Mozambique biofuel feasibility study completed as significant step in the country energy transition strategy under the ‘Pacote de medidas de Aceleração Económica’ – (PAE) – the country’s economic stimulus package.
The study (summary in Portuguese), developed in collaboration with the International Finance Corporation (IFC), aims to assess the viability of a biofuel industry in the country. It provides an in-depth analysis of Mozambique’s potential to produce bioethanol and biodiesel as part of the government’s broader strategy to reduce reliance on imported fossil fuels and promote renewable energy sources.
Revisiting Biofuel Potential
Mozambique’s efforts to establish a biofuel industry date back to the early 2000s. Previous initiatives faced several obstacles, including challenges related to land rights, food production competition, and sustainability concerns. However, with the introduction of Decree 61/2023, which mandates the blending of domestically produced biofuels with imported fuels, the country has renewed its commitment to biofuel development. The study emphasizes the potential of bioethanol and biodiesel to contribute to Mozambique’s energy mix and reduce its dependence on fossil fuels.
Agricultural Capacity and Investment Opportunities
One of Mozambique’s key strengths in developing a biofuel industry is its substantial agricultural capacity. The country has more than 80 million hectares of land, with only a small percentage currently under cultivation. The study identifies sugarcane and cassava as promising feedstocks for bioethanol production, while oilseeds such as soybeans and sunflower could be critical for biodiesel. The report also highlights the need for investment in agricultural production and infrastructure, and it outlines an investment pipeline aimed at fostering partnerships between local farmers and international investors.
Regulatory Framework and Infrastructure Development
The feasibility study thoroughly reviews Mozambique’s current fuel infrastructure and regulatory framework. While the country has existing capacity for fuel storage and distribution, the integration of biofuels will require additional infrastructure investments. Strategic placement of biofuel production facilities near consumption hubs, particularly in the southern and central regions, is recommended to reduce transportation costs and ensure efficient distribution.
Economic and Social Impact
The biofuel industry has the potential to generate significant economic benefits, particularly in rural areas where agriculture is the main source of employment. The study estimates that the biofuel sector could create thousands of jobs, especially for smallholder farmers involved in feedstock production. The development of biofuels could also help improve Mozambique’s balance of payments by reducing the need for fuel imports.
Mozambique’s biofuel sector presents a unique opportunity for economic growth, energy security, and rural development. The Biofuel Market Feasibility Study provides a clear roadmap for investment and development, signaling the government’s commitment to fostering a sustainable and diversified energy market. Stakeholders across the energy, agriculture, and investment sectors are encouraged to review the study and consider the strategic opportunities it presents.
Further Africa
