A STUDY TO ANALYZE THE STATUS OF PRODUCTION AND IMPACTS OF BIOFUELS ON FOOD SECURITY AND ENVIRONMENT IN KENYA, TANZANIA

AND ETHIOPIA

A Summary of Key Recommendations for Policy Makers

BirdLife Africa Partnership, Nairobi Kenyanairobi.office@birdlife.org

January 2012

EXECUTIVE SUMMARY

Background and Problem

The growing world energy demand and concerns over the sustainability of world energy supplies has necessitated the development of alternative energy sources. The increasing prices of fossil fuels coupled with the need to reduce greenhouse emissions have made biofuels development a top priority of many governments. Proponents of biofuels posit that biofuels developments could enhance energy accesswhile contributing to rural development. Thus, governments, investors and non-governmental organizations are promoting biofuels developments. Indeed, many biofuels projects have been launched across the world. However, while the development of biofuels remains well-intended, recent analyses suggest that biofuels are a threat to biodiversity, food production and land access rights. Doubts also emerged overcontribution of biofuels to reducing greenhouse gas emissions.

With a focus on Tanzania, Ethiopia and Kenya, this study was commissioned by the African Secretariat of BirdLife International to examine the current status of biofuels production, needs of governments and impacts of biofuels on (1) biodiversity, (2) agriculture and food security, (3) Land access rights and (4) climate change mitigation efforts.

Key Findings

Status, plans and policies for biofuels production in Tanzania, Ethiopia and Kenya

All the three countries have witnessed tremendous developments in biofuels.

In Tanzania, over 20 investors have requested for land for biofuels production. Some 650 000 ha have already been allocated for biofuels. To guide biofuels developments, the Ministry of Energy and Minerals formulated the Guidelines for Sustainable Liquid Biofuels Development in Tanzania. Tanzania is currently in the process of developing a biofuels policy. While many investors have started operations, it must be noted however, that some of them such as Sun Biofuels Ltd have already stopped operating due to low feedstock productivity.

In Ethiopia, over 80 investors have registered for biofuels development. Ethiopia plans to allocate 23 million ha of land to biofuels and to produce 1.8 billion liters of biofuels by 2015. To guide biofuels developments, the Ministry of Energy and Water developed the Biofuels Development and Utilization Strategy. A Biofuels Development Coordination Directorate was formed to oversee biofuels developments. Like in Tanzania, some of the investors that had started operations such as Sun Biofuels Plc. have since stopped their operations due low feedstock productivity.

In Kenya, the Ministry of Energy is promoting the development of bioethanol and biodiesel. Through biodiesel production, the Ministry aims to reduce the number of households using fuel wood by 25% by 2015,and those using kerosene by 50% by 2050. Adraft National Biofuels Policy and Strategyhas been formulated. Similarly, a draft Strategy for the Development of Biodiesel Industry has been developed. Over 10

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biofuels projects/ investments have been launched in Kenya.

While the three countries are promoting biofuels to meet domestic energy needs,reduce carbon emissions and enhance rural development, all the major (large-scale) investors are foreign companies that aim to supply foreign markets.

Impacts of Biofuels production in Tanzania, Ethiopia and Kenya

Involvement of local communities in biofuels production and the benefits derived

Across the three countries, local communities have been involved in biofuels production as (1) laborers and as (2) contractfarmers/ out-growers, which earns them some income.

In Tanzania Sun Biofuel Ltd and FELISA have engaged local communities as laborers inbiofuel plantations. Diligent Ltd, TaTEDO and FELISA have engaged local farmers as contract farmers/ out-growers. Diligent had by 2008 contracted 5 000 farmers to supplyJatropha seeds while FELISA has contracted 36 farmers’ group to supply part of its palm oil needs. TaTEDO and Diligent Limited buy Jatropha seeds from farmers at TSh. 200 –300 (USD. 0.126 to 0.189)/ kg. Sale of palm oil has not yet started. In terms of wage earnings, Sun Biofuels paid its employees about TSh. 120 000 (USD 76)/ month. Since, this pay was subject to statutory deductions;the net monthly wage was less than USD 76.

In Ethiopia, Sun Biofuels Plc. and Flora Eco Power Ltd have engaged the surrounding communities as laborers in their biofuel plantations. Flora Eco Power has also contracted 4 000 farmers to supply part of

its castor bean needs. The Company paid ETB 2 000 (USD 116.4)/ ha for castor bean yields of > 3.5 tons/ ha. Sale of Jatropha has not been reported as Sun Biofuels Plc. stopped its operations before the crop matured. In terms of wages, Flora Eco Power employed 462 skilled and over 3 000 unskilled workersand paid the workers between ETB 15 and 40 (USD 0.87 – 2.4)/ day depending on their skill level. Since most of the laborers are unskilled; their daily earning was less than USD. 2.

In Kenya, the Kenya Jatropha Energy Ltd and Bedford Biofuels Inc. involved local communities as laborers in their biofuel plantations. The Naro Maru Self Help Group has contracted communities in Nyeri, Muran’ga and Ngong as croton seed collectors. The Group buys croton seeds at KSh. 7 (USD 0.08)/ kg. Jatropha seeds are sold at an average price of KSh. 10 (USD 0.114)/ kg. The Group employs about 10 people whose minimum daily income is KSh. 250 (USD 2.85).

Another way through local communities could benefits from biofuels is through use ofthe derived biofuels for heating and cooking. However, except for Tanzania where TaTEDO installed multifunctional platforms in Luvuruki and Selela villages, which has seen 60 households in Luvuruki use electricitygenerated from Jatropha oil, use of biofuels by the rural population in Kenya and Ethiopia is very low.

Impacts on biodiversity

Across all the three countries, biofuels have adversely affected biodiversity.

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In Tanzania, part of the land allocated to Sun Biofuels Ltd form part of the Ruvu/ Pugu/ Kazimzumbwi Forest Reserves.

These forests form part of the Kisarawe District Coastal Forests, which is an Important Bird Area. They contain several bird species including the Spotted Ground Thrush, which is a globally endangered species; the East Coast Akalat and the Southern Banded Snake Eagle, which are near-threatened species and; the Little Yellow Flycatcher, which is endemic to Coastal Kenya and Tanzania. The forests also contain several rare, threatened and endemic plants and animals including the Ronda galago - a critically endangered primate and the rarest of all bush babies. The area under Jatropha plantations was an important transit route for elephants and buffaloes to the Mabwawa dam.

In Ethiopia, Flora Eco Power established part of its castor plantations deep in the Balille Elephant Sanctuary. The sanctuary houses the fragmented, relic elephant population found in the Eastern part of the Ethiopia and protects a unique elephant population that exists only in East Africa. Additionally, the Sanctuary is an Important Bird Area, being home to 191 bird species including the

Salvadori’s Serine (Serinus xanhoelaemus) -which is restricted to lowlands.

In Kenya, both the Tana River Delta and Dakatcha woodlands are Important Bird Areas. Apart from being home to many near threatened and threatened species, the Dakatcha Woodland is probably the only nesting site of the Clarke’s Weaver while the Tana River Delta at times houses exceptional populations of over 22 species of Internationally Important water birds.

Across all countries, the areas allocated for biofuels also provide several provisioning, regulatory, supporting and cultural services. In Tanzania, the forests of Kisarawe are used by surrounding communities as a source of various subsistence resources including wild fruits and vegetable, pottery soil and are a major source of water. In Ethiopia, the Babille area has several rivers, which supply water for both human and livestock use. In Kenya, the Tana River Delta is an important seasonal grazing area and regulates the flow of R. Tana. The Dakatcha Woodland for part of the Kaya forests which are a shrine of the surrounding Miji Kenda community and are used for educational purposes.

Impacts on agriculture and food production

In Tanzania and Ethiopia, the allocation/ use of village/ communal land for biofuels has reduced the amount of land available for food production. Similarly, in both countries, employment of large number of people in the large-scale biofuel plantations has reduced agricultural labor.

In Ethiopia, Flora Eco Power contracted several farmers to grow castor. The area under castor in contract farming stands at 5

Part of the Ruvu Forest Reserve cleared for biofuels development in Kisarawe

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000 ha. This area was initially under sorghum. Sorghum is a major staple in Ethiopia. The use of heavy chemicals by the company killed 75 bee colonies in the Mudi-Tola Kebele. Honey is used in the region as both food and medicine, and is a source of income. In addition, massive clearing of forests by the company resulted in heavy flooding which destroyed 24 ha of cropland in Barkalle kebele. In terms of labor, Flora Eco Power engaged about 7 000 people as laborers in its castor plantations while Sun Biofuels Plc. engaged over 1 000 people.

In Kigoma Tanzania, FELISA has contracted 36 groups of farmers to produce palm oil. In Arusha Diligent Ltd has contracted 5 000 farmers to supply Jatropha seeds. In Rufiji, several farmers have indicated willingness to shift from growing rice to growing sugarcane for bioethanol production. In Kisarawe, the land allocated to Sun Biofuels has been used to grow cassava and mango. Both cassavaand rice are key staple foods in Tanzania. In terms of labor, both companies engaged many people from the surrounding villages as laborers.

In Kenya, however, most biofuels investments occur on private land and involve intercropping with food crops andhave thus not affected food production. Some farmers have realized improved cropyields as a result of intercropping food and biofuel crops. In terms of labor, the NaroMaru Self Help Group has engaged communities in Nyeri, Muran’ga and Ngong as seed collectors.

Impacts on local land access rights

Across all the countries, government/ public, communal/ village and private lands have been allocated or used for biofuels

production with adverse impacts on local land access rights.

In Kisarawe, Tanzania, several hectares of village land was allocated to Sun Biofuels Ltd., leading to the displacement of 11 villages. So far, only two people have been compensated at TSh. 700 000 (USD 441)each. Since the local communities, including the two people who were compensated are not aware of the acreage of land that was allocated to the company, it is not clear how much compensation was given per unit of land. In places such as Rufiji, the compensation was only for mango, cashew and coconut trees. Neither the land nor developments on it were compensated for. The allocation of areas considered ‘marginal’, ‘idle’ or ‘unoccupied’ has also denied local populations access to arrange of livelihood resources such as firewood.

In Ethiopia, the allocation of communal land in West Harerge to Flora Eco Powerdisplaced 200 households. None of these people has been compensated. The allocation of ‘unoccupied’ areas has denied pastoralists access to their traditional grazing lands and other communities, access to vital livelihood resources.

In Kenya, the allocation of land in the Tana River Delta to Bedford Biofuels Inc. displaced 2 000 households and denied pastoralists access to this traditional seasonal grazing ground. None of the displaced households has been compensated.

Impact on climate change mitigationefforts

The three countries are participating in programs aimed at reducing emissions from deforestation and forest degradation and

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enhancing conservation and sustainable management of forest (REDD+). Tanzania is participating in the UN REDD program while Ethiopia and Kenya are participating in the Forest Carbon Partnership Facility (FCPF).

However, in all the countries several hectares of forests have been cleared for biofuels. In Tanzania, 4 000 ha have been cleared in Kisarawe for Jatropha production while 5 000 ha have been cleared in Kigomafor palm oil production.

In Ethiopia, Sun Biofuels and Flora Eco Power have respectively cleared 60 ha and 10 000 ha of virgin forests for Jatropha and castor production.

In Kenya, 20 000 ha of forests has been cleared in the Tana River Delta. Such massive clearing of forest/ woodlands for large-scale biofuels plantations compromisesthe desire of these countries to reduce emissions from deforestation and forest degradation.

Recommendations

The governments of the three countries should institute stronger measures to protect biodiversity. The countries shouldexclude all Key Biodiversity Areas

(including Important Bird Areas) and wildlife corridors/ migratory routes from biofuels. There is also need to enhance enforcement of EIA laws to ensure that clearing of virgin forest, wetlands, etc. for biofuels is prohibited. The three countries should not only stop biofuels developments in such critical conservation areas as the Babille Elephant Sanctuary (Ethiopia), the Tana River Delta and Dakatcha Woodland (Kenya) and the Ruvu/ Pugu/ Kazimzimbwi forests (Tanzania) but should also compel the responsible investors to restore theseareas to their original status.

The three countries should stop the development of large-scale biofuels incritical food production areas. There is need for these countries to identify and exclude all current and potential food production areas including marginal lands use by local communities for their livelihoods from biofuels investments. The three countries should also limit the amount of individual/ communal land that can be under biofuels to ensure that increase in biofuels prices do not result in farmers devoting more land, labour andinputs to biofuels at the expense of food crops.

The countries should stop allocating communal/ village lands to large-scale biofuels investors. Mechanisms should be put in place to ensure that biofuels production does not infringe of people’s rights to land. Where communal land is allocated to biofuels, the land should be valued and the affected promptly compensated. Particularly for Tanzaniaand Ethiopia, there is need to developmechanisms for sharing compensation between the district administration and

Clearing of forest lands for biofuels development by Flora Eco Power

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the villagers. Equally important is the need to institute an all-inclusive redress mechanism through which to address disputes. There is also need to develop an acceptable definition of ‘marginal’, ‘idle’ or ‘unoccupied’ land since land that is considered as ‘marginal’, ‘idle’ or ‘unoccupied’ by one group could be of utmost importance for the other.

In all the three countries, biofuels production should be for meeting domestic energy needs and only surplus is exported. There is need to put in place mechanisms for local production and use and develop proper infrastructure for local processing.

All the countries should ban clearing of virgin forests, wetlands and other forested areas for biofuels. This is necessary if biofuels are to contribute to climate change mitigation and realization of REDD+ objectives. Protocols and Frameworks should be developed to ensure biofuels developments results in at least 60% GHG savings considering direct and indirect emissions.

Currently, biofuels developments should be limited to only small-scale rural-based investments. This is because it is only small-scale, rural-based biofuels investments that have benefited local communities without adversely effectingbiodiversity, food production, land rights and climate change mitigation efforts.

The countries should suspend development of large-scale Jatropha plantations. This is because of the low and uneconomical productivity of Jatropha across all the countries. Currently,

cultivation of Jatropha should be for only agronomic testing and genetic improvement.

In all countries, biofuels developments, regardless of the scale, should be subjected to thorough environmental and social impact assessments. This will guard against undesirable social and environmental impacts and mitigate against any indirect land use changes that accompany biofuels developments.

Africa needs to develop a policy on biofuels if Africans are to benefit biofuels. The policy should ensure that trade in biofuels is fair and recognize the rights of producers to just rewards for their produce, land and labour. The policy should also demand the development of well-researched sustainability standards and that biofuels production meet these standards as evidenced by certification and GHG emission guarantees.

The three countries and Africa need to devote more resources to biofuels research. This is necessary to determine the social, economic and environmental viability of biofuels and identify suitable production models and technologies.

The European Union should scrap the 10% mandatory target on transport. This Directive should only be enforced once the Union is certain that the target can be in a truly sustainable manner. The EU and other developed countries should also reduce the subsidies geared towards biofuels so as not give biofuels undue advantage in the international market.

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