The biofuels sector presents a significant opportunity for Africa as the world strives to meet rising energy demand and decarbonization targets, but requires adapted national policies, investments in R&D and cooperation with local communities to ensure success, after a series of failed attempts.
Biofuels, renewable energy sources made from biomass, are attracting increasing attention as they offer a low-carbon alternative to fossil fuels for electricity, heating and transportation. First-generation biofuels, derived from food crops such as corn and sugarcane, currently dominate global production due to their relatively low production costs and ease of conversion, with the United States and Brazil leading global bioethanol production (53% and 28% respectively). Second- and third-generation biofuels, derived from non-food biomass and algae, are expected to play a crucial role in future energy scenarios as they offer higher yields and lower emissions despite requiring sophisticated and expensive technologies.
Transitioning to biofuels aligns with broader global efforts to reduce greenhouse gas emissions and conform to the Paris Agreement’s 1.5°C pathway. Biofuels currently emit 50% less greenhouse gases than gasoline (53,3 g/MJ for ethanol’s lifecycle vs. 98,5 g/MJ for gasoline) and can emit more or less than battery electric vehicles depending on practices (2-108 g/MJ). However, the International Energy Agency (IEA) predicts biofuels will become carbon-negative by 2030, with carbon capture and sequestration reaching 135 Mt CO2 globally by 2030 in IEA’s Net Zero Scenario. In addition, biofuels could reinforce stability in energy prices and security, as demonstrated during the Russian invasion of Ukraine which caused a 60% rise in overall energy prices (vs. -13% in bioenergy prices).
As a result, the global demand for biofuels, driven by rising population needs and climate policies, is expected to double by 2030, reaching a total market of over $200 billion and constituting 9% of total global transport energy use. As only 60% of this demand is expected to be produced by announced supply, investors face an $80 billion opportunity to address the potential supply gap.
Nonetheless, Africa remains an untapped region for biofuel development, contributing less than 1% of global production, (1.2 TWh out of 1,220 TWh globally in 2023). In contrast, countries like the United States, Brazil and Indonesia collectively account for 74% of global production. Yet the African continent stands to benefit significantly from an expansion of biofuels, with 40% of the population lacking access to electricity and energy consumption expected to increase by 40% in the continent over the next decade. Transportation needs should also significantly increase with vehicle sales across the continent expected to triple by 2030, as only 2.5% of Africans currently own a car. Finally, 940 million Africans currently lack access to clean cooking, which causes deforestation, gender inequalities and over 490,000 annual premature deaths due to indoor air pollution in sub-Saharan Africa.
Biofuels offer a pathway to improve access to electricity as feedstock conversion to biofuels requires minimal capital expenditure and is adapted to small-scale farms and use on decentralized mini-grids. Biofuels also represent a profitable opportunity to address access to clean cooking, as in Kenya alone, the ethanol market for urban cooking holds an estimated value of $600-$800 million. Regarding transportation, blending biofuels with traditional fuels is a “drop-in” solution as it is compatible with existing combustion engines.
The risk of biofuel production competing with that of food crops may have hindered the development of biofuel production, in a continent where over 800 million people are impacted by moderate to severe food insecurity (2020). Many locally grown crops, such as sweet sorghum, cassava, and sugarcane, offer high potential for biofuel production due to their favorable yields – 3.5K-6.5K liters per hectare for sweet sorghum vs. 6K-8K liters per hectare for sugarcane dominating ethanol production in Brazil. However, there is also the opportunity to leverage non-food crops like Jatropha, a resilient plant with the potential to produce up to 1.6K liters of biodiesel per hectare without competing with food supply chains. Other non-food crops, such as camelina and pongamia, also show promise due to their ability to grow on marginal lands unsuitable for food production. With the continent’s current agricultural value added per worker reaching only 40% of the global average, developing an African biofuel production could direct efforts towards stimulating agricultural modernization and crop diversification, thus enhancing agricultural productivity and food insecurity while addressing growing energy needs.
The potential of biofuels varies significantly across African countries, depending on local agricultural practices, infrastructure, and governance. Our analysis based on ten criteria measuring potential impact (population growth, energy imports, transport energy used, access to clean cooking and CO2 emissions) and feasibility (R&D expenditure, competitiveness index, drought risk score, arable land and biodiversity index) highlights eight countries with the highest biofuel potential: Kenya, South Africa, Mozambique, Nigeria, Zambia, Tanzania, Angola, and Ethiopia. For instance, South Africa, with its robust agricultural infrastructure and ambition Biofuels Regulatory Framework (2020), aims to produce 300 million liters per year of sustainable aviation fuel from sugarcane, while Kenya’s well-established biogas program has resulted in 8,000 biogas plants producing 413 million liters of bioethanol in 2016.
However, past biofuel projects in Africa have faced significant difficulties forcing almost all of them to a complete stop. Eni’s $735 million biofuel strategy in Kenya and the Republic of Congo, backed by the International Finance Corporation and the Italian Climate Fund, struggled with poor yields, droughts, and lack of local support. Similarly, Addax’s €500 million initiative in Sierra Leone to produce 83,000 m³ of ethanol annually was abandoned in 2015 due to financial mismanagement, land conflicts, and environmental degradation.
For biofuel projects in Africa to succeed, public policy, including financial incentives (such as Nigeria’s biofuel tax exemptions) and regulatory frameworks (e.g., South Africa’s 2020 Biofuels Regulatory Framework) are essential. Public-private partnerships and international cooperation must be implemented to support investment in research and development, particularly in adapting biofuel technologies to local contexts, to build the technical capacity required to scale biofuel production. Moreover, infrastructure investment, including storage, transportation, and biorefineries, must be prioritized to support the sector’s growth. Finally, close cooperation with local communities is a necessary condition to ensure project acceptance and support, as highlighted by numerous unrests and legal conflicts following the Eni and Addax projects.
In conclusion, biofuels represent a high-potential opportunity for Africa, with the ability to drive economic growth, enhance energy security and improve living conditions of local populations while contributing to global climate goals. However, the path to making Africa a leading player in the global biofuel market requires overcoming significant technological, financial, and policy-related challenges.