The Federal Government is considering a new biofuels development policy for a viable alternative to the continued dependence on imported petroleum products as fuels for energy supplies in the country.
A forum recently facilitated by the Petroleum Products Pricing Regulatory Agency (PPPRA) has already recommended the constitution of a technical committee to undertake a comprehensive review of the 2007 national biofuels policy, to remove all impediments to achieving the bio-fuels development initiative, and replace with a framework that will be more commercially friendly.
The Energy Commission of Nigeria (ECN) is expected to provide the necessary technical input to the deliberations, particularly concerning previous and ongoing biofuels initiatives, as well as the existing relationship between producers and foreign off-take partners from China and Singapore. This will also enable Nigeria gain access to the carbon credit available under the Clean Development Mechanism (CDM).
During a recent meeting in Abuja, attended by the Department of Petroleum Resources (DPR) and other government monitoring and regulatory agencies in the oil and gas industry, members observed that the provisions of the existing policy document were inadequate to help realise the national objective.
Participants were of the opinion that rather than have an agreement entered into solely with the Nigerian National Petroleum Corporation (NNPC), as envisaged under a previous arrangement, the proposed policy should make it an industry-wide pact, to enable depot owners and petroleum products marketers partake, in line with the current reforms in the petroleum industry.
Unhelpful policies for local production
They also pointed out that the current import-based policy on petroleum products supply in existence was a dis-incentive to local production and domestic self sufficiency in fuels production.
The Biofuels Policy and Incentives (2007), which was approved by the Federal Executive Council on June 20, 2007, and gazetted to facilitate the promotion of a national bio-fuels development programme in the country, was, however, found to contain some lapses, including its being dependent on import as well as state-controlled monopoly.
The NNPC was mandated to create an enabling environment for the take-off of a domestic ethanol fuel industry, to gradually reduce the country’s dependence on imported petroleum products, reduce the negative impact of environmental pollution, as well as create a commercially viable industry capable of sustaining the creation of domestic job opportunities.
“The imperative for a policy review is that given the fact that bio-fuels markets worldwide are mandate-driven, Nigeria cannot afford to be an exemption. There need for the biofuels policy document to be reviewed by a sub-committee before presentation to the main committee. There is also the need to incorporate other relevant organisations, such as the financial institutions, farmers association, etc.,” said Abiodun Ibikunle, the PPPRA executive secretary.
The technical committee on biofuels development, which is expected to be inaugurated next week by the minister of petroleum resources, Diezani Alison-Madueke, will include the NNPC, Major Oil Marketers Association of Nigeria (MOMAN), Depot and Petroleum Products Marketers Association (DAPPMA), DPR, PPPRA, and Standard Organisation of Nigeria (SON).
Others are representatives of the ECN, Central Bank of Nigeria (CBN), New Partnership for Africa’s Development (NEPAD), National Association of Road Transport Owners (NARTO), farmers association, federal ministries of finance and petroleum resources.
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