Está en la página 1de 31

The Nigerian Fuel Ethanol Industry

A. O. Yusuf
Energy Commission of Nigeria
Plot 701C, Central Area, PMB 358, Garki, Abuja, Nigeria
Email:abdussalamyusuf@yahoo.com

Presentation at the International Conference on Biofuel Markets in Africa held in Cape Town,
South Africa, 30th November 1st December 2006
Outlines
1. Introduction
2. What are biofuels
3. The Nigerian Ethanol Programme
4. Nigeria Ethanol Fuel Market Scenario
5. Road Map to Bioethanol Industry in Nigeria
6. Achievements
7. Challenges
8. Incentives
9. Monitoring Process
10. Conclusion

A. O. Yusuf (2006)
1.0 Introduction

A. O. Yusuf (2006)
Fig.1: Maps of Nigeria and Africa
1.0 Introduction

Sugar factory
Sugarcane belt

Sugar factory
Sahel Savanna
Cassava belt
Woody Savanna

Guinea Savanna

Oil
Palm Low land Forest
belt
Rain Forest

Swamp Forest

A. O. Yusuf (2006)
1.0 Introduction
Population of 150 million persons (approx)

Land area of 923,768 km2.
Arable land constitute about 56%
Vegetation: ranging from sahel savanna in the extreme north,
to swamp forest in the coastal south
Most parts of Nigeria are suitable for biofuel crops
cassava, sugarcane, jatropher
Nigeria is a major world producer of Cassava (as food
crop)
Sugarcane production declined due to poor performance
of local sugar companies.

A. O. Yusuf (2006)
1.0 Introduction
Motor fuels consumption in 2005
9.5billion litres of PMS
2.4bilion litres of AGO.
Total local Refinery Installed Capacity 445000 bbls/day
Capacity utilization = 43.5% in 2005
PMS import in 2005 was 5.48million tonne for approx
US$3.2 billion

A. O. Yusuf (2006)
1.0 Introduction

Projected PMS and ethanol demand based energy

demand studies and 10% replacement plan

2005 2010 2015 2020 2025

PMS (billion litre) 9.5 12.92 19.41 23.60 28.22


Ethanol (billion 0 1.2 1.9 2.4 2.8
litre)

A. O. Yusuf (2006)
2. 1 What are Biofuel
Biofuels are fuels made from biological sources.
They include:
Ethanol from fermenting and distillation of starchy
cereals, grains and sugar crops

Biodiesel from converting oil bearing crops to


methyl esters to blend with conventional diesel
(jatropha, rapeseed )

Biogas from organic waste materials (animal


droppings, Biodegradable industrial and municipal
solid waste)

A. O. Yusuf (2006)
2. 1 What are Biofuels

Sugar -rich Oil Wet


Wood crops crops biomass

Gasification Extraction
Extraction
Gasification Fermentation
Fermentation AnaerobicFermentation
Anaerobic Fermentation

Esterification
Esterification
Ethanol
Methanol Biogas
Biodiesel

A. O. Yusuf (2006)
2.2 Why biofuels?
The factors driving the growing interest in
biofuels include:
Energy Security
Spiraling oil price
Depletion of oil reserves & Increasing cost of crude oil exploration
Need for diversified energy supply mix
Reduce vulnerability to international politics
Economy
Promotion of Industrial development and employment
Creation of integrated rural economy
Reduction in oil importation
Make available more crude for export
Fuel quality (better octane number)
Environment
Clean burning properties (low CO2 and GHGs)
Kyoto protocols and related obligations
Sustainability (renewable)
A. O. Yusuf (2006)
2.3 Ethanol Fuel

Ethanol is a renewable, cleaner burning,


supplimentary fuel which may be blended with
gasoline at 10% or more.

Common feedstock for ethanol production include


Sugarcane, Sweet sorghum, Sugar beet, Wheat, Rice,
Maize, Sorghum, Cassava, Sweet potatoes

The predominant technology for converting biomass


to ethanol is fermentation followed by distillation.

The Nigerian Ethanol programme aims at blending


ethanol with gasoline to form an E10 blend (10%
ethanol and 90% gasoline)
A. O. Yusuf (2006)
2.3 Ethanol Fuel (cntd)
The production of ethanol by fermentation involves
four major steps:
the growth, harvest and delivery of raw material to
an alcohol plant;

the pre-treatment or conversion of the raw material


to a substrate suitable for fermentation to ethanol;

fermentation of the substrate to alcohol, and


purification by distillation; and

treatment of the fermentation residue to reduce


pollution and to recover by-products.

A. O. Yusuf (2006)
3. The Nigerian Ethanol Programme
Objective
To produce fuel grade ethanol that will be blended
with petrol in proportion not exceeding 10% by
volume.
To contribute to the reduction of CO2 emission and
global warming (Kyoto commitment)
reduce domestic use of petrol,
Increase crude export
Improve automotive exhaust emission

A. O. Yusuf (2006)
3. The Nigerian Ethanol Programme
(cntd)
Key Elements of the Vision

which is expected to reduce the dependence on oil while creating a


viable commercial venture at a lower cost of production
A. O. Yusuf (2006)
3. The Nigerian Ethanol Programme
(cntd)
Target crops
Two potential crops have been identified
for the fuel ethanol initiative in Nigeria;
namely, sugarcane and cassava.
Cassava:
Nigeria is currently the leading producer of cassava in the world of
about 30 million tons annually,
Average yield is 15 tons/hectare which may be doubled with
improved variety .
Cassava is most perceived as a food crop in Nigeria and not as an
industrial crop, a perception that the bio-fuel program is expected
to radically change.
Sugarcane
worlds largest source of fermentation ethanol
one of the most photosynthetic efficient plants
Sugarcane production decline due to poor performance of local
sugar companies
the entire length and breadth of the rivers Niger and Benue are
potentials for sugar cane
A. O. Yusuf (2006)
3. The Nigerian Ethanol Programme
(cntd)

Cassava Plant
Cassava Tubers

A. O. Yusuf (2006)
3. The Nigerian Ethanol Programme
(cntd)

Sugar cane
A. O. Yusuf (2006)
3. The Nigerian Ethanol Programme
(cntd)

The Virtuous Cycle of Ethanol


A. O. Yusuf (2006)
3. The Nigerian Ethanol Programme
(cntd)
The project is a deliberate intervention policy to produce
biofuel (i.e it is driven by supply rather than demand)
The approach is to :

involve Government, corporate & financial institutions


Develop supporting Policy and Regulatory frameworks


Select land for the biofuel crops


Develop a business plan for piloting the biofuel plants


Engage the financial community


Jump start the industry with importation of biofuel from Brazil

to develop the market and the fuel supply infrastructure

A. O. Yusuf (2006)
3. The Nigerian Ethanol Programme
(cntd)
Among the expected benefits of the ethanol
programme are:
Expansion of rural economy
Reduction in ruralurban migration;
Energy supply security and better environment
Maximizing carbon credit opportunities
Direct and indirect employment in the new industry
Free up more crude for export
Boost state and local tax income
Provide a return on investment to farmers
Opportunity for direct foreign investment into the
local economy

A. O. Yusuf (2006)
3. The Nigerian Ethanol Programme
(cntd)
Key Stakeholders Envisaged Role/Responsibility

Facilitate policy implementation


Federal, Local and
State Government and Provide fiscal and political support
Agencies
Provide cassava and sugar cane input for ethanol production
Farmers and Farming Ensure smooth disruption free operations
Communities

Provide information on local agricultural practices, supply and


Research Institutes demand data
Provide technical support

Financial, Technical Provide funding and technical/managerial expertise


and Managerial
Partners

Ensure integrity of E10 distribution programme


Petroleum Marketers

Early acceptance of new ethanol/gasoline blend


General Public

A. O. Yusuf (2006)
4. Nigeria Ethanol Market Scenario
Consumption:
9.5 billion lit/annum gasoline in 2005
PMS demand will rise to 28 billion in 2025
Replacement by Bioethanol
0.95 billion lit /annum for gasoline @ 10 % blend
at current yield of 15 ton/ha, 20,000ha each of
cassava and sugarcane are required annually to
meet only 10% of this demand
There is opportunity for additional investment in
production ethanol crop, distillery and related
industry

A. O. Yusuf (2006)
4. Nigeria Ethanol Market Scenario
Targets
10-20,000 hectares of sugarcane plantations

5-10,000 hectares of cassava plantations

Ethanol production units with capacity of :

70-80 million liter annually from sugarcane


50-60 million liter annually from Cassava
Ethanol to be commercialized and blend with
gasoline up to 10%
Cogeneration plant to convert waste to electricity
Generation of $150million annually

A. O. Yusuf (2006)
5. Roadmap for the bioethanol Industry in
Nigeria

Implementation of an ethanol import program


Short Term
< 2 years Creation of a seeding domestic program (Farm and Ethanol Plant)
Creation of public awareness

Boost local production of Sugar cane and cassava by cultivating


60,000ha of Sugar cane/Cassava
Medium Term
< 5 years
Achieve production of 20% of fuel ethanol consumed in Nigeria

Target building of 2 to 4 distillery plants by end of 2007

Fostering development of a domestic industry with


Long Term internationally competitive export capability
>10 years

Both ethanol and bio-diesel have reached mature stage


A. O. Yusuf (2006)
6. Achievements
Projects
3 sugarcane projects with total ethanol capacity of 225million
liter/year and total cultivation area of 60000 hectare
Seeking partner for large biofuel project

Partnership
Signed MOUs with

Petrobras and COIMEX - technology and supply

International Institute for Tropical Agriculture - crop improvement

National Cereal Research Institute crop improvement
Exploring partnerships with technical institutes and state for
production of feedstock
Received grant from REEEP

A. O. Yusuf (2006)
6. Achievements
Policy
National Energy Policy in place with strong support
for biofuel,
Draft Renewable Energy Masterplan already in place
with target shares for biofuel
Specific biofuel policy and incentives under-way
Seeding initiative
Modifying infrastructure to receive ethanol import
Preparing for ethanol import contracts
Communicating with private and public sector
stakeholders

A. O. Yusuf (2006)
7. Challenges
Challenges include:
Improvement of farming practices to enhance quality
and yield
Enabling infrastructure to boost production (power,
roads, water)
Fiscal and regulatory incentives
Research and development (R&D) issues
Quality control issue such as water tolerance level
Distribution and retail facilities

A. O. Yusuf (2006)
7. Challenges (cntd)
Improvement of farming practices to enhance quality
and yield
Enabling infrastructure to boost production (power,
roads, water)
Fiscal and regulatory issues
Research and development (R&D) issues
Product quality and water tolerance
Distribution and retail facilities

A. O. Yusuf (2006)
8. Incentives being considered
The incentives being proposed to Government
include:
Tax incentives for agricultural and related industries
Land tenure system be eased by appropriate
legislation
Fiscal incentives for pioneer biofuel industries
Crop improvement to move yield of cassava from 15
tonne/hectre to 25-30 tonne/hectar
Involving the local communities through out-growers
scheme, in the production of the raw feed stock
Rather than displace the production of cassava for
food, it is envisaged that the project will create
new income for farmers

A. O. Yusuf (2006)
9. Monitoring Success

Success Indicators:
The factor that ensure successful

biofuel programme include:


government support and clear policy for ethanol production;
economic and financial incentives;
direct involvement of the private sector;
technological capability of the ethanol production sector;
co-operation between Government, sugarcane producers and
the automobile industry;
an adequate labour force;
government incentives (e.g., lower taxes and cheaper credit);
security of supply and nationalistic motivation;
consistent price policy that favours the alcohol-powered car

A. O. Yusuf (2006)
10. Conclusion
Ethanol industry has great potentials to contribute
to:
agriculture and agro-industrial sectors Potential for
export
Reduction in import of oil products(energy security &
foreign exchange saving)
Opportunities for international cooperation through
Agriculture & Technology & investments

A. O. Yusuf (2006)