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New biofuels policy could provide boost to Zimbabwean sugar sector

30 January 2012

According to a report published by USDA, proposals for a new biofuels policy in Zimbabwe should benefit sugar cane producers, as the sugar pricing agreement ‘will ensure that farmers benefit from the whole value chain (i.e. from sugar, ethanol and bagasse)’. Other measures are designed to promote biofuel consumption (e.g. via the removal of the carbon tax on ethanol) and boost production, with the aim of producing ‘at least 10 percent of the country’s liquid fuel requirements by 2017’.

Currently, Zimbabwe’s ethanol production ‘is anchored on sugarcane as the feedstock of choice’. In 2009, Triangle and Hippo Valley Estates restarted production of fuel-grade ethanol, with a capacity of 1 million litres, while in September 2011 a US$600-million ethanol distillery opened in the south eastern sugar-producing zone at Chisumbanje. This joint-venture initiative has a capacity of 100 million litres per annum in the first phase. Some 5,500 ha of sugar cane has been developed by the private partner, with a further 11,000 ha scheduled for January 2012. In addition, smallholder out-growers are expected to put a further 10,000 ha under sugar cane. It is anticipated that electricity co-generation will be developed alongside ethanol production.

A policy framework for ethanol blending is still awaited, with a blending target of 10% initially anticipated. However, climate and altitude factors would technically allow a blending rate of up to 25%.

Biodiesel production was in the past based on jatropha as a feedstock. However, financial constraints in the government agency responsible for rolling out this programme led to it stalling. Under the new policy, the feedstock for biodiesel production is to be broadened.

Editorial comment

In terms of regional sugar producers, a significant aspect of the new Zimbabwean biofuels regulatory framework is the provisions ensuring that sugar cane producers secure financial benefits from all products of the sugar cane industry. This is not the case in a number of neighbouring sugar-producing countries, where payments to sugar cane farmers are based solely on revenues from the sale of raw sugar and molasses (including the value of the molasses used to produce value-added products such as ethanol and alcohol).

Given the pending further reforms of the EU sugar regime, which are likely to reduce the price paid for imports of raw sugar from the ACP suppliers and exert a downward pressure on world market prices for sugar, ensuring that sugar cane farmers are able to benefit fully from revenues generated from the sale of all sugar-cane-based products would appear to be an important regulatory challenge across a number of countries in the Southern and Eastern African region. 


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