By Bilyamin Abdulmumin
On Tuesday, at a meeting with the United States Assistant Secretary of State, Bureau of Energy Resources, Ambassador Geoffrey Praytt, at the State House, Abuja, President Bola Ahmed Tinubu reiterated Nigeria’s commitment to honouring all its obligations to climate change and the quest for clean energy.
The president further called for stronger and better ties with the United States as Nigeria and the rest of the world move in the quest for renewable and other clean energy sources. This revelation made by President Bola Ahmed Tinubu made it imperative to bring to the front a related issue: Nigerian Biofuels Policy and Incentives.
To contribute to the global fight against climate change, Nigeria implemented the biofuel policy and incentive in 2007. This policy aims to encourage bioethanol and biodiesel production as supplementary to conventional transportation fuel, which is unfriendly to the climate.
It provides several incentives for potential investors, creating a conducive environment for biofuel production, and promises to establish a Biofuel Commission along with a dedicated Research Centre for the development of the sector. However, 16 years after, limited progress has been achieved, with only a few Memoranda of Understanding (MoUs) between Nigerian states like Kebbi, Niger, Ondo, Kogi, and the Nigerian National Petroleum Corporation, NNPC.
The policy has considered one of the major challenges of the biofuel sector globally: the expensive cost of production compared to conventional fossil fuels. As such, a range of incentives was offered, such as tax holidays, withholding tax exemptions, waivers on import and customs duties, waivers on value-added tax, long-term preferential loans, insurance, and most importantly, creating market demand (a promising alternative that the policy overlooked however was the use of cheaper local technology, materials, and equipment). Despite these incentives, the success of biofuels in Nigeria hinges on the government’s political will.
According to the policy, the Federal Government is responsible for providing necessary infrastructure, amenities, and facilities to communities where biofuel companies operate. The State Governments are mandated by the policy to facilitate the procurement and utilisation of agricultural land by biofuel companies. Additionally, in collaboration with State Governments and biofuel companies, the Local Governments are expected to organise out-grower schemes and other cooperative initiatives.
The feedstock of biofuel is grains/sugar, and oils. So, this highlights the hope the biofuel industry holds for the Nigerian poor who rely on subsistence farming. Traditional farming practices in Nigeria have remained unchanged for centuries. But thanks to the policy, farming technology can be drastically improved by integrating agriculture with the energy sector by adopting biofuels, hence more wealth and prosperity.
However, there is trouble in Paradise; biofuel feedstock brings about another major challenge: food vs energy conflict. But the policy did not keep a blind eye, as there were provisions for out-growers schemes for massive crop production. In Kebbi State, more than 5 000 hectares were procured for cassava cultivation. Other measures put in place to counter food vs energy conflict include the development and adoption of transgenic varieties of the feedstock to be specifically customised for the efficient production of biofuels (a promising alternative to food that the policy didn’t capture is utilising second-generation feedstock, which is more abundant and cheaper, that is, waste lignocellulosic materials and underutilised agricultural and forestry).
In effect, the biofuels mission holds dual benefits: foster economic growth and inclusivity for farmers while addressing the pressing issue of climate change, which the president just reiterated. Dear FG, considering the immense potential of this policy, and against the backdrop of celebrated bold actions on critical issues you have been undertaking, please give this policy a second chance, summon new hope, and get it hit the ground running.
Bilyamin Abdulmumin wrote via bilal4riid13@gmail.com.