July 5, 2015

Uganda to Enact Biofuels Legislation

Legislation will create incentives like tax rebates, which will encourage investors to develop biofuels.

The Uganda cabinet has approved the Biofuels Bill 2015, and authorised the Minister of Energy and Mineral Development, Irene Muloni, to have it gazetted and introduced to Parliament for debate and enactment.

The Bill provides for the provision of regulations for the production of biofuels feedstock, production of biofuels storage, transportation, blending in petroleum products and their usage.

As the Bill gets into Parliament, it has been noted that even if Government has the Renewable Energy Policy 2007, in place, which provides for the blending of biofuels with fossil fuels (Petroleum Fuel) in regulated proportions, oil marketing companies have not shown strong enthusiasm to prepare for blending of the fuels when the products become available.

The Renewable Energy Policy, provides for compulsory blending of biofuels with fossil fuels up to 20 percent of the former component.

When Uganda starts local production of Petroleum products by 2018, blending will enhance the life of the country’s oil fields through partial substitution.

“Access to modern forms of energy transforms people. It changes the way they behave, improves their levels of productivity and liberates the marginalised in society. So sustainable energy for all will result in improving service delivery,” said Irene Muloni, the Minister for Energy and Mineral Development at a symposium on ‘Universal Energy access to Uganda’.

Muloni said the government put in place the renewable energy policy, which aims at increasing the share of renewable energy from four per cent in 2007 to 61 per cent by 2017.

This should lead to decrease in fuel wood usage that accelerates deforestation and is also associated with land degradation, and ill-health due from indoor pollution. Uganda loses 6,000 hectares per annum of forest due to over-dependence on firewood and charcoal.

Therefore, the introduction of biofuels in the energy sector mix will enhance the country’s energy security through short gestation projects using locally produced biofuels leading to increased investments.

The Bill, will also enable more investments into biofuels, which requires legislation. Legislation will enable the developers to access long term finance, which is required in the biofuels industry. In addition, Legislation will create other incentives like tax rebates which will encourage investors to develop biofuels.

In respect of agriculture and rural development, one of its pillars is the enhancement of agro-processing and marketing. The production of biofuels feed stock shall increase rural earnings, whereas, the utilisation of biofuels in powering decentralized agro-processing units shall increase employment opportunities and value addition.

Biofuels production and utilization provide for cleaner and environmentally friendly fuel for industrial purposes, cooking, transport and power generation. Uganda is a signatory to the Kyoto Protocol and this is a step towards reduction of greenhouse gas emissions and contributes to the global fight against climate change.

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