, blending facilities and for transport. Thousands of new farm jobs would also be
created throughout the country. At $90 per barrel of oil, Kenya would save about $71 million in
foreign currency from flowing out of the country if it produced 10% of its petrol and 2% of its
diesel from biofuels.
A combination of feedstocks would be required to achieve these targets. For ethanol, the logical
choices based on availability of land, yield and economics are sugarcane and sweet sorghum. Over
35 million liters of ethanol could be produced if 15,000 hectares of suitable new land (land that is
not currently being used to grow food or other cash crops) were cultivated with sugarcane and the
cane was used exclusively for ethanol. Another 22.9 million liters could be produced if half of the
cane currently being crushed at four of the worst performing sugar factories were diverted for
ethanol and power production over the next five years.484 As discussed in Section 6.5.2 above, the
latest protective COMESA exemption is scheduled to expire in 2012. If these factories cannot
compete with import tariffs in place, it is highly unlikely that they will be able to when they
disappear. A shift to ethanol and power production could aid these factories, or the ones that take
their place, to turn their balance sheets around.
About 24.7 million hectares of new land would be required for enough sweet sorghum to produce
the remaining 34.6 million liters of ethanol to achieve an E10 blend by 2013. These are very
ambitious targets because this is a new crop for Kenya. The Ministry of Agriculture, through its
research and extension services, will be crucial to the success of a large campaign to begin sweet
sorghum plantations. The two ethanol companies, who have already begun field trials, will also need
to play a key role in contracting and organizing farmers to produce for them. Extension services
provided by NGOs and research by ICRISAT will also be very important to success.
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Cassava is not included due to the currently prohibitive cost of feedstock. Both sugarcane- and
sweet sorghum-based ethanol will require support from the government in terms of tax incentives
unless the price of petrol rises significantly. A reduction in the fuel tax on every liter of ethanol
from Ksh 20 to Ksh 10 could provide the type of incentive to galvanize the private sector into
production (every liter of petrol is currently taxed about Ksh 30, but due to the fact that ethanol has
about two-thirds of the energy content of petrol, three liters of ethanol will be required to replace
every liter of petrol, so the equivalent tax on ethanol would be about Ksh 20, or two-thirds of that
on petrol). Such a tax reduction could be payed for by a slight Ksh 1.67 per liter increase in the fuel
tax on petrol. This would result in the same revenues for the government and the same overall
pump price for the consumer because each liter sold would contain 10% ethanol at the reduced tax
rate and 90% petrol at the slightly increased rate.
The combination of feedstocks to produce about 32 million liters of biodiesel is more difficult to
discern. We have selected a combination of edible and non-edible crops, as well as a mix of annual
crops and trees that take longer to mature, but reap many other ecological and long-term economic
benefits. Castor, which will begin producing at full yields (about 1 tonne per hectare) within nine
months of planting, could contribute enough oil for about 10 million liters. This would require
22,300 hectares of new castor plantations throughout the country. Fortunately, this is equivalent to
less than one-half of one percent of potentially suitable areas for castor that are outside of food and
cash crop growing areas.
It is envisioned that jatropha, which is likely to play a larger role in the long-term, will not have
matured to the point of full production by 2013. However, if we calculate a reduced production of
833 kilograms per hectare, which would be expected of trees that are about three to four years old,
instead of 2,500 kilograms at full maturity, then enough oil could be produced from 17.9 thousand
hectares for about 5 million liters of biodiesel. As these plantations mature fully, they should
produce roughly two to three times the oil.
Seeds from existing croton trees could be used to supply enough oil for two million liters.485 This
would require coordination and linkages with farmers who are already growing croton around their
farms, and others who are willing to collect croton seeds growing wild. However, at Ksh 15 per
kilogram, nearly Ksh 90 million would flow into rural communities for seeds that have heretofore
only had limited, if any, value. We also envision another five million liters being produced from
newly planted croton trees that have not yet fully matured; hence, the larger acreage requirements
for a smaller amount of biodiesel compared with that from existing trees. Similar to jatropha, when
these new croton trees are fully matured (in about 10 years), they will reap even greater quantities of
oil.
According to a recent study, the coconut subsector in Kenya is only being exploited by 25% of its
capacity.486 Considering current coconut production is about 61,000 tonnes, we estimate that
improving the exploitation rate to about 35% would produce enough copra to make about 4 million
liters of biodiesel. New coconut plantations on an additional 3,400 hectares, or about 10% of
suitable lands for coconut that are not currently under food or cash crop production, would add an
additional 2 million liters per year.
An additional one million liters could be produced from a mix of cottonseed, rapeseed and
sunflower. Although these edible crops should be prioritized for food production, producing
enough oil for one million liters should have a negligible effect on overall edible oil supplies. For
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example, about 2,550 tonnes of rapeseed would be required to produce one million liters of
biodiesel. At two tonnes per hectare, about 1,275 hectares would be required, which would amount
to less than one percent of suitable unfarmed land. In fact, hundreds of thousands of hectares of
currently unfarmed land that would be suitable for these crops exist throughout the country. Thus,
if biofuels can bring a tiny portion of this land into production, it is likely to have an overall positive
impact on food supplies, especially as newly-planted croton and jatropha trees begin to mature and
yield increasingly more oil over the next 10 years.
TABLE 16: FEEDSTOCKS, LAND & INCOME FROM E10 & B2 PRODUCTION BY 2013
Ethanol (93 mly) Ethanol (m. liters) Total Land (‘000 ha) % Suitable New Land
Sugarcane (new) 35.5 15 16.5%
Sugarcane (existing) 22.9 9.8 n/a
Sweet Sorghum (new) 34.6 24.7 1%
Ethanol Totals 93 49.5 n/a
Biodiesel (32 mly) Biodiesel (m. liters) Total Land (‘000 ha) % Suitable New Land
Castor (new) 10 22.3 0.3%
Jatropha (new) 8 28.6 0.4%
Croton (existing) 2 2.4 n/a
Croton (new) 5 29.5 4.5%
Coconut (existing) 4 6.7 n/a
Coconut (new) 2 3.4 10%
Cotton/Rape/Sunflower 1 n/a n/a
Biodiesel Totals 32 50.2 n/a
7.2 EMPOWERING SMALLHOLDER BIOFUELS COOPERATIVES
In addition to scaling up production for transport biofuels blends, another area of opportunity is the
small-scale and dispersed production and consumption of biofuels for domestic and community
uses like cooking, lighting and rural electrification. Kerosene, charcoal and firewood are the current
fuels of choice for many rural people throughout Kenya. These fuels are expensive, unhealthy and
lead to massive deforestation on already denuded land. The introduction of oilseed crops on private
and communal land, along with the establishment of community biodiesel processing facilities,
would provide a viable, healthier and more sustainable alternative to the current fuel supply. The
development of community owned cooperatives to help establish plantations and to process and sell
the biodiesel and associated co-products could empower smallholders to become more energy
independent, improve their local environment and to provide much-needed income and jobs to their
communities.
7.3 DEVELOPING THE VALUE CHAIN
Various models of production will be needed to increase biofuels production in Kenya. Support
from different stakeholders will be required to develop the value chain. For example, vast amounts
of sweet sorghum, a crop that is barely grown in Kenya, will be required to significantly increase
ethanol production. Ethanol companies are ready to support outgrowers who begin growing
sorghum and farmers are interested in new crops as long as they are confident in the market for
them. Agronomic expertise and extension services are the missing links to making sweet sorghum a
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reality in Kenya. ICRISAT, which has been developing sweet sorghum varieties for over a decade,
and has a mandate to expand its sorghum work in Kenya, could be extremely helpful in making high
yielding seeds available and in training extension workers in the nuances of growing the crop
successfully. Education and outreach is key, but it must work its way down to the farm level.
The Ministry of Agriculture, along with the Ministry of Environment and Natural Resources and
others, should take the lead coordinating efforts to expand agricultural production of biofuels
feedstocks. KARI, KEFRI and KEPHIS could also play important roles in training farmers,
providing extension services, and testing, certifying and distributing seeds. As discussed above in
Section 3.2, myriad private businesses, NGOs and governmental institutions are beginning to plant
jatropha and the Ministry of Energy’s National Biodiesel Committee has proposed a strategy that
focuses almost entirely on jatropha. Comprehensive provenance and silvicultural trials must be
launched for jatropha and other new biofuels crops before large-scale production can begin.
KEFRI is one of the few that has begun these important tests. Others, such as ICRAF and DEG,
are planning similar trials. These and other similar efforts are key to achieving the level of
production from these feedstocks that some are already counting on.
As discussed at length above, improvements could be made in sugarcane yields with the
introduction of irrigation and fast growing varieties. The Kenya Sugar Board and the Sugarcane
Growers Association could dramatically improve the competitiveness of the Kenyan sugar industry,
as well as provide more feedstock for ethanol, with a program designed for improving yields.
Investments should also me made in improving the road infrastructure in Western Kenya to
accommodate the more efficient transport of feedstocks from farm to factory.
Another important component of expanded ethanol production would be to restructure the flow of
feedstocks. Ethanol is currently produced at plants that are separate from the sugar factories that
supply them with molasses. As pointed out in Section 4.4, this leads to unnecessary duplication of
administrative costs and, perhaps more importantly, prevents the ethanol producers from using
bagasse to reduce their considerable power costs. Ethanol from the limited supplies of molasses
should be produced at the same facility as the cane is crushed, as is being planned by Mumias, to
harness the synergies between the different products of sugarcane. The two existing ethanol plants
should focus more of their attention on the production and use of sweet sorghum (as they are
beginning to do) and make investments to utilize the bagasse from the sorghum stalk for power
generation.
Unlike ethanol, which has a relatively high capital cost, biodiesel can be produced at different scales,
from the farm to a large commercial plant. Biodiesel will also likely depend on a wider variety of
feedstocks than ethanol. Large commercial farms with the capacity to grow their own feedstock,
such as castor, rapeseed and sunflower, could integrate biodiesel production into their operations or
outsource the processing to a dedicated biodiesel producer. Farmers could also aggregate their
efforts into a cooperative business model. If production is high enough, farms may decide to
increase the blend or transition some machines and vehicles over to B100.
At larger commercial scales of production, biodiesel manufacturers will have to secure sufficient
feedstocks in much the same way that ethanol producers and other cash crop processors currently
do. Maintaining a central plantation that is either owned outright or contracted for a number of
years would provide an important hedge against the volatility of the market for oilseeds. This is
especially true for new feedstocks like croton and jatropha, where growing costs and yields are not
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well established. The cost of oilseeds from a central plantation will likely be lower than those
purchased from outgrowers, although the operational management much more demanding.
Another important issue in the biodiesel value chain is the location of the plant vis-à-vis the source
of the feedstock and the market for the products (including co-products like glycerin). Given the
state of the infrastructure in Kenya and the concomitant high cost of transport, it makes sense to
locate biodiesel plants as close to the feedstock as possible, especially because moving relatively
bulky seed is more expensive than transporting finished biodiesel. The availability of processing
technology that can be scaled up can also help to maintain a production capacity that closely
matches the quantities of feedstock available in the immediate vicinity. KIRDI, which is
experimenting with biodiesel processing equipment, should be supported in developing cost-
effective and efficient biodiesel reactors that can be distributed to different key processing hubs
throughout the country.
The market for stationary power instead of transport could alter the business model and the scale of
production. The use of higher blends of biodiesel, neat biodiesel (B100), or possibly even straight
vegetable oil (SVO), in generators is an attractive alternative to blending biodiesel into the national
petroleum distribution network. Individual companies with large diesel demands, like Safaricom and
Celltel, could contract farmers directly and produce biodiesel themselves, or hire an outside firm to
do the same. Testing the compatibility of diesel generators with different blends of biodiesel and
SVO is an important first step in the process and could be assisted by KIRDI. Safari companies
with large diesel fleets and the need to power remote lodges might also find this model attractive.
7.4 DESIGNING AN APPROPRIATE REGULATORY & FISCAL FRAMEWORK
A national strategy on biofuels must establish the policy framework that first lays out specified goals
for biofuels in Kenya, such as an E10 mandate by 2013. Once the goals are established, then the
regulatory and fiscal regime governing biofuels must be updated to ensure the goals are achieved.
The primary objective should be the establishment of a lead institution that has the power to
coordinate disparate government agencies and enable the government to speak with a unified voice
on biofuels.
The Energy Act provides a mandate to the Ministry of Energy to take the lead on defining a national
biofuels policy, which it has already begun to do through the formation of the NBC. The Energy
Act also empowers the newly formed ERC to regulate biofuels in addition to more traditional
sources of energy. The Ministries of Agriculture and Environment & Natural Resources are
essential to the sustainable production of biofuels feedstocks and must continue to be involved at
the highest levels of government. All other potentially affected government agencies,
representatives from the business community, NGOs and development partners should also be
consulted thoroughly. For example, farmers and biofuels project developers should have at least as
much of a voice as NGOs and petroleum interests currently do within the NBC. A similar
committee should be established to chart the course on ethanol.
Both committees should be provided explicit guidance from the Ministries of Energy, Agriculture
and Environment & Natural Resources on the expected outputs and the structure of the
recommendations that they are to produce. A national goal for ethanol and biodiesel, such as E10
and B2, should form the basis of the policy that is developed. Specific crops should be selected as
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primary feedstocks based on detailed and quantitative economic, agronomic, social and
environmental criteria and analysis. A comprehensive programmatic EIA, including full public
notice and opportunity to comment, must be conducted before the government formally adopts the
new policy.
The vast majority of those interviewed for this study, including the Kenya Sugar Board, Kenya
Sugarcane Growers Association and PIEA, agree that the logical lead agency should reside within
the Ministry of Energy. However, because biofuels implicate many sectors that fall under the
mandates of a number of government bodies outside of the Ministry of Energy, it makes sense to
establish a high-level task force of the various interested ministries, including Agriculture,
Environment & Natural Resources, Lands, Water and perhaps others. The most sensible place to
locate the National Biofuels Programme is where it currently resides within the within the
Renewable Energy Department, or alternatively, in a newly-created National Biofuels Authority
within the Ministry of Energy.
Regulatory and fiscal reforms should then be crafted to achieve the desired objectives and to ensure
consumers, workers, communities and the environment are not only protected, but benefit from the
new industry. There is widespread support for the use of governmental policies to promote
biofuels, even from the head of the Petroleum Institute of East Africa (PIEA), George Wachira,
who said that the government’s “responsibility to uplift the poor” could be realized through support
programs and/or subsidies for farmers growing biofuels crops.487
The following policies should be considered as part of this process:
Blending Mandate or Goals – A national goal of the amount of ethanol and biodiesel that should or
must be blended by a certain date or dates. Many stakeholders, especially those in the sugar and
ethanol industry, agree that a blending law is a prerequisite to a successful biofuels program. One
official expressed doubt that such an objective was politically possible given the lack of interest from
the “oil dealing monopoly.” One sugar executive explained that biofuels blending is comparable to
allowing independent power producers to sell electricity into the power grid. Just as it makes no
sense to restrict domestic electricity production from benefiting the nation at a time of energy
shortages, it also makes no sense to limit the blending of domestically grown fuels.
As described above, E10 and B2 could serve as reasonable preliminary goals. Importantly, PIEA
agrees with the idea of government-mandated standards for blending, but thinks they should be
limited to no more than 10%. Until there is enough supply of biofuels to meet a national blending
mandate, PIEA suggests that the standard be applied only to select industries or regions. For
example, it does not make sense to initiate an E10 mandate in Nairobi or Mombasa if there is only
enough ethanol being produced to supply 10% of Kisumu with ethanol. One way of achieving a
blending mandate is through a renewable fuel standard (RFS) that requires refiners and petroleum
distributors to meet blending mandates or, if they cannot do so, to purchase credits from those
distributors who have exceeded their own requirements. This system has been used in the United
States since 2005, but would require a good deal of government oversight and coordination, which
may not be feasible in Kenya. Germany has used a tax incentive to promote biodiesel production,
although is phasing that out in favor of a mandatory blending standard. Under the new
arrangement, petroleum distributors will be required to blend a certain percentage of biodiesel, or
pay a fine for each liter they fall short.
17 May 2008 101

Fuel Quality & Blending Standards – KEBS must establish or revise fuel quality and blending
standards for both ethanol and biodiesel based on the blending mandate and existing standards in
Kenya and internationally.
Priority Feedstock Crops – Based on economic, agronomic, social and environmental criteria and
analysis, optimal crops should be selected for biofuels. For ethanol, sugarcane and sweet sorghum
seem to make the most sense; and for biodiesel, castor, coconut, croton, jatropha, rapeseed and
sunflower should be considered. KEPHIS, KARI and/or KEFRI should be responsible for
identifying, testing and certifying high yielding seeds that are adapted to the different agro-ecological
zones in which they might be grown.
Licensing – Licensing requirements along the entire biofuels value chain should be reviewed and
revised where necessary to protect consumers, workers, communities and the environment. PIEA
has concerns about “rogue” biofuels producers who could sell biofuels of varying degrees of quality
and undercut the established fuel companies. As explained below, the requirements of production
and blending licenses that already exist in the law, should be sufficient to eliminate the threat of
unregulated sales of biofuels in much the same way unregulated petroleum are quashed. If possible,
the licensing requirements under the various laws and regulations discussed above should be
integrated, thus eliminating unnecessary and onerous regulation. The following should be
considered:
! Production License – Commercial producers should be licensed under the Energy Act by
the Energy Regulatory Commission to ensure compliance with KEBS fuel quality standards.
The license requirement under the Factories Act should be integrated to avoid unnecessary
duplication. Licenses should not be required for home and farm production and
consumption of biofuels given the fact that consumers do not face a risk of being harmed
from biofuels that are not being sold.
! Blending License – Petroleum distributors blending biofuels should be licensed under the
existing requirements of the Petroleum Act in accordance with the blending standards
adopted by KEBS.
! Transport & Handling Licenses – Various health and safety requirements for the transport
and handling of petroleum products exist under the Energy and Petroleum Acts. These
should be updated for the specific chemical characteristics of ethanol and biodiesel.
! Occupational Safety and Health Services Registration – Biofuels producers likely have to
register with the Director of Occupational Safety and Health Services to ensure worker
safety.
! Environmental Licenses – A license may be required under either the Pharmacy and Poisons
Act or the Use of Poisonous Substances Act, or both, for the import, sale and use of
hazardous chemicals, such as methanol or hydrochloric acid. Water and air quality standards
must be complied with and an EIAL must be obtained from NEMA prior to
commencement of production. NEMA should streamline the environmental licensing
requirements to ensure compliance with various water, air and waste disposal standards, as
well as the assessment of environmental impacts.
! Fertilizer & Foodstuffs License – A license may be required for the production of fertilizers
and animal feed from the byproducts of biofuels production.
17 May 2008 102

Fiscal Policies, Fees & Incentives – Tax incentives are an attractive alternative or complement to
regulatory mandates promoting biofuels. Opportunities to promote biofuels exist in the following
categories:
! Fuel Taxes – As discussed in Sections 4.2 and 5.9 fuel taxes can make or break the feasibility
of biofuels. Some combination of tax exemptions or subsidies will almost certainly be
required to promote the industry. If fuel taxes were to apply fully to ethanol, sugarcane-
based ethanol would be marginally feasible, but both sweet sorghum- and cassava-based
ethanol would be prohibitively expensive to produce for fuel. No biodiesel crop would be
economically feasible without a reduction in fuel taxes or some other subsidy.
If fuel taxes do apply to biofuels, they must at least be proportional to the energy content of
the fuel. For example, ethanol, which has about two-thirds the energy of petrol, should have
no more than two-thirds the tax that an equivalent volume of petrol would have. (The
economic feasibility analysis in Section 4.2 discusses this issue in more depth.) Additionally,
farm-scale production, where the fuel being produced is not being sold, should also be
exempt from fuel taxes. As Section 4.2 demonstrates, the cost of production of biodiesel at
the farm-scale would be prohibitively expensive if taxed fully. If fuel taxes are determined to
apply to biofuels, then another idea is to fix the tax based on the scale of production, so
small producers are able to compete with larger ones.
PIEA believes that tax reductions or exemptions on certain fuels are satisfactory as long as
the social and economic benefits to the country are clear. For example, the reason why the
tax on kerosene is less than that on diesel, which in turn is less than that on petrol, is the
need to enable poor Kenyans to better afford cooking and lighting oil. The purpose is to
alleviate the burdens on the customers of those fuels. A similar reduction or elimination of
the fuel tax on biofuels would enable Kenyan farmers and entrepreneurs the chance to reap
some of the economic benefits of petroleum dollars that are now flowing overseas.
Importantly, government revenues can be protected even as taxes are reduced or eliminated
for biofuels by accounting for the increased revenue from new biofuels businesses and/or
marginally increasing the existing fuel tax on petroleum products to make up for exempted
biofuels. For example, a Ksh 0.42 per liter increase in the roughly Ksh 20.5 fuel tax on
diesel would cover the loss of revenue if biodiesel were completely exempted from fuel taxes
up to a national B2 blend. A similar increase of Ksh 3.28 on each liter of petrol would offset
the loss of revenue from 93 million liter of ethanol required for an E10 blend. Neither
consumers nor the government would be affected by the change, although biodiesel
production would become a much more attractive investment for project developers and
farmers alike.
! Environmental Impact Assessment License Fee – NEMA imposes a fee of 0.1% of the total
project cost to obtain an EIAL. The law does not distinguish between either the type or
scale of the project when assessing the fee. Environmentally friendly projects, such as
biofuels reforestation ones, should not be treated equally to environmentally-detrimental
ones, such as industrial manufacturing involving toxic materials. Reducing or eliminating
this fee for biofuels projects should be considered.
! Equipment Import Taxes – Both CIF and excise taxes apply to machinery and equipment
that would be necessary for biofuels production in Kenya. Taken together, these taxes can
17 May 2008 103

increase the cost of equipment by 20% or more. The 2007 Finance Bill considered
exempting biofuels equipment, although ultimately abandoned the idea due to concerns over
identifying items that could only be used for biofuels. This initiative should be revisited.
! Seed Taxes – Seeds are currently taxed upon import and with a VAT. Removing at least a
portion of these taxes would promote the growing of biofuels crops and reduce the cost of
feedstock.
7.5 ENSURING ENVIRONMENTAL SUSTAINABILITY
If strict sustainability standards were adhered to, the Kenyan biofuels industry could be one of the
most environmentally sound in the world. The use of various crops that can grow in semi-arid areas
combined with sophisticated mapping to minimize conflicts with existing food production areas,
would enable large quantities of biofuels feedstocks to be produced in addition to, rather than at the
expense of, existing food production. Increased farm income and the development of new
agricultural areas would enrich rural areas with employment and new sources of income. This influx
of capital could then be used to invest in irrigation and better management practices, which would in
turn increase yields of all crops, including those grown for food.
The reliance on tree crops like croton and jatropha could be combined with reforestation and
afforestation projects, as well as efforts to reclaim marginalized lands. The GHG benefits of relying
on tree crops and growing feedstocks in semi-arid areas would also be greater than mimicking the
biofuels production model used in most of the industrialized world, whereby staple food crops
grown in arable lands or recently cleared rainforests are shipped around the world before they are
converted to biofuels.
Many environmental and socio-economic risks of a large biofuels industry in Kenya would remain.
For example, unchecked development and misguided subsidies could encourage massive
monoculture plantations on arable lands that would reduce potential employment and local income
benefits and threaten greater environmental harm than existing land uses. Different models of
production that have been developed for other cash crops, such as coffee, tea, sugarcane and
pyrethrum should be borrowed from where applicable. For example, the combination of nuclear
plantations and outgrowers should be encouraged.
Another potential threat is increased air and water pollution from unregulated biofuels production
facilities. It is essential that any regulatory review of existing air and water quality standards look
closely at the emissions and effluents that could be released by such plants and implement strict
rules for minimizing or eliminating adverse impacts. As is discussed in the regulatory analysis in
Section 5, air and water quality standards, or the laws authorizing them, already exist. The key to a
sustainable biofuels industry must include the development of reasonable requirements to protect air
and water resources and an effective program of enforcement to ensure compliance.
7.6 PILOT PROJECTS & AREAS OF FURTHER RESEARCH
There are many research projects that would greatly help the development of a biofuels industry in
Kenya, including in the areas of agronomy, fuel and blending standards, production technology and
processing, markets and consumer use. As discussed above, provenance and silvicultural trials for
croton, jatropha and perhaps other potential biofuels crops should be better coordinated and fully
17 May 2008 104

funded. Private farmers and agricultural companies stand ready to participate in these trials, offering
land and labor in exchange for premium planting materials and scientifically rigorous analysis and
advice. Pilot projects that demonstrate the viability of community based biofuels production
clusters, such as the one in Mpeketoni and the project involving the Aga Khan Foundation’s Coastal
Rural Support Programme, should also be encouraged and supported. KARI, KEFRI, ICRAF and
ICRISAT should coordinate their research into biofuels and develop a program of work that
addresses some of these needs.
Research into fuel quality and compatibility with different applications is also important, especially
given the varied feedstocks that may be used to produce biofuels in Kenya. KEBS should work
closely with KIRDI and the private sector to carry out tests and to determine appropriate standards
for fuel quality and blending. KIRDI could also provide assistance to the private sector in
evaluating different biofuels processing technologies and developing the local capacity to produce
and maintain such equipment.
Finally, research should be conducted into consumer behaviors and attitudes pertaining to biofuels,
with the goal of developing public education campaigns to sensitize people to the benefits of
producing and using biofuels in Kenya.
7.7 INFORMING & CREATING AWARENESS AMONGST DECISION MAKERS &

THE PUBLIC
A coordinated biofuels policy and associated legislation or regulations are important, however, it is
equally important that the government agencies charged with implementing the biofuels programs
have strong institutional capacity to follow through. Public education and participation in the
process is also very important as any comprehensive biofuels program will have broad impacts on
land use, agriculture and energy throughout Kenya.
Workshops, trainings and public events should be held to inform and capacitate various
stakeholders and the general public. In particular, special events should be organized for
parliamentarians and other government officials, possibly through existing mechanisms such as the
GTZ-sponsored Parliamentarian Network on Renewable Energy and Climate Change
(PANERECC). The success of public education campaigns on public health issues, such as
HIV/AIDS, could also serve as a model for public outreach on biofuels.
7.8 CONCLUSION
Kenya stands on the cusp of a tremendous opportunity to fuel economic growth with sustainably
produced biofuels. A favorable climate combined with decades of experience as a producer of
world-class agricultural products like coffee and tea makes Kenya well suited to the challenge of
developing a new biofuels industry. But to reap the many benefits biofuels could offer Kenya, a
focused effort will be required to develop and implement a framework that encourages investment,
while also protecting consumers, communities and the environment.
17 May 2008 105

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NOTES
1 Use of the term “biofuels” throughout this study refers to liquids such as ethanol and biodiesel.
2 U.S. Department of Energy, Energy Information Administration, “World Marketed Energy Use by Fuel, 1990-2030,”
<http://www.eia.doe.gov/oiaf/ieo/excel/figure_11data.xls> (10 December 2007).
3 U.S. Department of Energy, Energy Information Administration, International Energy Outlook 2007,
<http://www.eia.doe.gov/oiaf/ieo/index.html> (10 December 2007).

4 Suzanne Hunt and Peter Stair, “Biofuels Hit a Gusher,” Vital Signs 2006-2007 (Washington, D.C.: Worldwatch
Institute, 2006), 40-41; F.O. Licht, World Ethanol and Biofuels Report, vol. 4, no. 17 (May 2006), 395; Renewable Fuels
Association, “Statistics,” <http://www.ethanolrfa.org/industry/statistics> (25 November 2007); “World Biodiesel
Output Growth May Slow - Licht,” PLANET ARK, 29 March 2007,
<http://www.planetark.com/dailynewsstory.cfm/newsid/41147/story.htm> (15 December 2007); F.O. Licht, Ethanol
Production Costs (2007) 75; F.O. Licht, World Biodiesel Markets: The Outlook to 2010 (2007) iv.
5 Liquid biofuels can also be made out of solid biomass and biomass-derived synthesis gas. Biofuels from solid biomass
are produced through a process called flash pyrolysis, which heats the biomass to between 350°-500° C for about two
seconds. The resulting bio-oil is similar to heavy fuel oil and is generally used only in boilers and stationary generators.
As of 2006, there were only two flash pyrolysis plants in the world. Biomass can also be converted into synthesis gas,
which can be further processed into ethanol or Fischer-Tropsch diesel. As these technologies are more experimental
than commercial, we have decided not to treat them in any more depth. U.S. Department of Energy, Energy Efficiency
and Renewable Energy Program, Biomass Energy Data Book, September 2006, 37.
6 Photo credit: David Newman (2007).
7 Joseph DiPardo, U.S. Department of Energy, Energy Information Administration, “Outlook for Biomass Ethanol
Production and Demand,” <http://tonto.eia.doe.gov/FTPROOT/features/biomass.pdf> (30 November 2007).

8 D.V. Hunt, The Gasohol Handbook (New York: Industrial Press, 1981).
9 Renewable Fuels Association, “Statistics,” <http://www.ethanolrfa.org/industry/statistics/#E> (25 November 2007).
10 F.O. Licht, World Ethanol and Biofuels Report, 395.
11 U.S. Department of Energy, Energy Efficiency and Renewable Energy, “Alternative and Advanced Fuels, Low-Level
Ethanol Blends,” <http://www.eere.energy.gov/afdc/fuels/ethanol_blends.html> (1 December 2007).

12 U.S. Department of Energy, Energy Efficiency and Renewable Energy, “Clean Cities Fact Sheet, Flex-Fuel Vehicles,”
<http://www.eere.energy.gov/afdc/pdfs/41131.pdf> (1 December 2007).

13 Renewable Fuels Association, “Ethanol Facts: Engine Performance,”
<http://www.ethanolrfa.org/resource/facts/engine/> (2 December 2007).

14 Photo credit: Associated Press.
15 U.S. Department of Energy, Energy Efficiency and Renewable Energy, “Alternative Fuels and Advanced Vehicle
Data.”
16 The descriptions of the wet and dry milling process are from the Renewable Fuels Association website
<http://www.ethanolrfa.org/resource/made/> (2 December 2007).

17 Stockholm Environmental Institute, Producing Sugar, Ethanol and Electricity,
<http://www.sei.se/energy/sugarcane/7%20Producing%20sugar,%20ethanol%20and%20electricity.PDF> (2
December 2007).
18 Ralph Jaetzold, Farm Management Handbook of Kenya, vol. II, (2007), Part C: Western Kenya.
19 Jaetzold, Part C: Western Kenya.
21 Average yields for 2006 from Kenya Ministry of Agriculture, Economic Review of Agriculture: 2007, 23.
22 Jay K. Shelty et al., “Cassava as an alternative feedstock in the production of renewable transportation fuel,”
INTERNATIONAL SUGAR JOURNAL, vol. 109, no. 1307 (2007) 663, 673.
23 Photo credit: TVE, <http://www.handsontv.info/series7/series_7_pics/cassava1.jpg> (10 January 2008).
24 Photo credit: <http://www.projects.ex.ac.uk/pwh201/CSS/pictures/cassava.gif> (10 January 2008).
25 All data and maps from the International Centre for Agroforestry (ICRAF). GIS data layers from ICRAF, United
Nations Food & Agriculture Organization, and Worldclim. Suitability acreages are discounted by 50% in order to
account for competing land-use, security issues, poor infrastructure, and lack of transport to remote areas.
26 “Cassava: Uses and Recipes,” <http://www.knet.co.za/rbcassava/cassava_uses.htm> (10 January 2008); Stephen K.
O’Hair, Tropical Research and Education Center, University of Florida, “New Crop Factsheet,”
<http://www.hort.purdue.edu/newcrop/CropFactSheets/cassava.html> (10 January 2008).
17 May 2008 117

27 S.P. Ghosh et al., “Productivity, Soil Fertility and Soil Erosion Under Cassava Based Agroforestry Systems,”
AGROFORESTRY SYSTEMS, vol. 8 (1989) 67-82.
28 Shelty, 665; World Wildlife Fund, “Agriculture and Environment: Cassava, Environmental Impacts of Cassava,”
<http://www.panda.org/about_wwf/what_we_do/policy/agriculture_environment/commodities/cassava/environmen
tal_impacts/index.cfm> (10 January 2008).
33 Kenya Ministry of Agriculture, Annual Report: 2006.
35 Kenya Ministry of Agriculture, Annual Report: 2006; Kenya Sugar Board, Year Book of Sugar Statistics 2006, ii.
36 Emmanuel Matsika, “Status of Zambia Biofuel Programme and the Role of Sweet Sorghum as a Bio-ethanol
Feedstock,” presentation (December 2006).

37 Photo Credit: Wikipidia, <http://en.wikipedia.org/wiki/Sugarcane> (15 December 2007).
38 Photo Credit: <www.mossag.com.au/CropFacts.html> (15 December 2007).
39 All data and maps from the International Centre for Agroforestry (ICRAF). GIS data layers from ICRAF, U.N. Food
& Agriculture Organization, and Worldclim. Suitability acreages are discounted by at least 50% in order to account for
competing land-use, security issues, poor infrastructure, and lack of transport to remote areas.
40 J.M. Paturau, “Alternative Uses of Sugarcane and its By products in Agro Industries,”
<www.fao.org/docrep/003/s8850e/S8850E03.htm> (11 December 2007).

41 L.F.G. Pinto et al., “Feasibility of Agroforestry for Sugarcane Production and Soil Conservation in Brazil,” in
Sustaining the Global Farm, eds. D.E. Stott et al., 2001.

42 Kwarteng Kojo Emmanuel, “The Environmental and Energy Benefits of Sugarcane,” THE DAILY GRAPHIC
(Accra), April 2002; U.N. FAO, Land & Water Development Division, “Sugarcane,”
<http://www.fao.org/AG/aGL/AGLW/cropwater/sugarcane.stm> (10 December 2007); World Wildlife Fund,
“Agriculture and Environment: Commodities: Sugarcane,”
<http://www.panda.org/about_wwf/what_we_do/policy/agriculture_environment/commodities/sugarcane/index.cf
m> (10 December 2007).
43 B.M. Drees and John Jackman, Field Guide to Texas Insects, (Houston: Gulf Publishing Company, 1999),
<http://insects.tamu.edu/fieldguide/cimg257.html> (10 December 2007).

44 Kenya Sugar Research Foundation, Crop Protection Programme,
<http://www.kesref.org/innerkesref.php?subcat=28&sublev=3> (10 December 2007).

45 Bekele Shiferaw, ICRISAT, personal communication, November 2007.
46 Shiferaw, ICRISAT, personal communication, November 2007.
47 Bekele Shiferaw, ICRISAT, personal communication, November 2007.
48 Kenya Ministry of Agriculture, Technical Handbook.
49 Evergreen Biofuels, A Biofuels Strategy for Zambia, Draft, (February 2006); Kenya Ministry of Agriculture, Annual Report:
2006.
50 Belum V.S. Reddy et al., ICRISAT, “Sweet Sorghum - A Potential Raw Material for Ethanol,” (2007).
51 Photo credit: BIOPACT, <biopact.com/2007_09_13_archive.html> (12 January 2008).
52 Photo credit: Philippines Bureau of Agricultural Research, <www.bar.gov.ph> (12 January 2008).
Nations Food & Agriculture Organization, and Worldclim. Suitability acreages are discounted by at least 50% in order
to account for competing land-use, security issues, poor infrastructure, and lack of transport to remote areas.
54 U.N. FAO, “Sweet Sorghum in China,” (2002), <http://www.fao.org/ag/magazine/0202sp2.htm> (14 January 2008).
55 K. Munyinda, University of Zambia, Department of Crop Science, “Evaluation of Sweet Sorghum as an Alternative
Bioenergy Feedstock,” Presentation (December 2004).

56 D.J. Undersander et al., “Sorghum for Syrup,” Alternative Field Crops Manual, (1990),
<http://www.hort.purdue.edu/newcrop/afcm/syrup.html> (13 January 2008).

57 Photo credit: <http://catalinaarts.com/blog/wp-content/uploads/2007/06/SwitchGrassCrop.jpg> (15 December
2007).
58 Switchgrass is regarded as a highly invasive plant by Australian authorities.
59 U.S. Department of Energy, “DOE Selects Six Cellulostic Ethanol Plants for Up to $385 Million in Federal Funding,”
Press Release, February 28, 2007, <http://www.doe.gov/news/4827.htm> (25 November 2007).
17 May 2008 118

60 William H. Kemp, Biodiesel Basics and Beyond: A Comprehensive Guide to Production and Use for the Home and Farm, (Ontario:
Aztext Press, 2006) 4.
61 Switch Biofuels LLC, “Common Diesel Engine Myths Debunked,”
<http://www.switchbiofuels.com/2007/05/05/common-diesel-engine-myths-debunked> (25 November 2007).

62 National Biodiesel Board, “Straight Vegetable Oil as a Diesel,”
<http://www.biodiesel.org/pdf_files/fuelfactsheets/clean_cities_SVOpaper.pdf> (26 November 2007).

63 National Biodiesel Board, “Performance,” <http://www.biodiesel.org/pdf_files/fuelfactsheets/Performance.PDF>
(25 November 2007).

64 National Biodiesel Board, “Performance.”
67 National Biodiesel Board, “Performance,” (claiming no noticeable difference in performance during the more than 80
million road kilometers and countless marine and off-road applications that have occurred using biodiesel).
68 Anthony Radich, U.S. Department of Energy, “Biodiesel Performance, Costs and Use,”
<http://www.eia.doe.gov/oiaf/analysispaper/biodiesel/> (26 November 2007).

69 P. Gateau, “Twelve Years of Using 50% RME Fuel Mixture in Heavy Trucks and
Light Vehicles,” <http://www.ebb-

eu.org/studiesreports/AEA2006_GATEAU%2050%25%2012%20years%20FRANCE.pdf> (3 December 2007).
70 National Biodiesel Board, “Lubricity,” <http://www.biodiesel.org/pdf_files/fuelfactsheets/Lubricity.PDF> (28
November 2007).
72 U.S. Department of Energy, Energy Efficiency and Renewable Energy, “Alternative Fuels and Advanced Vehicle Data
Center.”
74 National Biodiesel Board, “ASTM Subcommittee Passes New Specification for 20 Percent Biodiesel: B20 Final
Approval Could Come as Early as June,” Press Release, <http://nbb.grassroots.com/08Releases/ASTM/> (20

December 2007).
75 Large continuous reaction biodiesel plants (approximately 50 million liters per year or more) are generally constructed
from the ground up by one of a handful of specialized companies led by Desmet Ballestra
(http://www.desmetballestraoleo.com), Lurgi (http://www.lurgi.com), and Crown Iron (http://crowniron.com). For
smaller and medium scales of production (from 100,000 liters per year to about 50 million liters per year), several
companies provide off-the-shelf, pre-fabricated systems that are generally based on the batch reactor model. These
include: Green Fuels UK (http://www.greenfuels.co.uk), EuroFuelTech (http://www.eurofueltech.com), and Bioking
(http://www.bioking.nl).
76 Raphael Shay, “National Biodiesel Surge Creates Bittersweet Co-Product with Glycerol,” Renewable Energy Access,
<http://www.renewableenergyaccess.com/rea/news/story?id=50702> (3 December 2007).

77 U.N. FAO, Ecocrop Database, <http://ecocrop.fao.org/ecocrop> (15 January 2008).
78 FAO Ecocrop Database.
79 FAO Ecocrop Database.
80 Dove Biotech, “Castor Bean (Ricinus communis) an International Botanical Answer to Biodiesel Production &
Renewable Energy,” adapted from the JOURNAL OF AMERICAN OIL CHEMISTS SOCIETY, vol. 65, no. 12 (1988)
<http://www.ienica.net/crops/castor.htm> (16 January 2008).
81 Actual yield in Kenya for 2006, as reported at U.N. FAO, FAOSTAT Database <http://faostat.fao.org> (5
December 2007).
82 Purdue University, Center for New Crops and Plants Database, “Ricinus Communis L,” James A. Duke, Handbook of
Energy Crops (1982),

<http://www.hort.purdue.edu/newcrop/duke_energy/Ricinus_communis.html#Yields%20and%20Economics> (5
December 2007); Kushal Patel, personal communication, 29 November 2007.
83 Assuming a 40% oil yield and 1,120 liters per tonne of biodiesel.
84 Photo credit: <http://www.askitsdone.co.uk/~angocho/Castor%20Oil2.jpg> (5 December 2007).
85 Photo credit: <http://faculty.ucc.edu/biology-ombrello/Images/CastorBean1.jpg> (5 December 2007).
87 E.S. Oplinger et al., University of Wisconsin, “Castorbean,” Alternative Crops Manual,
<http://www.hort.purdue.edu/newcrop/afcm/castor.html> (6 December 2007); Munyaradzi Chinongoza, “Castor
17 May 2008 119

Bean for Biodiesel Production,” <http://ezinearticles.com/?Castor-Bean-Oil-For-Biodiesel-Production&id=917729> (6

December 2007); “Castor,” adapted from JOURNAL OF AMERICAN OIL CHEMISTS SOCIETY, vol. 65, no. 12 (1988), and
A. Bonjean, Le Ricin, <http://www.ienica.net/crops/castor.htm> (6 December 2007).
88 Philippines Council for Agriculture, Forestry and Natural Resources Research and Development, Agroforestry
Information Network, Sloping Agricultural Land Technology (SALT-1): A Guide on How to Farm Your Hilly Land Without
Losing Your Soil, <http://www.pcarrd.dost.gov.ph/cin/AFIN/technologies%20-%20salt1.htm> (5 December 2007).
89 California Invasive Plant Council, “California Invasive Plant Inventory,” <http://www.cal-ipc.org> (15 March 2007);
“Ricinus Communis L,” James A. Duke, Handbook of Energy Crops; Africa Biofuel and Emission Reduction Company,
“Are all Biofuels Green by Definition?,” <http://www.africabiofuel.com/The_Product.aspx> (6 December 2007).
90 Indian Ministry of Communications and Information Technology, National Informatics Centre, “Pests and Diseases
of Castor,” http://www.ap.nic.in/oilseeds/Cpests.html; adapted from the JOURNAL OF AMERICAN OIL CHEMISTS

SOCIETY, vol. 65, no. 12 (1988), <http://www.ienica.net/crops/castor.htm> (7 December 2007).
91 Jaetzold, Part C: Eastern Kenya.
92 Jaetzold, Part C: Eastern Kenya
93 Jaetzold, Part C: Eastern Kenya
94 Kenya Ministry of Agriculture, Annual Report: 2006.
95 Kenya Ministry of Agriculture, Economic Review of Agriculture: 2007, 32.
96 Assuming 10,000 nuts per hectare at 100 nuts per tree and 100 trees per hectare. ABD-DANIDA, Coconut Sub-Sector in
Kenya, (May 2007), 10.

97 Assuming 728 liters per tonne of copra and 2 tonnes of nuts per tonne of copra.
98 Photo credit: <http://en.wikipedia.org/wiki/Coconut> (12 December 2007).
99 Photo credit: <www.hort.purdue.edu/ext/senior/fruits/coconut1.htm> (12 December 2007).
101 Coconut Museum, “The Many Uses of Coconut,” <http://www.coconut.com/museum/uses.html> (11 December
2007); “Coconut Palms in Belize: The Many Uses of Coconut, The Most Versatile ‘Tree’ in the World,”
<http://ambergriscaye.com/cocopalms/uses.html> (12 December 2007); U.N. FAO, “Focus on Coconut Wood,”
<http://www.fao.org/DOCREP/W7731E/w7731e04.htm> (12 December 2007); ABD DANIDA; Arthur C. Gibson,
University of California Los Angeles, “Coconut, Plant of Many Uses,”
<http://www.botgard.ucla.edu/html/botanytextbooks/economicbotany/Cocos/index.html> (13 December 2007).
102 U.N. University, “Institutional Agroforestry in the Pacific Islands,”
<http://www.unu.edu/unupress/unupbooks/80824e/80824E0j.htm> (12 December 2007).

103 American Phytopathological Society, “Common Names of Plant Diseases, Diseases of Coconut Palm,”
<http://www.apsnet.org/online/common/names/coconut.asp> (13 December 2007); Kenya Ministry of Agriculture,

Economic Review of Agriculture: 2007, 31.
107 Kenya Ministry of Agriculture, Technical Handbook.
108 Actual yield in Kenya for 2006, as reported by FAOSTAT.
109 Cotton Development Secretariat; Kenya Ministry of Agriculture, Annual Report: 2006.
110 Assuming 13% oil content and 1,120 liters of oil per tonne of seed, each tonne of cotton seeds will yield about 146
liters of biodiesel.
111 Photo credit: <www.oznet.ksu.edu> (4 December 2007).
112 Photo credit: <http://blog.pricegrabber.com/shopgreen/files/2007/07/organic-cotton.jpg> (4 December 2007).
114 National Cotton Council of America, “Cotton: from Field to Fabrics,”
<http://www.cotton.org/pubs/cottoncounts/fieldtofabric/uses.cfm> (5 December 2007); U.N. Conference on trade

and Development, “Cotton: Market Information in the Commodities Area,”
<http://r0.unctad.org/infocomm/anglais/cotton/uses.htm> (5 December 2007); FAO, Ecocrop Database.
115 Sarah W. Workman and Samuel C. Allen, “The Practice and Potential of Agroforestry in the Southeastern United
States,” University of Florida, Institute of Food and Agricultural Sciences, <http://edis.ifas.ufl.edu/FR146> (4

December 2007).
17 May 2008 120

116 Tariq Banuri, Pakistan: Environmental Impact of Cotton Production and Trade, UNEP,
<http://www.tradeknowledgenetwork.net/pdf/pk_Banuri.pdf> (6 December 2007); World Wildlife Fund, “Agriculture
and Environment: Cotton,”
<http://www.panda.org/about_wwf/what_we_do/policy/agriculture_environment/commodities/cotton/environment
al_impacts/index.cfm> (5 December 2007).
117 “Cotton Pests and Diseases,” Gossypium Encyclopedia, <http://www.experiencefestival.com/a/Gossypium_-
_Cotton_pests_and_diseases/id/1435485> (5 December 2007); National Cotton Council of America, “Cotton: from

Field to Fabrics.”
118 ICRAF, “Agroforestry Tree Database: A Tree Species Reference and Selection Guide,”
<http://www.worldagroforestrycentre.org/sea/products> (8 December 2007).

119 ICRAF, “Agroforestry Tree Database: A Tree Species Reference and Selection Guide.”
121 Rik Thijssen, ETC-Kenya Consultants, “Croton megalocarpus, The Poultry-Feed Tree: How Local Knowledge Could
Help to Feed the World,” presented at the International Conference on the Domestication and Commercialization of
Non-Timber Forest Products in Agroforestry System, <http://www.fao.org/docrep/w3735e/w3735e29.htm> (8
December 2007).
122 Assuming 25 kilograms per tree, 100 trees per hectare. Thijssen.
123 Assuming a 30% oil yield and 1,120 liters of oil per tonne of oil, each tonne of croton seeds will yield about 336 liters
of biodiesel. Thijssen.
127 Deborah A. Hines and Karlyn Eckman, Kakamega Environmental Education Programme (KEEP), “Croton
Megalocarpus,” <http://www.columbia.edu/cu/e3b/conservation/KEEP/croton.htm> (15 December 2007); ICRAF,

“Agroforestry Tree Database: A Tree Species Reference and Selection Guide;” U.S. Department of Agriculture, Forest
Service, Forest Products Laboratory, “Wood Technical Fatcsheet,”
<http://www2.fpl.fs.fed.us/TechSheets/Chudnoff/African/htmlDocs_africa/Crotonmegalocarpus.html> (16
December 2007); Thijssen.
128 T. Noad and A. Birnie, “Trees of Kenya,” <http://www.nhbs.com/trees_of_kenya_tefno_34280.html> (15
December 2007); Thijssen.

130 Purdue University, Center for New Crops and Plants Products, “Jatropha curcas,” from James A. Duke, Handbook of
Energy Crops, (1983), available at http://www.hort.purdue.edu/newcrop/duke_energy/Jatropha_curcas.html.

131 N. Foidl et al., “Jatropha Curcas L. as a Source for the Production of Biofuel in Nicaragua,” BIORESOURCE
TECHNOLOGY, vol. 58 (1996) 77-82.

132 “Jatropha curcas,” from James A. Duke, Handbook of Energy Crops.
133 D.N. Tewari, Jatropha & Biodiesel (New Delhi: Ocean Books, 2007), 49.
134 J. Heller, “Physic Nut, Jatropha curcas L: Promoting the Conservation and Use of Underutilized and Neglected Crops,”
PhD diss., Institute of Plant Genetic and Crop Plant Research, Gatersleben, Germany, and International Plant Genetic
Resource Institute, Rome, Italy, 1996), 752, <http://www.ipgri.cgiar.org/Publications/pdf/161.pdf> (18 December
2007); H.P.S. Makkar et al., “Studies on Nutritive Potential and Toxic Constituents of Different Provenances of Jatropha
curcas,” JOURNAL OF AGRICULTURAL AND FOOD CHEMISTRY 45 (1997): 3152-7.
135 Estimated yield based on 1.5 kilograms per tree after 7 years and 1,666 trees per hectare at 3x2 meter spacing.
Tewari, 49.
136 Estimated yield based on 2.5 kilograms per tree after 7 years and 1,666 trees per hectare at 3x2 meter spacing.
Tewari, 49.
137 Assuming a 30% oil yield and 1,120 liters per tonne of biodiesel.
17 May 2008 121

142 Lorna Omuodo, Vanilla Jatropha Development Foundation, personal communication, May 2007; Fritjof Boerstler,
UNDP, personal communication, May 2007; Mike Benge, Assessment of the potential of Jatropha curcas, for Energy Production
and Other Uses in Developing Countries, (July 2006)
<http://www.echotech.org/mambo/index.php?option=com_docman&task=doc_view&gid=179> (12 December
2007); Ramni Jamnadass, ICRAF, personal communication, 23 January 2007; Rebecca Selvarajah-Jaffery, When Oil Grows
on Trees (Nairobi: ICRAF, 2008).
143 ICRAF, “Agroforestry Tree Database: A Tree Species Reference and Selection Guide;” “The Potential of Jatropha
curcas in Rural Development and Environment Protection – An Exploration,” workshop presentation, 13-15 May 1998,
<http://www.jatropha.de/rf-conf1.htm> (15 December 2007); Invasive Plants Database, “Jatropha curcas,”
<http://invasive.m-fuukei.jp/sdetail.php?g=Jatropha&s=curcas> (15 December 2007).
144 C. Shanker and S.K. Dhyani, “Insect Pests of Jatropha curcas L. and the Potential for Their Management,” C URRENT
SCIENCE, vol. 91 (2006): 162-3; “The Potential of Jatropha curcas in Rural Development and Environment Protection –
An Exploration,” workshop presentation, 13-15 May 1998, <http://www.jatropha.de/rf-conf1.htm> (15 December
2007); Benge; ICRAF, “Agroforestry Tree Database: A Tree Species Reference and Selection Guide;” Steve Scott,
personal communication, July 2007.
145 Matti Sovero, “Rapeseed, A New Oilseed Crop for the United States,” in New Crops, J. Janick and J.E. Simon, eds.
(New York: Wiley, 1993) 302-307, <http://www.hort.purdue.edu/newcrop/proceedings1993/V2-302.html> (16

December 2007).
146 Kenya Agricultural Research Institute, Njoro, Annual Report: 2006.
149 Martin Dyer, personal communication, 29 November 2007; Kenya Agricultural Research Institute, Njoro, Annual
Reports: 2006.
150 Assuming a 35% oil yield and 1,120 liters of biodiesel per tonne of oil.
151 Photo credit: <http://www.houstonbiodiesel.com/assets/463873.jpg> (13 December 2007).
152 Photo credit: <http://i.treehugger.com/images/2007/10/24/rapeseed%20oil.jpg> (13 December 2007).
154 U.S. Department of Agriculture, Economic Research Service, “Crambe, Industrial Rapeseed, and Tung Provide
Valuable Oils,” (Sept. 1996) 17, <http://www.ers.usda.gov/publications/IUS6/ius6c.pdf> (29 January 2008).

155 Zhu Zhaohua et al., eds., Agroforestry in China - An Overview (Canada: IDRC, 1991),
<http://archive.idrc.ca/library/document/090916/> (29 January 2008).

156 D.L. Johnson and R.L. Croissant, Colorado State University, “Rapeseed/Canola Production,”
<http://www.ext.colostate.edu/pubs/CROPS/00110.html> (29 January 2008).

157 Kenya Ministry of Agriculture, Technical Handbook for Field Crops.
162 2005 data in Kenya, as reported by FAOSTAT.
163 Kenyan Ministry of Agriculture, Technical Handbook for Field Crops.
164 Assuming a 37% oil yield and 1,120 liters of biodiesel per tonne of oil.
165 Photo credit: <http://home.howstuffworks.com/define-sunflower.htm> (8 January 2008).
166 Photo credit: <http://www.nutsonline.com/images/items/07014l80.jpg> (8 January 2008).
168 D.H. Putnam et al., “Sunflower,” in Alternative Field Crops Manual,
<http://www.hort.purdue.edu/newcrop/afcm/sunflower.html> (8 January 2008); Irene Helen Zundel, “Sunflowers:

Interesting Facts, Their History, Their Cultivation and Commercial Use,”
<http://ksks.essortment.com/sunflowershisto_rnis.htm> (9 January 2008).
169 J.H.N. Palma et al., “Modeling Environmental Benefits of Silvoarable Agroforestry in Europe,” AGRICULTURE,
ECOSYSTEMS & ENVIRONMENT, vol. 119, issues 3-4 (2006): 20-334.

170 North Dakota State University, “Sunflower Pest Management,”
<http://www.ag.ndsu.edu/pubs/plantsci/rowcrops/eb25w-6.htm> (9 January 2008).
17 May 2008 122

171 Indian Ministry of Communications and Information Technology, National Informatics Centre, “Pests and
Diseases,” <http://www.ap.nic.in/oilseeds/sunbp1.html> (9 January 2008).
172 For more information on the history of research into algae-based biodiesel, see U.S. Department of Energy, National
Renewable Energy Laboratory, Biodiesel from Algae,

<http://www1.eere.energy.gov/biomass/pdfs/biodiesel_from_algae.pdf> (15 December 2007).
173 For more information on algae biodiesel reactors, see Algaelink (http://www.algaelink.com) and BioKing
(http://www.bioking.nl).
174 U.S. Department of Energy, Energy Information Agency, “Crude Oil prices by Selected Type 1970-2007,”
<http://www.eia.doe.gov/emeu/aer/txt/ptb1107.html> (2 December 2007); U.S. Bureau of Labor Statistics, “Inflation

Calculator,” <http://www.bls.gov/cpi> (25 November 2007).
176 George Wachira, Managing Director, Petroleum Institute of East Africa, personal communication, 14 November
2007.
177 Renewable Fuels Association, “Statistics,” <http://www.ethanolrfa.org/industry/statistics/#E> (15 November
2007).
179 Alan Mugera Andagalu, Marketing Officer, Agro-Chemical and Food Company, personal communication, 4
December 2007; Anton Van Tonder, Plant Director, Spectre International, personal communication, 4 December 2007.
180 According to the Kenya Sugar Board, Year Book of Sugar Statistics 2006 (2007), 170,940 tonnes of molasses was
produced in 2006.
181 Kenya just won an extension from COMESA on its ability to limit the quantity of duty free imported sugar to
200,000 tonnes per year in exchange for a commitment to privatize all remaining state-owner sugar mills. Kaburu
Mugambi, “Kenya: How Country Got COMESA to Nod on Sugar,” THE N ATION, 30 November 2007.
182 Jack Opondo, Assistant Production Manager, Mumias, personal communication, 5 December 2007.
183 Kenya Sugar Board, Year Book of Sugar Statistics: 2006 (2007) Table C.
184 Jack Opondo, Assistant Production Manager, Mumias Sugar Company, personal communication, 5 December 2007.
186 Based on estimates provide by Kenyan sugar companies.
187 Anton Van Tonder, Plant Director, Spectre International, personal communication 4 December 2007.
188 This estimate includes Agro-Chemical’s current 60,000 liter per day capacity, Spectre’s planned expansion to 230,000
liters per day, and Mumias plans to produce ethanol from its current molasses production, which would yield
approximately 50,000 liters per day of ethanol.
190 About 10 liters of ethanol per tonne of sugarcane can be extracted using molasses, whereas about 70 liters of ethanol
per tonne of sugarcane can be produced if all of the canejuice goes towards ethanol production.
191 Anton Van Tonder, Plant Director, Spectre International, personal communication, 4 December 2007.
192 Kenya Ministry of Energy as submitted by the oil marketers, obtained from Petroleum Institute of East Africa.
193 A production of 340,000 liters of ethanol per day would yield about 124 million liters per year, which is equivalent to
about 82 million liters of petrol due to the lower energy content of ethanol. Eighty-two million liters is about 13% of
projected petrol consumption of 618 million liters by 2013.
194 This information is based on accounts from various organizations with long-standing extension programs with
thousands of farmers throughout Kenya, including SVI Agroforestry in Kisumu, and the Aga Khan Foundation in Kilifi
and Malindi.
196 Emily Awuor, Special Projects Manager, Green Africa Foundation, personal communication.
197 Energy for Sustainable Development Africa, personal communication.
198 Rukia Bakari, Legal Advisor/Training Officer, Vanilla Jatropha Development Foundation, personal communication.
199 Fritjof Boerstler, UNDP-SGP, personal communication, 7 February 2008.
200 Jan Vandenabeele, Better Globe Forestry, personal communication, 30 January 2008.
201 Kushal Patel, Green Fuels (K), personal communication.
202 Dick Knight, Energy Africa, personal communication.
203 Steve Scott, Agri-Business Group, personal communication.
204 Eva-Christina Gessler, Head of Office, Green Power EA, personal communication.
205 Dr. Phanuel Oballa, Research Scientist, KEFRI, personal communication.
206 Kenya Ministry of Energy, Renewable Energy Department, Strategy for the Development of the Bio-Diesel Industry in Kenya
(2008-2012) (January 2008).
17 May 2008 123

207 Ministry of Energy, Biodiesel Strategy, 18.

210 F.O. Licht, World Biodiesel Markets, 34.
211 European Commission, “Directive on the Taxation of Energy Products,” 2003/96/EC; The “Promotional”
Directive, 2003/30/EC.
212 F.O. Licht, Ethanol Production Costs, 13.
215 U.S. Department of Energy, Energy Information Administration, “Brazil Energy Data, Statistics and Analysis,”
<http://www.eia.doe.gov/emeu/cabs/Brazil/Oil.html> (10 February 2008).

216 Charlotta Jull et al., FAO Legal Papers Online #68, Recent Trends in the Law and Policy of Bioenergy Production, Promotion
and Use, (September 2007) 12.

222 European Biodiesel Board, “Statistics,” <http://www.ebb-eu.org/stats.php> (20 November 2007).
224 U.S. Department of Energy, Energy Information Administration, “Germany Energy Data, Statistics and Analysis,”
<http://www.eia.doe.gov/emeu/cabs/Germany/Oil.html> (18 November 2007).

232 F.O. Licht, Ethanol Production Costs, 66-68.
236 Renewable Fuels Association, “Industry Statistics,” <http://www.ethanolrfa.org/industry/statistics/#A> (18
November 2007).
237 Doug Koplow, International Institute for Sustainable Development, Biofuels: At What Cost?: Government Support for
Ethanol and Biodiesel in the United States, <http://www.globalsubsidies.org/IMG/pdf/biofuels_subsidies_us_sum.pdf> (18

November 2007).
238 Koplow.
240 F.O. Licht, World Biodiesel Markets, 51-53.
241 Harry Stokes, “Commercialization of a New Stove and Fuel System for Household Energy in Ethiopia Using Ethanol
from Sugar Cane Methane from Natural Gas,” (30 October 2004),
<http://www.repp.org/discussiongroups/resources/stoves/Stokes/Ethopia%20Ethanol%20and%20Methanol.pdf>
(25 November 2007).
242 Bekele Kaleyesus, “Ethiopia Looks for Biofuel as Alternative Energy Source,” ALEXANDER G AS & OIL
CONNECTIONS (13 August 2007), <http://www.gasandoil.com/goc/news/nta73735.htm> (20 November 2007).

243 Stokes.
244 Andualem Sisay, “Ethiopia: Biofuel Won’t Cause Food Crisis,” AFRICA NEWS, 13 November 2007,
<http://www.africanews.com/site/list_messages/12869> (20 November 2007).

245 U.S. Central Intelligence Agency, “World Factbook – Ethiopia,” <https://www.cia.gov/library/publications/the-
world-factbook/geos/et.html> (20 November 2007).

246 Sisay.
247 Dan Liwimbi, Ethanol Company Limited (Malawi), presentation at UNEP Regional Workshop on Biofuels, May 28-
29, Nairobi, Kenya, <http://www.unep.org/urban_environment/PDFs/DanLiwimbiEthanol.pdf> (15 November

2007).
17 May 2008 124


249 Liwimbi
250 U.N. Energy, Sustainable Bioenergy: A Framework for Decisionmakers, 8,

251 Dominique Patton, “Mali Leads the Pack in Biodiesel Production,” BUSINESS DAILY, 30 October 2007
<http://www.bdafrica.com/index.php?option=com_content&task=view&id=3975&Itemid=5822> (15 November

2007).
252 IISD, “First High-Level Biofuels Seminar in Africa” 30 July - 1 August 2007, Addis Ababa, Ethiopia,
<http://www.iisd.ca/africa/biofuels/31july.html> (16 November 2007); F.O. Licht, Ethanol Production Costs, 71.
254 Swiss Agency for Development & Cooperation SDS, Biofuels: Opportunity or Threat to the Poor, 5,
<http://162.23.39.120/dezaweb/ressources/resource_en_159527.pdf> (16 November 2007); F.O. Licht, Ethanol

Production Costs, 71.
257 BIOPACT, “A Closer Look at Africa’s ‘Green OPEC,’” 2 August 2006, <http://biopact.com/2006/08/closer-look-
at-africas-green-opec.html> (16 November 2007).

260 Republic of South Africa, Department of Minerals and Energy, Biofuels Industrial Strategy of the Republic of South Africa,
(December 2007) 12, <http://www.dme.gov.za/pdfs/energy/biofuels_indus_strat.pdf> (17 November 2007).

261 Republic of South Africa, Biofuels Industrial Strategy of the Republic of South Africa, 12.
266 South African Bureau of Standards, “SANS 465:2005/ASTM D4806-04a 2004: Standard Specification for Denatured
Fuel Ethanol for Blending with Gasoline for Use as Automotive Spark-Ignition Engine Fuel;” South African Bureau of
Standards, “SANS 1935:2004: Automotive Biodiesel Fuel.”
270 F.O. Licht, Ethanol Production Costs, 71-72,
272 Dr. Rainer Janssen, “Opportunities for Biofuels in Tanzania,” presented at the Global Forum on Sustainable Energy,
6th Meeting, 29 November – 1 December 2006, Vienna, Austria; U.N. Industrial Development Organization, Asia-
Africa Investment Technology Promotion Centre, “Biofuels in Tanzania,” <http://www.unido-aaitpc.org/unido-
aaitpc/new1/tanzania/BIOFUEL%20PROJECTS1.pdf> (18 November 2007).
273 German Technical Corporation (GTZ), Liquid Biofuels for Transportation in Kenya, (August 2005) 23.
274 D1 Oils PLC, Preliminary Results for the Year Ended 31 December 2006, (28 March 2007),
<http://www.d1plc.com/pdf/news/556_D1%20RNS%20Final%2028-03-071.pdf> (17 November 2007).

275 Michael Kiza, Uganda Ministry of Energy and Mineral Development, “Role and Potentials of Bioenergy in Uganda’s
Energy Sector,” <http://www.svebio.se/attachments/33/299.pdf> (18 November 2007).

276 Kiza.
277 Fred Pearce, “Biofuels Plantations Fuels Strife in Uganda,” N EW SCIENTISTS, 19 April 2007,
<http://www.newscientist.com/article/dn11671-biofuel-plantations-fuel-strife-in-uganda.html> (18 November 2007).

278 Xan Rice, “Uganda ‘Averts Tragedy’ With Reversal of Decision to Clear Virgin Forest for Biofuel,” THE G UARDIAN,
29 October 2007, <http://www.guardian.co.uk/uganda/Story/0,,2201035,00.html> (18 November 2007).

279 Sandip Dave, BIDCO Oils Kenya, personal communication, 29 November 2007.
280 In 2006, Kenya used 509 million liters of petrol and 1.2 billion liters of diesel, according to the Petroleum Institute of
East Africa. This is equivalent to about 10.9 million barrels of oil, which, at an average price of $90 per barrel, equals
about $980 million.
281 U.S. Department of Energy, Energy Information Administration, “Great Lakes Region Country Analysis Brief,”
<http://www.eia.doe.gov/emeu/cabs/eafrica.html> (10 January 2008).

282 U.N. Energy, Sustainable Bioenergy: A Framework for Decisionmakers, 3,
17 May 2008 125

283 FAOSTAT. Field trials conducted by ICRISAT in other parts of the semi-arid tropics show that certain sweet
sorghum varieties can yield over 1 tonne of grain and between 30-40 tonnes of sweet stalk per hectare per year with two
crops, both unirrigated. Bekele Shiferaw, ICRISAT, personal communication.
284 The following notes correspond to the footnotes in the table:
+ The type of sorghum currently grown in Kenya does not contain a sweet stalk, as it is primarily grown as a
food grain. The sweet sorghum varieties that can be used for ethanol can produce much higher yields, according to
studies conducted by ICRISAT in India and Thailand, and can also produce grain for food and sugar for ethanol
simultaneously. The four “potential” scenarios use production numbers for sweet sorghum varieties being developed by
ICRISAT in other parts of the semi-arid tropics that are compatible with agro-ecological zones in Kenya.
++ Croton and jatropha are just beginning to be planted for commercial purposes, so no market for seeds or oil
has yet been established.

+++ Only negligible quantities of rapeseed are grown in Kenya, mostly near Laikipia, Nakuru, and Eldoret.
a Regarding Cassava, information on consumption and trade of cassava was unavailable to distinguish how
much, if any, surplus of current production could be available for ethanol without competing with food. Average yields
for 2006 from Kenya Ministry of Agriculture, Economic Review of Agriculture: 2007, 23.
b The reported yield for sugarcane in 2006 was 70.89 tonnes per hectare. However, the amount of sugarcane
produced is not a factor of yield times acreage because of the fact that Kenyan varieties typically take 18-24 months to
mature. In 2006, 147,730 hectares were planted with sugarcane and 4,932,839 tonnes were harvested, meaning that on
average each hectare under production produced 33.39 tonnes. Irrigated sugarcane varieties can mature much faster.
The sugarcane yield is the same for non-food and food competing; the conversion factor is what differs depending on
whether sugar and molasses is produced, or just ethanol. Kenya Sugar Board, Year Book of Sugar Statistics: 2006, (2007).
c 2005 data from FAOSTAT. Data for coconuts and cotton is from the Kenya Ministry of Agriculture,
Economic Review of Agriculture: 2007, 32. Due to the inconsistency between FAOSTAT and Kenya Ministry of Agriculture
data regarding production and consumption figures, it was not possible to calculate accurately the amount of coconut
and cottonseed that is not currently going to food and animal feed.
d About 10 liters of ethanol can be produced per tonne of sugarcane if the ethanol is derived from the molasses
byproduct of sugar production. About 70 liters per tonne can be produced if the entire production is dedicated towards
ethanol production. Jack Opondo, Assistant Production Manager, Mumias Sugar Company, personal communication, 5
December 2007.
e About 1 tonne of fresh cassava will yield between 160-180 liters of ethanol. Jay K. Shelty et al., “Cassava as
an alternative feedstock in the production of renewable transportation fuel,” I NTERNATIONAL S UGAR JOURNAL, Vol.
109, no. 1307 (2007): 663, 673.
f With a 40% oil yield and 1,120 liters of oil per tonne of oil, each tonne of castor beans will yield about 448
liters of biodiesel. “Purple-Coloured Castor (Ricinus communis L.) – A Rare Multiple Resistant Morphotype,”
CURRENT SCIENCE, vol. 88, no. 2 (25 January 2005): 215, <http://www.ias.ac.in/currsci/jan252005/215.pdf> (3
January 2008).
g At roughly 3,000 nuts per tonne of coconut and about 6,000 nuts per tonne of copra, approximately 2 tonnes
of nuts are required for every tonne of copra. With a 65% oil content and 1,120 liters of oil per tonne, each tonne of
copra will produce about 728 liters of biodiesel. Beatrice Gambo, personal communication; District Agricultural
Officer, Kilifi, personal communication.
h At roughly 13% oil content and 1,120 liters of oil per tonne of seed, each tonne of cottonseeds will yield
about 146 liters of biodiesel. Andrew Okello, personal communication.

i With a 37% oil yield and 1,120 liters of oil per tonne of oil, each tonne of sunflower seeds will yield about 414
liters of biodiesel. Evergreen Biofuels.

j With a 30% oil yield and 1,120 liters of oil per tonne of oil, each tonne of croton seeds will yield about 336
liters of biodiesel. Thijssen.

k With a 30% oil yield and 1,120 liters of oil per tonne of oil, each tonne of jatropha seeds will yield about 336
liters of biodiesel. K.S. Pant et al., “Seed Oil Content Variation in Jatropha curcas in Different Altitudinal Ranges and
Site Conditions in H.P. India,” LYONIA, vol. 11(2) (December, 2006),
<http://www.lyonia.org/downloadPDF.php?pdfID=390.487.1http://www.lyonia.org/downloadPDF.php?pdfID=390.
487.1> (3 January 2008).
l With a 35% oil yield and 1,120 liters of oil per tonne of oil, each tonne of rapeseed will yield about 392 liters
of biodiesel.
17 May 2008 126

a Average yields for 2006 from Kenya Ministry of Agriculture, Economic Review of Agriculture: 2007, (2008) 23.
b The reported yield for sugarcane in 2006 was 70.89 tonnes per hectare. However, the amount of sugarcane
produced is not a factor of yield times acreage because of the fact that Kenyan varieties typically take 18-24 months to
mature. In 2006, 147,730 hectares were planted with sugarcane and 4,932,839 tonnes were harvested, meaning that on
average each hectare under production produced 33.39 tonnes. Irrigated sugarcane varieties can mature much faster.
The sugarcane yield is the same for non-food and food competing; the conversion factor is what differs depending on
whether sugar and molasses is produced, or just ethanol. Kenya Sugar Board, Year Book of Sugar Statistics: 2006, (2007).
c 30-40 tonnes of sweet stalk estimated over two harvests per year per hectare without irrigation. Bekele
Shiferaw, ICRISAT, personal communication.

d 2005 data from FAOSTAT. Data for coconuts and cotton is from the Kenya Ministry of Agriculture,

e Assuming 25 kg/tree, and 100 trees per hectare at 10x10 spacing equals 2,500 kg. Thijssen.
f Assuming 1.5 kg/tree after 7 years of growing, times 1,666 trees per hectare with 2x3m spacing. Tewari, 49.
g Assuming 1.5-2.5 tonnes per hectare unirrigated. KARI, Njoro Field Office.
h From GIS mapping conducted by ICRAF based on agronomic parameters for each feedstock, as well as data
sets showing where food crops are currently being grown in Kenya.
i 1 tonne of fresh cassava will yield between 160-180 liters of ethanol. Shelty, 673.
j About 10 liters of ethanol can be produced per tonne of sugarcane if the ethanol is derived from the molasses
December 2007.
k Assuming 40 liters per tonne of sweet stalk. Reddy.
l With a 40% oil yield and 1,120 liters of oil per tonne of oil, each tonne of castor beans will yield about 448
January 2008).
m At roughly 3,000 nuts per tonne of coconut and about 6,000 nuts per tonne of copra, approximately 2 tonnes
n At roughly 13% oil content and 1,120 liters of oil per tonne of seed, each tonne of cottonseeds will yield

o With a 37% oil yield and 1,120 liters of oil per tonne of oil, each tonne of sunflower seeds will yield about 414

p With a 30% oil yield and 1,120 liters of oil per tonne of oil, each tonne of croton seeds will yield about 336

q With a 30% oil yield and 1,120 liters of oil per tonne of oil, each tonne of jatropha seeds will yield about 336
liters of biodiesel. K.S. Pant.

r With a 35% oil yield and 1,120 liters of oil per tonne of oil, each tonne of rapeseed will yield about 392 liters
of biodiesel.
a U.N. FAO, The World Cassava Economy: Facts, Trends & Outlook, Chapter 3.1,
<http://www.fao.org/docrep/009/x4007e/X4007E04.htm#ch3.1> (3 January 2008).

b Based on the average yield per hectare of sugarcane in Brazil. F.O. Licht, Ethanol Production Costs, 77.
c Assuming 2 crops per year at 35 tonnes per crop. Reddy.
d Assuming a yield of 1.2 tonnes per hectare. Purdue University, Center for New Crops and Plants Database,
“Ricinus Communis L,” from James A. Duke, Handbook of Energy Crops (1982),
17 May 2008 127

<http://www.hort.purdue.edu/newcrop/duke_energy/Ricinus_communis.html#Yields%20and%20Economics> (5
December 2007)
e Assuming 10,000 nuts per hectare with 100 nuts per tree and 100 trees per hectare. About 3 nuts per kilogram
equals 3.33 tonnes per hectare. ABD-DANIDA, 10.

f Assuming 3 tonnes per hectare irrigated. Kenya Cotton Development Secretariat; Kenya Ministry of
Agriculture, Annual Report: 2006.

g Assuming 3 tonnes irrigated. Kenya Ministry of Agriculture, Technical Handbook for Field Crops; Evergreen
Biofuels.
h 25 kg/tree, and 100 trees per hectare at 10x10 spacing equals 2,500 kilograms. Thijssen.
i Irrigated estimate of 2.5 kilograms per tree after 7 years, times 1,666 trees per hectare with 2x3m spacing.
Tewari, 49.
j Assuming 3-4 tonnes per hectare irrigated. Martin Dyer, personal communication; KARI, Njoro Field Office.
k 1 tonne of fresh cassava will yield between 160-180 liters of ethanol. Shelty, 673.
l About 10 liters of ethanol can be produced per tonne of sugarcane if the ethanol is derived from the molasses
December 2007.
m Assuming 40 liters per tonne of sweet stalk. Reddy.
n With a 40% oil yield and 1,120 liters of oil per tonne of oil, each tonne of castor beans will yield about 448
January 2008).
o At roughly 3,000 nuts per tonne of coconut and about 6,000 nuts per tonne of copra, approximately 2 tonnes
p At roughly 13% oil content and 1,120 liters of oil per tonne of seed, each tonne of cottonseeds will yield

q With a 37% oil yield and 1,120 liters of oil per tonne of oil, each tonne of sunflower seeds will yield about 414

r With a 30% oil yield and 1,120 liters of oil per tonne of oil, each tonne of croton seeds will yield about 336

s With a 30% oil yield and 1,120 liters of oil per tonne of oil, each tonne of jatropha seeds will yield about 336
liters of biodiesel. K.S. Pant.

t With a 35% oil yield and 1,120 liters of oil per tonne of oil, each tonne of rapeseed will yield about 392 liters
of biodiesel.
u From GIS mapping conducted by ICRAF based on agronomic parameters for each feedstock, as well as data
sets showing where food crops are currently being grown in Kenya.
287 Kenya Energy Regulatory Commission, “Current Electricity Tariffs,” <http://www.erb.go.ke/tariffs_structure.htm>
(5 January 2008).
288 Anton Van Tonder, Plant Director, Spectre International, personal communication, 12 February 2008; Alan Mugera
Andagalu, Marketing Officer, Agro-Chemical, personal communication 12 February 2008.

Andagalu, Marketing Officer, Agro-Chemical, personal communication 12 February 2008.

290 Overall production costs are calculated from data contained in F.O Licht, Ethanol Production Costs, 101-113. The
capital, or fixed costs, are taken directly from the study, in cases where the cost has been broken down to a per liter
amount. In cases where the capital cost is presented as an overall amount, like $10 million for an ethanol plant with a 20
million liter capacity, then the per liter cost is calculated based on a 50% debt (10 year loan at 10% annual interest), 50%
equity financing (15% return on investment).
291 F.O Licht, Ethanol Production Costs, 101-113.
292 Anton Van Tonder, Plant Manager, Spectre International, personal communication, 12 February 2008.
294 Overall production costs are calculated from data contained in F.O Licht, Ethanol Production Costs, 101-113. The
capital, or fixed costs, are taken directly from the study, in cases where the cost has been broken down to a per liter
amount. In cases where the capital cost is presented as an overall amount, like $10 million for an ethanol plant with a 20
17 May 2008 128

million liter capacity, then the per liter cost is calculated based on a 50% debt (10 year loan at 10% annual interest), 50%
equity financing (15% return on investment).
297 Ministry of Agriculture, Economic Review of Agriculture: 2007, (2008) 23.
298 The Kilifi and Bungoma District Guidelines place the per hectare cost of production at Ksh 31,700 and, according to
FAOSTAT, the current yield for cassava in Kenya is 9.6 tonnes per year, which means the cost of production is Ksh
3,302 per tonne.
Andagalu, Marketing Officer, Agro-Chemical, personal communication, 12 February 2008.

300 Croton may be used as chicken feed, however, because there is no large-scale market for the product, we calculate the
value of the seedcake as biogas rather than animal feed.

301 The following notes explain how we calculated current cost of the different oilseed feedstocks and seedcake revenue.
For inedible crops, like castor and jatropha, biogas is calculated at 150 cubic meters, or 113 kilograms, of liquid
petroleum gas equivalent per tonne of seedcake and Ksh 40 per kilogram. Seedcake revenue for both biogas and animal
feed is also a factor of oil yield, where low yielding seeds, like cotton, will produce more seedcake per tonne, compared
with high yielding oilseeds, like coconut.
a FAOSTAT lists the import price for castor oil in 2005 at $1,247 per tonne, which would be roughly Ksh 72.4
per liter, much more than the Ksh 38.6 included here. However, FAOSTAT lists the price of castor beans in Kenya in
2005 at Ksh 11,727 per tonne and personal communication with farmers provided a price of Ksh 12,000-15,000 per
tonne of seed, so we have used an estimated price of Ksh 20,000 per tonne of seed, which may be too low.
b This is the price of copra, not coconuts. The Ministry of Agriculture puts the cost of one tonne of nuts at
Ksh 11,300. Ministry of Agriculture, Economic Review of Agriculture: 2007, 32. At approximately two tonnes of nuts for
every tonne of copra, that means a tonne of copra will cost 22,600 plus processing of the copra, which we estimate at
Ksh 2,000 per tonne, for a total price of copra of Ksh 24,600 per tonne. However, because much of the coconut
subsector is currently underutilized, we have increased the price another Ksh 2,000 per tonne as an incentive for
producers to deliver to the market. Including a 5% rate of inflation per year onto the total of 24,600, the 2008 price is
estimated at Ksh 29,327 per tonne of copra. The price of seedcake is Ksh 4,856 per tonne, which is based on the 2005
year import price, according to FAOSTAT, multiplied times factor of two based on the average increase in oilseed
products since 2005, as reported in U.S. Department of Agriculture, Oilseeds: World Markets and Trade, (February 2008),
Tables 29-31, <http://www.fas.usda.gov/oilseeds/circular/2008/February/Oilseeds0208.pdf> (15 March 2008).
c The price is based on the average price from 2003 to 2006, according to Kenya Ministry of Agriculture,
Economic Review of Agriculture: 2007, 30. The price of seedcake is based on personal conversations with oilseed crushing
companies in Nairobi, as of March 2008.
d The price of croton seeds are estimated based on a survey of farmers and extension throughout areas where
croton is grown.
e The price of jatropha is estimated based on a survey of farmers and extension throughout areas where croton
is grown.
f The price of rapeseed is based on the import price of rapeseed oil in 2005, according to FAOSTAT, which
was $1,255 per tonne, which equals about Ksh 73 per liter. Prices of rapeseed oil globally have risen significantly since
2005, with the price of canola oil in Rotterdam at $1,405 per tonne in January 2008, according to the U.S. Department of
Agriculture, Oilseeds: World Markets and Trade, Table 31. However, KARI, Njoro cites a farm price of Ksh 18,000 per
tonne as of the end of 2007. We have chosen to discount the price to the equivalent of $800 per tonne of oil, which is
equal to about Ksh 46 per liter without accounting for pressing costs. The price of rapeseed cake is estimated at Ksh
12,000 per tonne, which is based on personal communication with oilseed processing companies in Nairobi as of March
2008.
g The price of sunflower seeds is based on the 2005 year price listed on FAOSTAT, multiplied times a factor of
1.8, which is the amount sunflower prices have risen on the world market over that period according to U.S.
Department of Agriculture, Oilseeds: World Markets and Trade, Table 31. The price of sunflower seed cake is estimated at
Ksh 16,000 per tonne, which is based on personal communication with oilseed processing companies in Nairobi as of
March 2008.
302 ABD-DANIDA, vii.
303 F.O Licht, World Biodiesel Markets, 18.
305 Personal communication, Anton Van Tonder, Spectre Chemical; personal communication, Agro-Chemical.
17 May 2008 129


309 FAOSTAT, reporting Uganda produced 1.95 million tonnes of sugarcane in 2006.
310 Matthew Owen and John Saka, GTZ Programme for Biomass Energy Conservation in Southern Africa and Malawi
Department of Energy Affairs, “The Gel Fuel Experience in Malawi,” (2006).

311 F.O Licht, World Biodiesel Markets, 80.
313 The additional 93 million liter capacity would generate about Ksh 4.65 billion at ~ Ksh 50 per liter wholesale price.
This does not account for the capital investments in the plants. One study estimated annual local economic benefits of
about $1.48 per liter of ethanol produced in the United States. John M. Urbanchuk, Contribution of the Ethanol Industry to
the Economy of the United States (21 February 2006) 6,
<http://www.ethanolrfa.org/objects/documents/576/economic_contribution_2006.pdf> (15 January 2008)
(estimating $115 million annual addition to the local economy for a 50 million gallon per year ethanol plant).
314 Jack Opondo, Assistant Production Manager, Mumias Sugar Company, personal communication, 5 December 2007;
Anton Van Tonder, Plant Director, Spectre International, personal communication, 4 December 2007; U.S. Department
of Agriculture, Oak Ridge National Laboratory, Biofuels and Agriculture: A Factsheet for Farmers, (September 2001),
<http://www1.eere.energy.gov/biomass/pdfs/farmerfactsheet.pdf> (3 February 2008) (estimating that a 100-million-
gallon/year ethanol production facility would create 2,250 local jobs for a single community).
317 Kenya Sugar Board, Year Book of Sugar Statistics 2006, Table 8.
318 The following sources were used to calculate farm income:
a Cost of production and price is from the Bungoma and Kilifi District Guidelines. Yield is from the Ministry
of Agriculture, Economic Review of Agriculture: 2007, 23.

b Yield is based on the average annual yield for sugarcane, which is about half of the current yield of about 70
tonnes per hectare due to the 18-24 month growing cycle. Kenya Sugar Board, Year Book of Sugar Statistics: 2006.
c Data on yields and the cost of production is taken from Reddy et al.
319 New York State Energy Research and Development Authority, Statewide Feasibility Study for a Potential New York State
Biodiesel Industry, Final Report 04-02 (June 2003); George A. Shumaker et al., A Study on the Feasibility of Biodiesel Production in
Georgia (estimating 18 direct and indirect jobs for a 1.8 million liter plant and 53 jobs for a 10.8 million a year plant).
320 Projected yields under rainfed conditions were taken from Tewari, 49.
321 Kenya Ministry of Energy, as submitted by Petroleum Marketers, “Kenya Inland Petroleum Sales.”
322 U.S. Department of Energy, Energy Information Administration, International Energy Annual 2005,
<http://www.eia.doe.gov/emeu/international/oilconsumption.html> (1 February 2008); Kenya Ministry of Planning

and National Development, Central Bureau of Statistics, “Facts and Figures of Kenya 2006;” Kenya Ministry of Energy,
as submitted by Petroleum Marketers, “Kenya Inland Petroleum Sales.”
323 The following notes correspond to the lettered citations in the table:
simultaneously.
a 9.6 tonnes per hectare of cassava root, according to Ministry of Agriculture, Economic Review of Agriculture:
2007, 23. 1 tonne of fresh cassava will yield about 170 liters of ethanol, according to Shelty et al., 673.
b 70.89 tonnes per hectare of sugarcane, according to Kenya Sugar Board, Year Book of Sugar Statistics, 2006. At
70 liters of ethanol per tonne of cane if only ethanol is produced, and 10 liters per tonne of cane if molasses is used, the
total ethanol production per hectare is about 4,962 liters per hectare from canejuice and 709 liters per hectare from
molasses.
c 35 tonnes per hectare of sweet sorghum, according to personal communication, Bekele Shiferaw, ICRISAT,
personal communication. At 40 liters of ethanol per tonne of sorghum stalks, about 1,400 liters of ethanol can be
produced per hectare of sweet sorghum.
d 10% of 2006 petrol consumption in Kenya is 50.9 million liters. Discounting for the lower energy content in
ethanol would require 77.12 million liters to replace 10% of petrol. Kenya Inland Petroleum Sales, Kenya Ministry of
Energy, as submitted by Petroleum Marketers.
e Kenya Ministry of Agriculture, Economic Review of Agriculture: 2007, 23.
f Kenya Sugar Board, Year Book of Sugar Statistics: 2006, (2007).
324 The following notes correspond to the lettered citations in the table:
17 May 2008 130

+ Croton and jatropha are just beginning to be planted for commercial purposes, so no market for seeds or oil
has yet been established.
++ Only negligible quantities of rapeseed are grown in Kenya, mostly near Laikipia, Nakuru, and Eldoret.
a We assume an average yield of 1 tonne per hectare. The current yield for castor in Kenya, 0.23 tonnes per
hectare, is extremely low due to the lack of proper management and intercropping. The optimal yield of over 1 tonne
per hectare. At a 40% oil yield, multiplied times 1.12 to account for the conversion from tonnes to liters, each tonne of
castor will produce 448 liters of biodiesel.
b Current yield for coconut is 1.64 tonnes of nuts, or 0.82 tonnes of copra, per hectare, according to Kenya
Ministry of Agriculture, Economic Review of Agriculture: 2007, 32. With a 65% oil content multiplied times 1.12 to account
for the conversion from tonnes to liters, each tonne of copra will produce about 728 liters of biodiesel.
c Current yield for cottonseed is 0.6 tonnes per hectare, according to Kenya Ministry of Agriculture, Economic
Review of Agriculture: 2007, 30. At roughly 13% oil content and 1,120 liters of oil per tonne of seed, each tonne of cotton
seeds will yield about 146 liters of biodiesel.
d At 2.5 tonnes per hectare and a 30% oil yield, multiplied times 1.12 to account for the conversion from
tonnes to liters.
e At 2.5 tonnes per hectare and a 30% oil yield, multiplied times 1.12 to account for the conversion from
tonnes to liters.
f At 2 tonnes per hectare and 35% oil content, multiplied times 1.12 to account for the conversion from tonnes
to liters.
g At 0.92 tonnes per hectare and 37% oil content, multiplied times 1.12 to account for the conversion from
tonnes to liters.
h 2005 data from FAOSTAT. Data for coconuts and cotton is from the Kenya Ministry of Agriculture,

325 Kenya Ministry of Energy, as submitted by Petroleum Marketers, “Kenya Inland Petroleum Sales,” (reporting a total
of 13.65 million barrels of oil for petrol and automotive diesel combined); U.S. Department of Energy, Energy
Information Administration, “This Week in Energy,” (3 January 2008)
<http://tonto.eia.doe.gov/oog/info/twip/twip.asp> (20 February 2008) (listing an average price of US$72 per barrel of
oil in 2007); U.S. Central Intelligence Agency, “World Factbook, Kenya,”
<https://www.cia.gov/library/publications/the-world-factbook/geos/ke.html> (7 December 2007) (reporting US$17.5
billion GDP for Kenya in 2006).
326 U.S. Central Intelligence Agency, “World Factbook, Kenya.”
327 U.N. Convention on Climate Change, “Production of Biodiesel Based on Waste Oils and/or Waste Fats From
Biogenic Origin for Use as Fuel,” AM0047.

328 U.N. Convention on Climate Change, “Registered Projects by Region,”
<http://cdm.unfccc.int/Statistics/Registration/RegisteredProjByRegionPieChart.html> (25 January 2008).

329 The laws of Kenya include the following: The Constitution of the Republic of Kenya and subject thereto, all other
written laws, including certain Acts of Parliament of the United Kingdom as listed and modified in accordance with the
first and Second schedules of the Judicature Act (Cap. 8) of the laws of Kenya; subject thereto and so far as those
written laws do not extend or apply, the substance of the common law, the doctrines of equity and the statutes of
general application in force in England on the 12th August 1897, and the procedure and practice observed in courts of
justice in England at that date. However, the common law, doctrines of equity and statutes of general application shall
apply so far only as the circumstances of Kenya and its inhabitants permit and subject to such qualifications as those
circumstances may render necessary. Further, African customary law shall apply in civil cases in which one or more of
the parties is subject to it or affected by it, so far as it is applicable and is not repugnant to justice and morality or
inconsistent with any written law.
330 The Energy Act, Kenya Gazette Supplement No. 96 (Act No. 12) of 2006, § 103 [hereinafter referred to as the
“Energy Act”] (compelling the State to pursue and facilitate the production of biofuels).
331 Energy Act, § 2.
332 Energy Act, § 3 (stating that “[t]he provisions of this Act shall apply, as hereinafter specified, to every person or body
of persons importing, exporting, generating, transmitting, distributing, supplying or using electrical energy; importing,
exporting, transporting, refining, storing and selling petroleum or petroleum products; producing, transporting,
distributing and supplying of any other form of energy, and to all works or apparatus for any or all of these purposes.”)
333 Energy Act, § 6 (providing the ERC with “all powers necessary or expedient for the performance of its functions
under this Act,” including: the issuance of licenses and permits; environmental, health and safety regulations for the
energy sector; and the investigation and punishment of violations of the Act or any regulations made thereunder).
17 May 2008 131

335 Energy Act, §§ 27, 80.

336 See generally, Energy Act, Part V (including no requirement on license or permit for any business regarding renewable
energy).
337 The Industrial Alcohol (Possession) Act, Chapter 119 of the Laws of Kenya, repealed 10 October 2007 by the
Licensing Laws (Repeal and Amendment) Act, No. 5 of 2007, § 4.

338 Energy Act, §§ 3, 103.
339 Energy Act, § 115 (emphasis added).
340 Kenya Bureau of Standards, KS 03-515:1990, “Specification for 10% Gasohol;” KS 03-382:1982, “Specification for
Power Alcohol.”
341 Energy Act, § 95.
342 The Environmental Management and Coordination Act [hereinafter referred to as the EMCA], No. 8 of 1999 of the
Laws of Kenya, § 59(1); Environmental (Impact Assessment and Audit) Regulations [hereinafter referred to as the EIA
Regulations], 2003, Kenya Gazette Supplement No. 56 (Legislative Supplement No. 31) Legal Notice No. 101.
343 EIA Regulations, §§ 17, 22.
344 The Petroleum Act, Chapter 116 of the Laws of Kenya, the Petroleum Rules.
345 The Factories and Other Places of Work Act, Chapter 514 of the Laws of Kenya, § 9(1)
346 The Factories and Other Places of Work (Risk Reduction) Rules, 2007.
347 The Employment Act, Kenya Gazette Supplement No. 107, Act No. 11 of 2007, § 15.
348 The Labour Relations Act, No. 14 of 2007, § 5.
349 The Labour Relations Act, §§ 48, 49.
350 The Work Injuries Benefits Act, No. 13 of 2007, § 11.
351 The Work Injuries Benefits Act.
352 This is if the accident was due to an act done by the employee for the purpose of, in the interests of or in connection
with, the business of the employer despite the fact that the employee was at the time of the accident acting in
contravention of any law or instructions by or on behalf of his employer or without any instructions from the employer.
Even when the employee is being conveyed to work in a vehicle provided by the employer for that purpose, he is
deemed to be in the course of his employment.
353 EMCA, § 57.
354 The National Environment Action Plan Committee (NEAP) is established under EMCA, § 37(1).
355 EMCA, §§ 37(2), 38(c).
356 The Seeds and Plant Varieties Act, Chapter 326 of the Laws of Kenya.
357 EMCA, Second Schedule, “Projects to Undergo Environmental Impact Assessment,” as read with EMCA, § 58(1).
358 EMCA, §§ 2, 58.
359 EMCA, § 58(1).
360 EIA Regulations, § 48.
361 EMCA, §§ 58(8)-(9).
362 EMCA, § 59(1).
363 EIA Regulations.
364 EMCA, § 58(7).
365 EMCA, § 63.
366 These circumstances are where: there is substantial change or modification in the project or in the manner in which
the project is being operated; the project poses environmental threat which could not be reasonably foreseen at the time
of the study, evaluation or review; or it is established that the information or data given by the proponent in support of
his/her application for an environmental impact assessment license under section 58 was false, inaccurate or intended to
mislead. Any failure, neglect or refusal to comply with the directions of NEMA issued as above is an offence. EMCA §
64(1).
367 EMCA, §§ 65(2)-(3).
368 EMCA, § 42 (1): “No person shall, prior written approval of the Director-General given after an environmental
impact assessment, in relation to a river, lake or wetland in Kenya, carry out any of the following activities Erect,
reconstruct, place, alter, extend, remove or demolish any structure or part of any structure in, or under the river, lake or
wetland; excavate, drill, tunnel or disturb the river, lake or wetland; introduce any animal whether alien or indigenous,
dead or alive, in any river, lake or wetland introduce or plant any part of a plant specimen, whether alien or indigenous,
dead or alive, in any river, lake or wetland; deposit any substance in a lake, river or wetland or in, on, or under its bed, if
that substance would or is likely to have adverse environmental effects on the river, lake or wetland; direct or block any
river, lake or wetland from its natural and normal course; or drain any lake, river or wetland.”
369 EMCA, § 42.
17 May 2008 132

370 EMCA (Water Quality) Regulations, 2006, Legal Notice No. 120 (Kenya Gazette Supplement No. 68, Legislative
supplement No. 36).
371 The EMCA (Water Quality) Regulations contain precise and calculated standards in the schedules at the back of the
text for water of different sources and for all uses. One can consult the text for specific information.
372 EMCA (Water Quality) Regulations, 2006, rules 5, 11.
373 An Effluent Discharge License is non-transferable. EMCA (Water Quality) Regulations, 2006, rules 11, 18.
374 EMCA (Water Quality) Regulations, 2006, rule 14.
375 EMCA (Water Quality) Regulations, 2006, rule 10.
376 The Pharmacy and Poisons Act, No. 244 of 1990; The Use of Poisonous Substances Act, No. 247 of 1964.
377 EMCA, § 94(b)
378 EMCA, § 94(c)
379 EMCA, § 94(g)
380 EMCA, § 87(4)
381 The Fertilizers and Animal Foodstuffs Act, Chapter 345 of the Laws of Kenya, §§ 8, 19(1). The said Act covers
standards of composition, efficacy, fineness and purity of animal foodstuffs; the prohibition of certain substances and
the limitation of percentages of certain substances in the foodstuffs; records and returns to be kept and furnished by
manufacturers and sellers of the animal foodstuffs; as well as requirements as to the proper storage of fertilizers and
animal foodstuffs.
382 The Fertilizers and Animal Foodstuffs Act, § 5(1).
383 EMCA (Waste Management) Regulations, 2006, Kenya Gazette Supplement No. 69, Legislative Supplement No. 37,
Legal Notice No. 121.

384 EMCA, § Section 87 (2)
385 The Seeds and Plant Varieties Act, Chapter 326 of the Laws of Kenya.
386 The Plant Protection Act, Chapter 324 of the Laws of Kenya.
387 Kenya Ministry of Trade and Industry, Handbook on Importing and Exporting, 34.
388 KEPHIS is a regulatory agency for quality control of agricultural input and produce whose mandate includes testing
certification, quarantine control of seeds (including imported seeds) and planting materials and grading. The Minister for
the time being in charge of Agriculture may make rules for the purpose of preventing and controlling the spread of pests
or diseases via seed importation through quarantine after inspection. The Minister may order the quarantine of shipment
vessels and seeds and order the disinfection, treatment, destruction and disposal of any unhealthy plant, or of any plant
appearing to be infected with any pest or disease, or of anything else, whether of a nature similar to a plant or not, likely
to infect any plant with any pest or disease. The Plant Protection Act, § 3.
390 The Trade Licensing Act, Chapter 497 of the Laws of Kenya, § 5(1).
391 A Trade Licensing Officer is appointed under the provisions of the Trade Licensing Act, Chapter 497 of the Laws of
Kenya, § 6.
392 KEPHIS was established in 1996 as a regulatory agency for quality control of agricultural input and produce. Its
mandate includes testing certification, quarantine control of seeds and planting materials, grading. The Seeds and Plants
Varieties Act, Chapter 326 of the Laws of Kenya, § 3c.
394 The following seeds make up Schedule 1 seeds: Wheat, Barley, Oats, Beans, Millet (finger), Sorghum, Rice, Sunflower,
Sugarcane (for the production of white sugar). The Agriculture Act, Chapter 318 of the Laws of Kenya.
395 The Seeds and Plant Varieties Act, Regulation number 5.
396 The Customs and Excise Act, Chapter 472 (2) Laws of Kenya, § 12.
397 The Customs and Excise Act, §§ 6, 7, 12.
398 The Value Added Tax Act, Chapter 476 Laws of Kenya at the Second Schedule.
399 The Interpretations and General Provisions Act, Chapter 2 of the Laws of Kenya, § 2.
400 The Governments Land Act, Chapter 280 of the Laws of Kenya; the Registration of Titles Act, Chapter 281 of the
Laws of Kenya; the Land Titles Act, Chapter 282 of the Laws of Kenya; the Land Consolidation Act Chapter 283 of the
Laws of Kenya; the Land Adjudication Act, Chapter 284 of the Laws of Kenya; the Registration of Documents Act,
Chapter 285 of the Laws of Kenya; the Land (Group Representatives) Act, Chapter 287 of the Laws of Kenya; the Trust
Land Act, Chapter 288 of the Laws of Kenya; the Trusts of Land Act, Chapter 290 of the Laws of Kenya; the Equitable
Mortgages Act, Chapter 291 of the Laws of Kenya; the Wayleaves Act, Chapter 292 of the Laws of Kenya; the Distress
for Rent Act, Chapter 293 of the Laws of Kenya; the Trespass Act, Chapter 294 of the Laws of Kenya; the Land
Acquisition Act, Chapter 295 of the Laws of Kenya; the Rent Restriction Act, Chapter 296 of the Laws of Kenya; the
Survey Act, Chapter 299 of the Laws of Kenya; the Registered Land Act, Chapter 300 of the Laws of Kenya; the
17 May 2008 133

Landlord and Tenant (Shops, Hotels and Catering Establishments)Act, Chapter 301 of the Laws of Kenya; the Land
Control Act, Chapter 302 of the Laws of Kenya; the Mortgages (Special Provisions) Act, Chapter 304 of the Laws of
Kenya.
401 The Registration of Titles Act, Chapter 281 of the Laws of Kenya, provides for the transfer of land by the registration
of titles and defines land to include: “land and benefits to arise out of land or things embedded or rooted in the earth, or
attached to what is so embedded for the permanent beneficial enjoyment of that to which it is so attached, or
permanently fastened to anything so embedded, rooted or attached, or any estate or interest therein, together with all
paths, passages, ways, waters, watercourses, liberties, privileges, easements, plantations and gardens thereon or
thereunder lying or being, unless specifically excepted.” The Land Consolidation Act, Chapter 283 of the Laws of
Kenya, which “provides for the ascertainment of rights and interests in, and for the consolidation of, land in the special
areas; for the registration of title to, and of transactions and devolutions affecting, such land and other land in the special
areas; and for purposes connected therewith and incidental thereto,” defines land to include “land covered with water,
any estate or interest in land other than a charge, all things growing thereon and buildings and other things permanently
affixed thereto.” The Land Adjudication Act, Chapter 284 of the Laws of Kenya, which provides for the ascertainment
and recording of rights and interests in Trust land, and for purposes connected therewith and purposes incidental
thereto, defines land to include “things growing on land and buildings and other things permanently affixed to land.”
The Land Acquisition Act, Chapter 295 of the Laws of Kenya, which makes provision for the compulsory acquisition of
land for the public benefit, defines land to include “all land, whether covered with water or not, and things attached to
the land, or permanently fastened to anything attached to the land, and (where the meaning may be inferred) any estate,
term, easement, right or interest in or arising out of land.” The Land Control Act, Chapter 302 of the Laws of Kenya,
which provides for controlling transactions in agricultural land (generally land that is not within a municipality or a
township; or an area which was once a township or a trading centre under repealed laws) defines land to include “an
estate, interest or right in land.”
402 Freeholds are divided into: fee simple, fee tail, life interest and estate par autre vie. A person who has a freehold
right, has absolute ownership (indefeasible legal title) over land from the government of Kenya, and upon his demise or
infirmity, the legal title over the land would by law pass on to his rightful heir(s) and if non are in existence, it would
revert back to the government.
403 Leaseholds can be categorized into the following: for a specific period, periodic tenancies, tenancies at sufferance and
tenancies at will. A person who enjoys a leasehold title over any property possesses only conditional rights of ownership
over the said property and the lease can either be determined by the effluxion of time or by some other condition
precedent set within the lease agreement itself by the parties to the lease.
404 Servitudes are rights in the soil of another. For example, easements or profits a prendre. They are referred to as
“rights in alieno solo.”

405 Business means a concern carrying on the occupation of; a regulated trade; importing or exporting goods;
commission agent or indent agent; manufacturer's representatives; produce dealer or produce broker; business broker or
management consultant; insurance agent; estate agent; or any other occupation, whether similar to any of the foregoing
or not, which the Minister may, declare to be an occupation for the purposes of definition. The Trade Licensing Act, §
2.
406 The Trade Licensing Act, § 5.
407 General business areas include most major urban areas in Kenya.
410 The Investment Promotion Act, No. 6 of 2004. Investment means the contribution of local or foreign capital by an
investor, including the creation or acquisition of business assets by or for a business enterprise and includes the
expansion, restructuring, improvement or rehabilitation of a business enterprise.
411 An investment certificate can be transferred by the holder to another person(s), but only with approval from Kenya
Investment Authority. Equally, the certificate can be amended or revoked where need be.
412 The KIA is continued under § 14 of the new Investment Promotion Act (from the repealed Investment Promotion
Centre Act) and has been issued with the mandate of approving applications for and issuing investment certificates to
investors.
413 The Investment Promotion Act, §§ 12, 13.
414 Kenya Revenue Authority, Petroleum Monitoring Unit, as of 18 December 2007.
415 EMCA, § 57(1).
416 EMCA, § 57(2)(b). Similarly under § 57(2)(c)-(d) the Finance Minister may recommend for tax disincentives to deter
bad environmental behavior that leads to depletion of environmental resources or that cause pollution; or user fees to
ensure that those who use environmental resources pay proper value for the utilization of such resources.
17 May 2008 134

417 Jack Opondo, Assistant Production Manager, Mumias Sugar, personal communication.
418 California Air Resources Board, Health Effects of Diesel Exhaust Particulate Matter,
<http://www.arb.ca.gov/research/diesel/dpm_draft_3-01-06.pdf> (18 November 2007).
419 Some tests have shown that NOx levels vary with type of engine. T. Beer et al., CSIRO Atmospheric Research, Life-
cycle Emissions Analysis of Alternative Fuels for Heavy Vehicles (2000).

420 J. Sheehan et al., U.S. Department of Energy, National Renewable Energy Laboratory, Life-cycle Inventory of Biodiesel and
Petroleum Diesel for Use in an Urban Bus, NREL/SR-580-24089 (1998) 284,

<http://www.ott.doe.gov/biofuels/lifecycle_pdf.html> (20 November 2007).
421 Jack Opondo, Assistant Production Manager, Mumias Sugar, personal communication.
422 Anton Van Tonder, Plant Director, Spectre International, personal communication.
423 Xiulin Zhang et al., University of Idaho, Biodegradability of Biodiesel in the Aquatic Environment, 6,
<http://www.canadianbioenergy.com/resources/Degradability_of_biodiesel_in_marine_environment.pdf> (17 March

2008).
424 P. Calais, “The Role Of Liquid Biofuels As Petroleum Replacements In Western Australia,” ENVIRONMENTAL
SCIENCE, Murdoch University (1998).

425 Sheehan, 284; “Clean Burn: Biodiesel at the Bowser,” A USTRALIAN E NERGY NEWS, March, 2002.
426 U.S. Environmental Protection Agency, EPA Fact Sheet EPA420-F-00-035.
427 U.S. Environmental Protection Agency, A Comprehensive Analysis of Biodiesel Impacts on Exhaust Emissions (October
2002).
428 Jose Roberto Moreira, University of São Paulo, National Reference Center on Biomass, Institute of
Electrotechnology and Energy, Water Use and Impacts Due Ethanol Production in Brazil,
<http://www.iwmi.cgiar.org/EWMA/files/papers/Jose_Moreira.pdf> (20 November 2007).
429 Anton Van Tonder, Plant Director, Spectre International, personal communication.
430 A. Spataru, and C. Romig, Emissions and Engine Performance from Blends of Soya and Canola Methyl Esters With ARB #2
Diesel in a DCC 6V92TA MUI Engine, SAE Technical Paper; 952388 (Warrendale, Penn.: SAE International, 2002) 179-
188.
432 Sheehan.
433 Jason Hill et al., “Environmental, Economic, and Energetic Costs and Benefits of Biodiesel and Ethanol Biofuels,”
PROCEEDINGS OF THE NATIONAL A CADEMY OF SCIENCES, vol. 103, no. 30 (2006); Alexander E. Farrell et al., “Ethanol
Can Contribute to Energy and Environmental Goals,” SCIENCE (27 January 2006) 506-08 (corrected 23 June 2006).
434 Timothy Searchinger et al., “Use of U.S. Croplands for Biofuels Increases Greenhouse Gases Through Emissions
from Land Use Change,” SCIENCE (7 February 2008) 1151861v1.

435 Searchinger.
436 Searchinger.
437 Searchinger.
438 Minnesota Department of Agriculture, Energy Balance/Life Cycle Inventory for Ethanol, Biodiesel and Petroleum Fuels,
<http://www.mda.state.mn.us/renewable/renewablefuels/balance.htm> (20 February 2008).

439 R. Hammerschlag, Ethanol: Energy Well Spent: A Survey of Studies Published Since 1990 (Washington D.C.: Natural
Resources Defense Council, 2006).

442 United Kingdom, House of Commons-Environmental Audit Committee (2008), “Are Biofuels Sustainable? First
Report of Session 2007-08,”

<http://www.publications.parliament.uk/pa/cm200708/cmselect/cmenvaud/76/7602.htm> (20 February 2008).
443 A.R. Butler, “Why is oil palm replacing tropical forest?,” MUNGABAY NEWS, 2006.
444 Global Compendium of Weeds, “Hawaiian Ecosystems at Risk Project,” <http://www.hear.org/gcw> 15 March
2008).
445 Invasive Species Council, The Weedy Truth About Biofuels (October 2007),
<http://www.invasives.org.au/downloads/isc_weedybiofuels_summary2_oct07.pdf> (15 March 2008).

446 Beatrice Debut, “Kenya’s Imported Dream Tree Becomes a Nightmare,” MAIL & G UARDIAN O NLINE, 16 April
2006, <http://www.mg.co.za/articlePage.aspx?articleid=269355&area=/breaking_news/breaking_news__africa> (15

March 2008).
447 Kenya Ministry of Agriculture, Economic Review of Agriculture: 2007, 3.
17 May 2008 135

448 Lester Brown, Earth Policy Institute, “Distillery Demand for Grain to Fuel Cars Vastly Understated: World May be
Facing Highest Grain Prices in History,” 4 January 2007, <http://www.earth-policy.org/Updates/2007/Update63.htm>
(20 November 2007).
449 Compiled by Earth Policy Institute from U.S. Department of Agriculture, Production, Supply & Distribution, electronic
database, <http://www.earth-policy.org/Updates/2006/Update55_data.htm> 20 November 2007).

450 Lucy Sherriff, “Biofuels Trigger Tortilla Price Bubble,” THE R EGISTER, 1 February 2007,
<http://www.theregister.co.uk/2007/02/01/tortilla_bubble> (21 November 2007).

451 “UN Expert Calls Turning Food Crops into Fuel ‘A Crime Against Humanity,’” I NTERNATIONAL HERALD TRIBUNE,
26 October 2007, <http://www.iht.com/articles/ap/2007/10/26/news/UN-GEN-UN-Food-vs-Biofuel.php> (21

November 2007).
452 Ethanol and biodiesel prices compiled by Earth Policy Institute from F.O. Licht data, cited in Suzanne Hunt and
Peter Stair, “Biofuels Hit a Gusher,” Vital Signs 2006-2007 (Washington, D.C.: Worldwatch Institute, 2006), 40-41; F.O.
Licht, World Ethanol and Biofuels Report, 395; Renewable Fuels Association, “Statistics,”
<http://www.ethanolrfa.org/industry/statistics> (25 November 2007); Planet Ark, “World Biodiesel Output Growth
May Slow - Licht,” 29 March 2007, <http://www.planetark.com/dailynewsstory.cfm/newsid/41147/story.htm>; F.O.
Licht, Ethanol Production Costs, 75; F.O. Licht, World Biodiesel Markets: The Outlook to 2010, iv. Commodity prices from
U.S. Department of Agriculture, “Oil Crops Outlook, Table 9,”
<http://usda.mannlib.cornell.edu/usda/current/OCS/OCS-11-13-2007.pdf> (14 November 2007); U.S. Department
of Agriculture, Economic Research Service, “Feedgrains Database,” <http://www.ers.usda.gov/data/feedgrains> (14
November 2007).
453 Giles Clark, “FAO Regrets ‘Crime Against Humanity’ Label on Biofuels,” BIOFUEL REVIEW, 1 November 2007,
<http://www.biofuelreview.com/content/view/1302> (20 November 2007).

454 Organization for Cooperation and Development and U.N. FAO, Agricultural Outlook: 2007-2017,
<http://www.oecd.org/dataoecd/6/10/38893266.pdf> (20 November 2007).

455 C. Ford Runge and Benjamin Senauer, “How Biofuels Could Starve the Poor,” FOREIGN AFFAIRS, May/June 2007,
<http://www.foreignaffairs.org/20070501faessay86305/c-ford-runge-benjamin-senauer/how-biofuels-could-starve-the-
poor.html> (20 November 2007).
456 OECD and U.N. FAO, Agricultural Outlook: 2007-2017
457 Transcript of Remarks by Acting Agriculture Secretary Chuck Conner to the Renewable Fuels Association, 2 October
2007,
<http://www.usda.gov/wps/portal/%21ut/p/_s.7_0_A/7_0_1OB?contentidonly=true&contentid=2007/10/0277.xm
l> (21 November 2007).
458 U.S. Department of Agriculture, Foreign Agricultural Service, “FAS Agricultural Export Commodity Aggregations,”
<http://www.fas.usda.gov> (13 December 2007) (reporting that corn exports from the U.S. increased from 45,461,830
57,343,380 tonnes from 2005 to 2006).
459 “Inflation in Brazil Decreased More Than Expected on Lower Ethanol, Food Prices,” BIOPACT, 21 September 2007,
<http://biopact.com/2007/09/inflation-in-brazil-decreased-more-than.html> (13 December 2007).

460 Ariel David, “UN Skeptical of Biofuel Price Hikes,” ASSOCIATED PRESS, 13 September 2007, <http://www.mail-
archive.com/[email protected]/msg70993.html> (25 November 2007).

461 IFPRI, Women: Still the Key to Food and Nutrition Security, <http://www.ifpri.org/pubs/ib/ib33.pdf> (18 March 2008).
462 Kenya Sugar Board, Year Book of Sugar Statistics 2006, Table 5 and vii.
463 Prices from Kenya Sugar Board, Year Book of Statistics 2006, Tables L and M; Anton Van Tonder, Plant Manager,
Spectre International, personal communication, 4 December 2007; Jack Opondo, Assistant Production Manager,
Mumias Sugar Company Limited, personal communication. 5 December 2007.
464 John Nyambock, Managing Director, Muhoroni Sugar, personal communication, 5 December 2007.
465 Uwe R. Fritsch et al., German Ministry for Cooperation and Development, “Criteria for Assessing Environmental,
Social, and Economic Aspects of Biofuels in Developing Countries” (February 2005).

466 U.N. Energy, Sustainable Bioenergy: A Framework for Decisionmakers, 2.
467 Energy Independence & Security Act of 2007, H.R. 7, Public Law No. 110-140 (2007), amending 42 U.S.C.
7545(o)(2).
468 Energy Independence & Security Act of 2007, H.R. 7, Public Law No. 110-140 (2007), amending 42 U.S.C.
7545(o)(1).
469 James Kanter, “Europe May Ban Imports of Some Biofuels,” NEW YORK TIMES, 15 January 2008.
470 “Biofuels Must be 35% Cleaner Than Fossil Fuels, says European Commission,” BIOENERGY BUSINESS, 23 January
2008, <http://www.bioenergy-business.com/index.cfm?section=lead&action=view&id=11015> (25 January 2008).

17 May 2008 136

473 R.U. Fritsche et al., Sustainability Standards for Bioenergy, (Frankfurt: WWF, 2006).
474 World Wildlife Fund, “Oil Palm and Soy: The Expanding Threats to Forests,”
<http://www.panda.org/about_wwf/where_we_work/latin_america_and_caribbean/country/brazil/news/index.cfm?
uNewsID=16411> (17 November 2007).
475 R.U. Fritsche et al., Sustainability Standards for Bioenergy.
476 Friends of the Earth, The Oil for Ape Scandal (2005), <http://www.foe.co.uk/resource/reports/oil_for_ape_full.pdf>
(17 November 2007).

477 Friends of the Earth, The Oil for Ape Scandal.
478 Roundtable on Sustainable Palm Oil, <http://www.rspo.org>.
479 Tewari, 25.
480 D. Tsai, Enhancing Food Security for Sustenance Farmers: Economic Reform and Biofuels Production in Tanzania, (2007),
<www.worldfoodprize.org/assets/youthinstitute/07proceedings/upper_arlington_tsai.pdf> (25 January 2008).

481 Rachel Slater and Steve Wiggins, “Responding to HIV/AIDS in Agriculture and Related Activities,” N ATURAL
RESOURCE PERSPECTIVES, no. 98 (March 2005), <http://www.odi.org.uk/publications/nrp/98.pdf> (5 February 2008).

482 National AIDS Control Council, Nairobi, Kenya.
483 U.N. FAO, “Mitigating the Impacts of HIV/AIDS on Food Security and Rural Poverty” (January 2003),
<http://www.odi.org.uk/Food-Security-Forum/docs/DECmeetingFINAL.pdf> (18 March 2008).

484 According to the Kenya Sugar Board, Muhoroni, Chemelil, South Nyanza and Soin had a combined loss of Ksh 357
million for the year ending 2006. Kenya Sugar Board, Yearbook of Statistics: 2007, Table 1. These same companies
crushed a total of 654,045 tons of sugarcane that year.
485 It is estimated that there are over 160,000 mature croton trees on farms in the Embu area alone. The seeds from
about 300,000 mature trees would be needed for 2 million liters of biodiesel. Thijssen.
486 ABD-DANIDA.
487 George Wachira, Managing Director, Petroleum Institute of East Africa, personal communication, 14 November
2007.
17 May 2008 137

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A ROADMAP FOR BIOFUELS IN KENYA

GESELLSCHAFT FÜR TECHNISCHE ZUSAMMENARBEIT (GERMAN TECHNICAL

! The Kenyan-German Private Sector Development in Agriculture (PSDA) Programme in

Permanent Secretary Permanent Secretary Country Director

Nairobi, 29 April 2008

3.4.6 South Africa ................................................................................................................................................51

6.5.2 Biofuels & Food in Kenya ........................................................................................................................90

TABLE 1: C URRENT & PLANNED ETHANOL PRODUCTION CAPACITY..................................................................42

17 May 2008 iii

FIGURE 1: ETHANOL PRODUCTION PROCESS ...........................................................................................................15

MAP 1: CASSAVA S UITABILITY WITH FOOD & CASH C ROPS ...................................................................................17

PHOTO 1: SPECTRE INTERNATIONAL’S ETHANOL PLANT IN KISUMU..................................................................13

PHOTO 19: JATROPHA PLANTATION IN SHIMBA HILLS............................................................................................34

B10 – A blend of 10% biodiesel and 90% petrol diesel

1. INTRODUCTION & EXECUTIVE SUMMARY

Overview of Ethanol & Biodiesel

Economic Analysis of Biofuels in Kenya

Regulatory & Fiscal Analysis

Environmental and Social Impact Assessment

Roadmap & Recommendations

o Improving the transport infrastructure;

discussed above should be integrated, thus eliminating unnecessary and onerous

2. OVERVIEW OF ETHANOL & BIODIESEL

Ethanol was first used as an automotive fuel

For the past thirty years, ethanol has been used

2.1.1 Performance, Efficiency & Quality

2.1.2 Ethanol Production Process & Technology

FIGURE 1: ETHANOL PRODUCTION PROCESS

2.1.3 Ethanol Feedstocks

Temp Rainfall Maturity Time Rainfed Yield Ethanol Yield

Photo 3: Cassava plantation.23

Scientific Name: Saccharum officinarum. Local Names: Miwa.

Temp Rainfall Maturity Time Rainfed Yield Ethanol Yield

Photo 5: Sugarcane plantation.37

2.1.3.3 Sweet Sorghum

Scientific Name: Sorghum bicolor. Local Names: Mtama.

Temp Rainfall Maturity Time Rainfed Yield Ethanol Yield

Photo 7: Sweet sorghum plantation.51

2.1.4 Second-Generation Ethanol Production

Sometimes referred to as second-generation biofuels, ethanol

2.2.1 Performance, Efficiency & Quality

Globally recognized standards for biodiesel

FIGURE 2: BIODIESEL PRODUCTION PROCESS

2.2.2 Biodiesel Production Process & Technology

2.2.3 Biodiesel Feedstocks

Temp Rainfall Maturity Time Biodiesel Yield

Photo 11: Castor plants fruiting.84

Scientific Name: Cocos nucifera. Local Name: Mnazi.

Temp Rainfall Maturity Time Biodiesel Yield

Photo 13: Coconut trees growing near the beach.98

Map 5: Coconut Suitability with Food & Cash Crops

Agroforestry Potential: Agroforestry systems involving coconut are extremely common

Temp Rainfall Maturity Time Biodiesel Yield

Photo 15: Cotton beginning to flower.111

Map 6: Cotton Suitability with Food & Cash Crops

Temp Rainfall Maturity Time Biodiesel Yield

Photo 17: Croton tree in the Kerio Valley.124

Temp Rainfall Maturity Time Biodiesel Yield