Race on Biofuels

More than two million hectares. That is the area of Western-funded plantations for energy crops in Africa. Investors in biofuels have a rendezvous from the 12th until the 15th of April in Johannesburg for the annual African Biofuels conference. They are discussing their business prospects in Africa, the future paradise for the green gold. Will the Africans also profit from it?
This year a new climate agreement needs to be made to replace the expiring Kyoto Protocol. Both small investors and oil and agro-giants believe that energy crops will become more important in that new agreement. They slide with contacts and capital on the African chessboard, hoping for big profits. However, the energy agriculture today is already frequently accused of heralding a new colonization of Africa.

The European Union wants to replace ten percent of its oil consumption by “green” fuels by 2020. The United States aim for fifteen percent by 2017. To realise these ambitions both economic superpowers will have to import a significant share of these biofuels. The International Energy Agency (IEA) estimates that twenty years from now, the rising demand for biofuels could take around 53 million hectares of farmland worldwide.

Three Belgian players

According to the Copernicus Institute at the University of Utrecht, Africa has all the potential to become the largest supplier of agricultural energy. The continent has with 807 million hectares the biggest share in fertile land of the planet ánd the work forces are cheap. To stimulate energy agriculture in Africa, the EU as well as the U.S. decreased or cancelled the import duties on biofuels from African countries - they are treated like other agricultural products. The European Commission recently channelled 200 million euro to finance renewable energy projects in Africa.
The biggest part of the investments are made in the field of biofuels. The key question is whether this energy-opportunity for the rich countries will also constitute an opportunity for development for local populations.

Nowadays there are at least seventy biofuel projects in 28 African countries, funded by about forty American and European investors. Together these projects account for more than two million hectares. On the chessboard of the “Green Future”, these Western investors play against the conquerors from Brazil, Saudi Arabia and Asian emerging countries. The Chinese projects in the Congo and Zambia would be able to cover 4.5 million hectares. In this race Belgium is represented by three major players: Felisa (a pioneer in the cultivation of jatropha in Tanzania - jatropha is a shrub that produces inedible but oil-rich fruit, ideal for the production of biodiesel), Alcogroup (first European importer of bio-ethanol, present in South Africa and Mauritius) and Socfinal (exploiting palm oil plantations in Cameroon). Soca Palm, a branch of Socfinal, showed interest in the market of biodiesel in 2007 on a conference on biofuels in the Burkinabe capital Ouagadougou. In the meantime it has already done some local tests.

To proceed from the experimental stage to the commercialization stage, companies need to expand the agricultural area intensively. The company Felisa in Tanzania, has cultivated five thousand hectares for now. But eventually it wants to produce forty million liters of biodiesel per year. According to the Kenya-based NGO African Biodiversity Network (ABN) Felisa has an extra 60.000 hectares in mind. ABN fears that the expropriation of the collective farmland will be attended with the displacement of local farmers.

Felisa is not the only one. The British companies Sun Biofuels and ESV Biofuels, the Dutch BioShape and Diligent, the American Wilma, the Swedish SEKAB, the Germans from Prokon … together some forty investors cultivate hundreds of thousands of hectares of palm oil, jatropha (biodiesel) and sugar cane (for bio-ethanol). This leads to increasing tensions. In October 2009 the Kenyan newspaper The East African reported that more than 5,000 rice farmers were to be expelled from their land. Faced with widespread opposition, the government decided a few days later to freeze all investments in the project on energy crops and to temporarily stop assigning land to new foreign investors.

Jatropha as a solution

The situation in Tanzania perfectly illustrates the dilemma with which many African countries see themselves faced. On the one hand they want to take advantage of the promises that energy crops show, on the other hand they want to defend the interests of local communities. The new branch could, at best, provide a lower oil bill, and a much-needed export industry could develop itself around the biofuels. “Biofuels can provide an agricultural renaissance, revitalize cultivation of the soil and improve the means to survive in rural areas,” confirms Lorenzo Cotula of the International Institute for the Environment and Development (IIED) in London. The experience in some West African countries confirms those opportunities. In Mali for example, small, family-run jatropha plantations are used to build a rural electricity network. Cotula: “Whether the introduction of energy crops is positive or negative mainly depends on the legal security of the existing landed ownership. The rapid spread of commercial production of energy crops may result in – and it already does – the dislocation of the poorest people from the land on which they depend.”

This problem has already occurred in Mozambique, where the British company CAMEC / BioenergyAfrica runs a large bioethanol project of 30,000 hectares under the name Procana. This project has led to the expulsion of more than a thousand families, who are still fighting to get an indemnification. In Ghana the Norwegian Biofuel Africa even tried using the traditional system of collective land ownership to lay hands on an area of 38,000 hectares. “The company claimed the legal ownership of the area after having persuaded an illiterate local chief to put his fingerprint under a waiver of the territory,” says Bakari Nyari, Vice President of the Ghanaian NGO Rains. The legal battle ensuing its demarche forced the Norwegian company to eventually abandon its plan.

This setback didn’t keep Biofuel Africa, which still owns 6600 acres, from starting the first commercial jatropha production unit in West Africa in October 2009. Jatropha, as investors swear, easily grows on marginal, less fertile and arid land. This way the industry appears to respond to the criticism with which it had to deal under the acute food crisis in 2008. Back then, the World Bank estimated that the bioenergy industry was responsible for 75 percent increase of the food price. The increasing demand for grains and for farmland for food agriculture and energy crops makes the prices rise drastically. The industry claims that this problem does not occur with jatropha. A quarter of all “marginal lands” in the world is situated in Africa, and therefore it is possible for the biodiesel industry to grow gradually, without entering into competition with livestock farming or agriculture.

However, the large scale cultivation of jatropha is not without dangers. To increase the profit of the investments some investors don’t recoil from annexing the more fertile land as well. The NGO Friends of the Earth wrote in a report in May 2009: “In Swaziland NGOs identified several cases of farmers who choose to cultivate jatropha under contract with the British company D1 Oils and BP, rather than edible crops.” And the Ethiopian NGO Melca Mahiber argues that, until now “almost all energy crops are cultivated on fertile ground or on former forested area. A British company appears to have interchanged its plantation on marginal lands for a plantation on fertile land, where it could also benefit from favorable rainfall patterns. Moreover, says the International Institute for the Environment and Development (IIED), many of the marginal lands which are available to investors, are in fact vital resources for the survival of groups of nomads, shepherds or displaced persons who collect wood or wild fruit on those areas.

The key question is whether this energy opportunity for rich countries will also generate a development opportunity for local populations.
Uncontrollable expansion

To ensure profitability of their investments, the agro-energy lobby counts on a revision of the Kyoto protocol which expires in 2012. The Copenhagen Climate Conference was a stumbling step in the long process that eventually has to lead to a new agreement on the reduction of greenhouse gas emissions. The main building site in this process is the modification of the Clean Development Mechanisms (CDMs). Through this mechanism companies from developed countries acquire carbon credits when they invest in projects in developing countries that reduce CO2 emissions, such as forest planting. They can then sell these credits to companies that need them to compensate the pollution they cause.

Currently some proposals would want to extend the definition of the plantation of forest to all types of plantations, including energy crops. The consequence would be that a controversial project such as that of the Italian energy company ENI (through which 70,000 hectares of forest would be replaced by oil palms) would qualify as CDM. If the modification is heading for that direction, the investors can make profits not only on the export of biofuels, but also on the massive sale of carbon credits in the U.S. and in Europe. The Canadian company Carbon2Green has recently submitted an application for its jatropha project in the Democratic Republic of Congo to be recognized for obtaining carbon credits. If permitted, this project will be the first of its kind that brings in money on the grounds of CDMs.

The system of carbon credit trading is likely to cause an uncontrollable expansion of energy crops. “The available funds will mainly go towards industrial monocultures, while small producers have very little chances to as well take benefit from the system,” says a September 2009 publication of the British Association of Biofuel Watch. The IIED goes even further: the more profitable energy crop trade becomes, the more investment in people, resources and land there will be in this sector. At some point the question on how much land and how many farmers still are available for food production will be put forward. And thus the fear that energy crops will have a negative impact on food security for Africans shows up with renewed urgency.
Is it possible to simultaneously fight hunger, with nearly 265 million African victims, ánd global warming, ánd in one go also incite the economies of the richest countries? And if a choice has to be made, who will determine the choice and in whose favour this choice will turn out? If the conferences at the end of 2009 are an omen, then it doesn’t look good. The superpowers didn’t consider it to be necessary to travel to Rome and attend the World Food Summit in November. They did however come to Copenhagen in December to discuss the “green” trading of carbon credits.

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