Mozambique's Petromoc seeks to invest $408 million in biofuels

Mozambican oil company Petróleos de Moçambique (Petromoc), together with its partners, is working to raise US$408 million to finance a project for production of biofuels which will replace the country's total petro-diesel consumption. Claudio James, one of the Petromoc engineers, says the project, to be implemented in three phases, is set to create about 800 jobs and will substantially reduce the country's fuel bill.

Oil prices increased three-fold over the past years, with disastrous consequences for developing countries. Some poor country governments are now forced to spend twice as much on importing oil products than on health. Increased energy prices affect all sectors of the economy and drive inflation, especially in energy intensive economies like those in the South. Biofuels can mitigate these negative effects.

According to James, the project has been designed already, and Petromoc and its partners are raising funds for its implementation, which implies planting 45,000 hectares of jatropha. The energy plantation will yield about 500,000 tonnes of raw material to produce 226 million litres of biodiesel a year.

As partners, Petromoc is counting on Brazil's INM International, Sonipal Ltd, and Aruangua Agro-Industrial Lda. The engineer estimates that within 36 to 48 months, Mozambique will be able to produce enough biodiesel to supply the entire country.

Mozambique is seen by analysts as one of the African countries that contribute considerably to the continent's large biofuel production potential. Researchers affiliated with the International Energy Agency estimate that Mozambique can produce around 7 Exajoules of biofuels sustainably (earlier post; map, click to enlarge). The country currently consumes around 590,000 tonnes of oil products per year, the bulk being diesel (IEA data). This equates to around 0.18EJ. Achieving full energy independence is well within reach, with capacity to spare to supply international markets.

When it comes to the availability of land, the country currently uses around 4.3 million hectares out of a total of 63.5 million hectares of potential arable land, or 6.6 per cent (FAO). Moreover, some 41 million hectares of poor quality land are available for the production of energy crops that require few inputs and are not suitable for food production (earlier post):
energy :: sustainability :: biodiesel :: biomass :: bioenergy :: biofuels :: jatropha :: coconut :: energy independence :: Mozambique ::

Meanwhile, Petromoc has begun to implement a smaller biodiesel project worth US$ 4 million, of which the first $600,000 have been invested. This pilot project, implemented by Energias Alternativas Renováveis, Lda (ECOMOZ), a subsidiary of Petromoc, relies on coconut oil as a feedstock, but the company is considering other oil crops. Capacity is 40 million liters per year. The plant is located in the Inhambane Province.

Another local company has begun planting palm trees, but because it takes about seven years before the plants reach full maturity, jatropha is thought of as the quickest way out because it starts yielding from year three onwards, James added.

Mozambique now has an installed capacity to produce 80,000 litres of biodiesel per day. James said Petromoc is hoping the government will grant incentives for the production of biodiesel. Petromoc counts on initiating the establishment of a 3000 hectare jatropha immediately and a study for the full swing of the project is to be finalised soon.

A host of other companies are investing in Mozambique's biofuel potential too. Canada's Energem recently acquired a jatropha biodiesel project based on an initial 1000 hectares; it will begin planting a further 5000 hectares, and will invest in an additional 60,000 hectares over the coming years (earlier post). Chinese, Italian, Portuguese and Brazilian companies are active in the sector as well (more here).

Most recently, the government of India and Mozambique discussed the potential of the biofuel sector to alleviate poverty in the country (previous post).

Map credit: Batidzirai, B., A.P.C. Faaij, E.M.W. Smeets.

References:
Agencia de Informacao de Mocambique: Petromoc Seeks Funding to Produce Bio-Fuels - 29 August 2007

Petromoc: Inauguração da Unidade de Produção de Biodisel da ECOMOZ - August 22, 2007.

Salvador Namburete: Mozambique's Experience on Bio-fuels [*.pdf], Minister of Energy of the Republic of Mozambique, presentation at the International Conference on Biofuels, Brussels, July 5-6, 2007.

Batidzirai, B., A.P.C. Faaij, E.M.W. Smeets (2006), "Biomass and bioenergy supply from Mozambique" [*abstract / *.pdf], Energy for Sustainable Development, X(1),
Pp. 54-81

Faaij, A.P.C., "Emerging international biomass markets and the potential implications for rural development" [*.pdf], Development and Climate Project Workshop: Rural development, the roles of food, water and biomass; opportunities and challenges; Dakar, Senegal, 14-16 November 2005.

Biopact: Mozambique-India partnership: biofuels for poverty alleviation - July 03, 2007

Biopact: Energem acquires jatropha biodiesel project in Mozambique - August 02, 2007

Biopact: Journal "Energy for Sustainable Development" focuses on international bioenergy trade - November 05, 2006

Biopact: Lusophone world and China join forces to produce biofuels in Mozambique - May 19, 2007