MOZAMBIQUE CONSULTANCY REPORT ON BIO-FUEL STUDY

Transcription

1 MOZAMBIQUE CONSULTANCY REPORT ON BIO-FUEL STUDY 1. INTRODUCTION African countries have relied on fossil fuels, hydropower and biomass to meet energy demands for the urban and rural needs. Concomitantly, the supply of fossil oil has been affected by dynamic economic, environmental, and political and security instability throughout the world. This has lead to the current high and volatile prices that affect the prices of many other commodities such as agricultural inputs as well as food products. Mozambique is one of the countries whose citizens rose up and manifested against the ever increasing prices of oil and the effect on their lives, particularly transport costs and food. Energy is a fundamental engine for economic growth and the current inability to sustain the supplies at reasonable price will have a short and long term impact on the ability of the countries like Mozambique to deliver on its poverty reduction strategy and achieving the Millennium Development Goals. The Vision 2025 for Mozambique prioritises the supply of energy and expansion to rural areas as a necessary step towards equitable development and poverty reduction. The PRSP for (GoM, 2006) highlights the following priorities: transformation of agriculture to increase its competitiveness in the international markets as well as the formulation of a national sustainable energy policy, promotion of investments in dams for production of hydroelectric power and guarantee the sustainable use of natural resources. In addition, the government pledges to increase the distribution of the network of distribution of liquid fuels including diesel, unleaded petrol, introduce the use of gas for transportation as well as search for alternatives such use of solar, wind and biomass energy to counter the deficit. Besides fossil fuels, over 70% of the population in Mozambique rely on biomass energy such as firewood for their domestic needs. For many decades this has impacted negatively on the natural resources, principally deforestation around the main urban centers of Maputo, Beira and Nampula. State led energy plantations of the late 70 s and early 80 s, agroforestry and community forestry that followed have all failed to provide an alternative (to deforestation of natural forests) due to the intrinsic characteristics of the exotic species, lack of capacity (financial and managerial) on the part of the government and, unclear land and tree property rights, which were crucial for community involvement. Therefore, Mozambique continues seeking for alternative sources of energy through increased production of hydroelectric power and expansion of the supply network to rural areas, exploration of natural gas, improved efficiency of energy biomass energy utilization, prospecting oil in the major river basins, particularly Rovuma in the North of the country as well as seeking the introduction of biofuels. This led the country to start a campaign at high political level to mobilize people to engage in plantation of Jathropha for further processing into biodiesel. Again, the poor planning of this process is reflected on the fact that people were urged to embark on plantations in most cases of uneconomic units without a strategy for marketing the raw material or support in training on and establishment of simple processing technologies. Yet Mozambique is considered in the UN Framework (2007) as one of the four countries in Africa that has a policy framework for biofuels. As it will be seen later there is definitely a political will to embark on large scale production of biofuels, but there is no clear policy and strategy as yet. Mozambique is considered by analysts as one of the African countries with the largest biofuel production potential. Researchers affiliated with the International Energy Agency estimate that Mozambique can produce around 7 Exajoules of biofuels sustainability. The country currently 1

2 consumes around 0.18EJ. Consequently this would lead to full energy independence, with capacity to spare to supply international markets. The country is under pressure to embark in a grand scale production of biofuels. Ethanol and biodiesel are two liquid biofuels which can potentially be produced from vegetative materials such as respectively sugarcane, cassava and maize and, coconut, cotton, groundnuts and sesame. Besides meeting the demand for energy, the production of biofuels is also credited with having potential impact in reducing the emission of green house gases, hence contributing to mitigation of climate change. Further the production of biofuels is believed to have a great potential to contribute to poverty alleviation in the country. Amidst this situation, WWF SARPO has commissioning a study to analyse the existing policy and institutional frameworks supporting the production and commercialization of biofuels, the sustainability of supply and markets, distribution of benefits and capacity of various stakeholders involved in the process (WWF SARPO, TOR). Further, questions are raised with regards to potential risks to food security due to competing land use and marginalization of local communities particularly with respect to security of land tenure. For example, FAO is already engaging in projects to seek to establish the impacts of biofuels on food security and approaches to compilation and analysis of biofuels statistics. Information is fundamental aid to decision making besides facilitating the monitoring of the impact of the pursued policy options. A particular focus of this study was the Zambezi river basin Delta) which supports a large area of wetlands offering good agroecological conditions for growing sugarcane and other biofuel crops. The objectives of the study include: (i) Carrying out a survey of existing bioenergy policies and technological capacity in the production process in each site. (ii) Describing levels of production, the drivers of the production (big companies) and status of out grower schemes/ communities in each site including an analysis of capability, land availability, technology, investment and crop quality as well as potential environmental impacts. (iii) Evaluating the economic and financial potential for the community/out grower schemes and likely contribution to national strategies on energy, poverty reduction and likely impact on the environment. (iv) Providing a critical comment on the economics of biofuels production and marketing as well as propose improvements to ameliorate the social and economic benefits of the current and future schemes. (v) Articulating the manner of support that would ensure that this capacity is used effectively. The report is outlined as follows: a brief presentation of data collection approach followed by a section analysis the socio-economic context as regards energy consumption in the country and the existing policy and institutional policies as well as gaps. Then an analysis of the various initiatives that are being planned or implemented is conducted in the next section. The final section draws some conclusions and recommendations. 2

3 2. METHODOLOGY/APPROACH UN (2007) has developed an analytical framework that highlights various sustainability issues to be considered in the process of decision making on whether to embark bioenergy production as well as checking on the impact. The framework includes issues such as the provision of bioenergy for the poor, implications for agro-industry and employment, the impact on the structure of agriculture and food security, possible impact on health and gender taking into account that women in developing countries are the main producers and users of biomass for energy with consequent health impacts. The article on IRIN website poses the following important question: Africa: food to eat or run a car?. There is need to determine the trade offs associated with bioenergy and food security to aid an informed decision making on land use, technology and labur use. Other issues suggested by the framework include the financial support from governments or impact on the budget, implications on trade, foreign exchange balances and energy security, impacts on biodiversity and natural resources management and on climate change. However, the broad categories of issues that this framework recommends are: (i) the existing knowledge on the resources, demand and technologies; (ii) overall policy and rural development priorities, land use, environment, industry as well as existing initiatives in research and development. This study analysed the extent to which the various aspects mentioned in the framework are considered in the ongoing decision making regarding the biofuels. The study as such consisted of literature review, interview (face-to-face and telephone) of various individuals representing various institutions engaged at: policy development level such as the case of the Ministry of Energy particularly the National Directorate of New and Renewable Energy, the Centre of Promotion of Agriculture (CEPAGRI), the National Directorate of Lands and Forestry (DINATEF), the National Directorate of Conservation Areas (DNAC) particularly the Transfrontier Conservation Areas (TFCA) Unit which oversees the activities in the Great Limpopo Transfrontier Park, the National Directorates of Environmental Management (DNGA) and Environmental Impact Assessment (DNAIA). Government institutions facilitating implementation of the policy and legal framework at the local level in Sofala province including the Provincial Director of Agriculture and the Head of the Provincial Services of Forestry and Wildlife in Beira and the Provincial Directorate of Agriculture in Gaza province. It was also possible to meet the Head of the Administrative Post (the lowest administrative unit in the country) of Xinavane in Manhiça district in Maputo province as well as the technical assistant for the sugar cane associations of the same administrative unit. Research institutions such as the Faculties of Agronomy and Forestry and Faculty of Engineering (FAEF) of the Eduardo Mondlane University (UEM) both conducting research in areas of bioenergy from the study of ecological aspects associated with various species as well as the various processing and efficient use technologies. Community conservation and development practitioners such as the African Wildlife foundation (AWF) supporting one of the affected communities by this (biofuels) initiative and WWF with overall concern on conservation and management of protected areas in Mozambique. Interviews were also held or attempted with investors 1 such as SEKAB or Eco-energia, and Açucareira de Xinavane (Tongaat Halett) in Maputo, Açucareira de Moçambique in Mafambisse in Sofala (outside the Delta) and Açucareira de Marromeu. 1 Unsuccessful attempts to meet PROCANA manager travel. 3

4 Interviews were also held with two community associations producing sugar cane under contract agreement with Açucareira de Xinavane in Maputo province. In total 22 interviews were conducted including a sample of over 30 people (Appendix 1) between 27 th April and 9 th May The consultant also attended a seminar on biofuels in Maputo organized by FEMA 3, which is a forum of private sector for environmental management. The TOR limited the study area to wetlands and particularly the Zambezi Delta. Nevertheless, for practical reasons particularly the relative absence of ongoing activities in the area led to opening the scope of the study. In fact, the telephone interview with the manager of the Açucareira de Marromeu and local government authorities in the Sofala province established that there were only fuzzy plans for production of bioethanol from molasses and bagasse which is currently exported. The company manager reiterated that any future involvement of the company in production of biofuels would be determined by the approval of the government strategy in this regard and the initial phase of such production would be directed to internal use by the company to reduce its current soaring cost of production due to high cost of fuel. Furthermore, the members of the management board of the Açucareira de Mafambisse were engaged in a two day meeting, hence only available for a telephone conversation. Consequently, looking at the ongoing or planned activities to produce biofuels at a larger scale seemed to be a more rational approach. However, there are obviously trade offs between the ability of undertaking a detailed analysis of financial and economic viability of the involvement of small-scale farmers in biofuels production versus a broad understanding of the challenges of withstanding an external pressure to license the biofuels production and, meeting goals on environment, eradication of hunger and poverty. These are important millennium development goals that the government subscribes to and strives to deliver on, and implicit the TOR as they raise the concerns over the livelihoods of the people and environmental sustainability. The findings of the study are integrated in the discussion of policies to illustrate the interface between the good policy intentions for example regarding land allocation procedures and participatory natural resources management and practice. The dilemmas and conflicts between existing rights and superior rights of investors for biofuel production and other economic activities highlight some of the inefficiencies in policy implementation. 2 Travel time included, time limitation did not allow meeting with institutions such as Technoserve, GTZ, the World Bank, the Italian Cooperation and consulting companies such as KPMG and Sal e Caldeiras all perceived to interests in the biofuels or contributing in various ways. Although the Açucareira de Xinavane, was visited, the managers were not authorised to discuss the issue and instead recommended to contact Tongaat Hallet in South Africa. The information regarding production of biofuels presented in this report was found in the website. 3 This institution often calls for its members to observe social and environmental corporate responsibility in undertaking of their economic activities. 4

5 3. BIOENERGY PRODUCTION IN MOZAMBIQUE: THE CONTEXT AND POLICY CHALLENGES 3.1 SOCIO-ECONOMIC CONTEXT Mozambique has a total land cover of 784,089 Km 2 and 17,500 Km 2 of inland water, although about 40% of the land is somewhat arable, only 10-15% is currently under cultivation and productive forest covers 51% of the country while 19% has woodlands with miombo and mopane, thickets and forests under shifting cultivation. The country s population is 20.5 million of which 63% still lives in rural. The poverty incidence is 54% and there is a growing tendency towards a more skewed wealth distribution. This increased from 0.40 in 1997 to the current 0.42 and the GDP per capita is still among the lowest (less than USD 500). 78% of labour in the country works in the agricultural sector, which contributed 22.6% to the GDP in The HIV/AIDS menace affects about 16% of the population. Most of the population in Mozambique consumes biomass energy considered to be an important factor in deforestation which is about 0.3% per annum. The draft report of the DINATEF for 2007 indicates that last year the licensed exploitation of biomass energy, particularly charcoal and firewood was around 781,566 bags (generally of 50 Kgs) and nearly 38,000 m 3. Both total over thousand m 3 of wood. This accounted wood biomass is just a partial reflection of the urban demand for fuelwood as most of the registered producers supply the urban markets and over 12 million m 3 more are consumed in the rural areas. The price of charcoal has been increasing over the years and a bag costs about 14 USD almost while the price of gas is about USD 20 for a Kg cylinder. The production of gas and electricity only meets the demand of a minority of households and major urban centres. Only just over 80 kwh per capita of electricity is available hence the widespread use of generators of electricity from diesel in most rural towns. The production capacity of gas is 3 million m 3, with production almost reaching the full capacity. According to the evaluation of the biggest 100 companies in Mozambique in 2006, the energy sector is growing, with 18% increase in gas production of which almost 99% is exported, 11% increase electricity and 2% for renewable energies. Mozambique relies on imported fossil fuels to run its economy. For example, the imports of diesel and petrol reached respectively nearly 124 and 520 thousand m 3 (KPMG, 2003). The major market players in terms of distribution are led by PETROMOC with 35%, BP Mozambique (30%), Total (14%) with the rest shared by Petrogal, Mobil, Shell, PESS, CALTEX and Engen. The overall consumption of fossil fuels in the country is about 590,000 tons of oil products per year mostly diesel. From the point of view of (size) market this is considered to be very small. Hence the country s engagement in biofuels is seen as bringing an opportunity for independence of the country in terms of capacity to generate energy for internal consumption. In fact, PETROMOC (2008) states that the local market have the capacity to consume 100 thousand m 3 even at higher blending levels of 15-20%. Additionally, the consumption of fossil fuels comes at an increasingly high price up from less than 40 USD less than five years ago to over USD 130 in These prices affect the performance of the economy as it is one of the major expenses in the production and service sector. Therefore, it is critical for Mozambique to search for alternative and cheaper sources of energy. However, the excessive production capacity being sought in the country aims at meeting the needs of the foreign markets. While this may be 4 Cconversion of bags to volume of wood done by the author 5

6 positive in terms of generation of foreign exchange and improve the balance of payments, what is the opportunity cost? 3.2 THE POLICY AND LEGAL FRAMEWORK: CONTEXT AND GAP BETWEEN INTENTIONS AND PRACTICE Energy Policy The current policy framework includes the 1998 Energy Policy and the 2000 National Strategy for Energy. The objectives are as follows: ensure supply of energy at low cost; promote reforestation to increase the availability of biomass energy; promote investment in the development of various sources of energy such as forests, water, and natural gas; promote technologies for exploitation of alternative sources of energy such as solar and wind energy. The strategy for implementation of such policy objectives include interventions to improve availability of electricity 5 and increase distribution to the rural areas, exploitation of mineral coal and prospecting oil; promote sources of renewable energy products. Although not explicit the production of biofuels is a way contemplated in the last objective. However, recently there has been a significant interest of the government and pressure from multinationals to invest in biofuels. As a result the government had to start a more focused process of reflection and development of policy and legislation. The Decree No 63/2006 was the first regulatory instrument to provide some guidance on the import, distribution and commercialization of petrol products as well as explicit provisions to accommodate the possibility of production of bioenergy in the country. Concomitant to that, the Government of Mozambique has commissioned studies to look at the potential, viability as well as possible impact and sustainability of biofuels production in the country. These studies are to inform the content of the policy and strategy. According to PETROMOC (2008) the aim of the Biofuels strategy includes: o reduction of import of liquid fuels; widening the access to energy sources; o job creation opportunities; o diversification of community livelihood strategies hence being a vehicle for poverty reduction; o radically changing the agriculture paradigm, including food production, by creating or sharing basic infrastructures, establishing important synergies and enabling otherwise scarce flows of investment into the agribusiness; o creation of a set of valuable by-products like the co-generation of electricity, production of organic fertilizers and supply of human and animal feed proteins; o valuing the enormous and dormant agro-climatic potential of the country; o making good use of the geostrategic location of the country and respective irrigation, harbour and petroleum infrastructures; o making a significant contribution to the global effort for the mitigation of the environmental damages; o being part of the vast and ever-growing international biofuels market through its export; o and increasing the overall production capacity of the country. The biofuels assessment suggests some elements for the strategy and National Biofuels Programme (NBP) in Mozambique (Box 1). 5 Law on Electricity approved in 1997 (No 21/1997) 6

7 Box 1: Issues /areas that should be considered in the National Biofuels Programme Elements to be considered o Focus on establishment of a domestic market in the short term and create demand for biodiesel and bioethanol for transportation and industrial purposes. The strategy would be to progressively blend the bio and fossil fuels at relatively short intervals to stimulate the emergence of the necessary production capacity. o Investigate regional market opportunities, coordinate biofuels provisions, imports specifications of the different SADC countries as well as seek to establish partnerships with large international biofuel exporters. o Promote a diversity of feedstocks (such as rehabilitation of the coconut plantations, expansion of soy, sunflower, castor seed cultivation, jatropha, research on the African palm incentives for utilization of molasses and bagasses to produce ethanol, promote sweet sorghum and introduce small scale cassava processing) to limit, for example, the impact of price fluctuations while promoting the agricultural potential of the different agroecological zones in the country. o Introduce key policy incentives that include biofuel content for gasoline and diesel respectively starting in 2009 and 2012; premium over CIF (cost, insurance and freight) of imported fuels to be paid by blenders allowing sufficient returns for producers and farmers; exemption of tax on fuels for pure biofuels; mechanism for compensation to limit biofuels price variations; authorization of feedstocks for biofuels; introduce feed-in tariffs for electricity cogeneration facilities at biofule plants. Measure for socio-economic and environmental sustainability: o Guidelines for large-scale monoculture to reserve land for small-scale producers. o Small scale production of less than 3 million liters/year should be exempt from regulatory oversight. o Ensure technical and financial support to rural communities involved in biofuel production. o Utilization of multi-feedstock in particular non edible crops to safeguard food security. o Provide the necessary capacity for the Ministry of Environmental Affairs (MICOA) to conduct an objective analysis of the impact of biofuels on the environment. o Use land that has never been under cultivation or has laid fallow for long periods (since independence). o The government should monitor the development of standards for certification of biofuels. The suggested areas of focus for the strategy seem to be plausible in particular the need for diversification of feedstock which is essential in as far as mitigating environmental catastrophes (plagues, diseases, soil degradation) that can be associated with monoculture. Promotion of outgrower schemes or other forms of engagement of the local communities in the production chain is also a critical aspect for the strategy. One of the growing criticisms and scepticism of the biofuels is associated with the fear of substitution of crop production to meet food security with supply of raw materials for this emerging industry. An article on whether Africa should produce food to eat or run the cars is illustrative of that concern. Different opinions being voiced during this study in regards to this, most of which recognize the pertinence of the debate (food or fuel) but criticize the fact the discussion on the two issues is parallel, led by different institutions, using different fora instead of having a coherent, integrated and concomitant analysis. Another opinion is that any negative impact of biofuels in food production is likely to be temporary. Yet, other opinions deem such debate as dishonest on the basis that biofuel production will only use a fraction of land available for agriculture, therefore without a justifiable need for concern. However, the concern with biofuels clearly goes beyond the issue of area occupation and it extends to selection of crops, farming systems, participation of local communities, respect for their rights to land and other resources. For example, maize is staple food in the country, the majority of the population also consume fresh or processed cassava, and the coconut has been used for direct consumption or for production of oil. Henceforth, the change of the traditional use of any of these crops certainly should be accompanied by an analysis of the tradeoffs to facilitate an informed decision making 7

8 process. Therefore, the recommendations for the strategy (Box 1) establish provisions and incentives to avoid use of edible crops for biofuel production could not be more appropriate. However, there are also challenges in the materialization and viability of some of the suggestions. For example, the establishment of land that has not been used for as many years as preindependence does not necessarily mean that there has already been a satisfactory supply of land for food production. Most farmers in Mozambique cultivate small plots due to the lack of capacity in terms of finances to purchase inputs; there is limited agriculture extension and hence scanty access to improved technologies as well as the poor infrastructure for storage and transportation of surplus to markets. This means that improvement of the production of small holders can play an important role in increasing the land productivity but also it may stimulate demand for expansion of the agricultural land. Furthermore, the current second phase of the agricultural sector investment program (PROAGRI II) also establish the need to provide incentives and support for development of a robust commercial farming sector and development of agro-processing industries in the country. This needs a more thorough reflection and prioritisation of zoning (large scale) and conducting a thorough consultative process of stakeholders in particular the communities in the process of land allocation is paramount to minimizing the conflict in land use. Therefore, the development of the Biofuel Strategy should take this into account Land, Forestry and Reforestation General land use in the country As previously mentioned Mozambique has 784,089 Km 2 and 17,500 Km 2 of inland water. About 15% of the land is protected to conserve ecosystems and biodiversity. According to the recent national forest inventory by Marzoli (2007) 70% of the country or about 58.8 million ha is covered with forests and woodlands. However, forests cover only 40.1 million ha of which almost 27 million ha are of productive forests and 13 million are under conservation (forest reserves). Other sources of information indicate that the country has 36 million ha of arable land which is suitable both for agricultural crops as well as forest plantations. However, currently only 12 million ha are under agricultural cultivation meeting only about 80% of food needs while the forest plantations only cover about 24 thousand ha. There also indications that the country currently uses around 4.3 million hectares out of a total of 63.5 million hectares of potential arable land, or 6.6 per cent (FAO). Additional 41 million hectares of poor quality land are available for the production of energy crops that require few inputs and are not suitable for food production. Koetse and Alves (2005/6) indicate that there are about 7 million ha with potential for reforestation distributed as follows: Niassa (2.4 million ha), Zambezia (2.1 million ha), Nampula (1.5 million ha), Manica (860 thousand ha) and Sofala (120 thousand). These statistics give a hint on the actual and potential competition for land resources including agriculture, timber harvesting, livestock, tourism, expansion of urban areas, and supply of land for meeting paper and energy needs as well as alternative sources of wood products to reduce pressure on natural forests, among others. It is important to note that the Reforestation Strategy aims are silent in relation to production of biofuels from crops such as jatropha. Despite the fact that foreign analysis are quick to observe vast masses of available land as quoted in the previous paragraphs the government is taking caution. The allocation of land for biofuels has been suspended for months now pending the realization and approval of the national zoning exercise at scale of 1: by the Council of Ministers. Four classes of aptitude were considered (high, moderate, marginal and non-apt) for an initial pool of biofuel crops including sugarcane, sorghum, jatropha and cassava. This was presented for discussion by different 8

9 government bodies last May (2008). The scale used in this zoning exercise is object of controversy (among technical experts) particularly as far as the reliability of its use as a spatial guide on land suitability and availability. Notwithstanding that there is overall concordance that this is a necessary first step to support decision making and detailed studies including consultation with communities will be pursued by investors in order to establish a de facto availability of land. This is a very critical issue considered that already the land demand is reaching almost 3 million has and also there has to be caution as far as water demand is concerned. A brief account of the main legal instruments that needs to be taken into account in the decision making on land allocation for biofuels. Land, forestry and wildlife policies: provisions and some examples of conflicting allocation and use of land and challenges of community participation a) Good provisions The 2004 Constitution, the Land Policy and Law and all other sectoral policies such as Forestry and Wildlife Policies reaffirm that land and other resources belong to the State. The State has the prerogative to allocate leasehold rights to private investors for exploitation of resources for a period of maximum of 50 years renewable. The communities enjoy quasi perpetual rights to land as the right of occupancy (after 10 years) provides security of tenure and communities can ascertain collective rights through the process of delimitation, demarcation and subsequent issuance of a certificate of land use and improvement rights (DUAT). The law also recognizes the relevance of customary law in as far as it does not contravene equitable access to resources as a basic human right equally applicable to men and women and the often marginalized groups. All these provisions are safeguards for the rights of the local communities. Currently, there are about 300 communities with formal land rights in the country and the 2006 government statistics indicated that more than 4 million ha from 97 communities (DINATEF, 2006) had been entered in the national cadastre. The draft DINATEF 2007 report indicate that during the year there were community delimitations in about 1.6 million ha which can lead us to estimate roughly that thus far there may be nearly 10 million ha under community control. The forestry and wildlife policy draw significantly on the provisions of the land in recognizing collective rights and it provides an opportunity for communities to engage in participatory natural resources management, generate income and manage the resources in a sustainable manner. This is in fact a strategy adopted as the social objective of this policy. As a result there are currently 70 CBNRM initiatives that have been documented most of which have been accorded the DUAT as well as having licenses for harvesting resources for income generation. Further, the same policy provides for benefit sharing between the government and the communities. The latter have 20% of the revenues from royalties. The 2007 draft report of the National Directorate of Lands and Forestry indicates that there are more than 1000 communities that reside in areas that the exploitation of forestry and wildlife is taking place hence being potential beneficiaries. However, the pre-requisites limit access to the funds. Only 306 communities received over USD 804 thousand which corresponds to and average of little more than USD 2.6 thousand per community. There has been some debate on why this provision for sharing benefits between the state and communities does not extend to other sectors such as the mining, water for generation of electricity, fisheries etc. This issue seems also relevant to ponder about in the context of biofules production and community consultations. Other than threatening the land rights of the communities, investments were expected to take development opportunities to the communities through negotiation of private-community partnerships and fulfillment of the investor s Corporate Social Responsibility. If poverty reduction and promotion of rural development are not just political statements, then the National Strategy for Biofuels should provide guidelines on 9

10 partnerships including clarity on community benefits particularly employment opportunities. In regards to these, the type of jobs, skills required, capacity building etc should constitute important pillars contemplated in the decision making process for approval of investments. These are to create wealth for the country and not only extract and export the wealth while affecting the social organization of the communities and source of livelihoods. b) Implementation challenges The policies of land, forestry and wildlife are key in the decision making regarding the allocation of land for biofuels crops. Either productive land for food crops, land with forestry resources formally adjudicated to the local communities or perceived as inherently communal due to the statutory recognition of customary law in establishing the boundaries of community land, demands a transparent process of consultation for allocation of land to third parties. Further, the country has known an increase in gazetment of conservation areas within and beyond national boundaries. Apparently despite the good provision for protection of community rights, the process of community consultation preceding land allocation for investments is failing. Therefore, in terms of land there has to be a guide on where and how to allocate land for biofuels. Otherwise there is clearly going to be conflicts of use and between land users. One example of policy, process and perhaps political failure in relation to allocation of land for feedstock for biofuels happened in Gaza province (North of Maputo) where communities affected by the establishment of the Limpopo National Park were settled in an area that offered opportunities for developing community tourism activities as well as for grazing. This is the case of the communities that have been affected by the establishment of the Limpopo National Park under the Great Limpopo Transfrontier Park. It is almost a decade now since the signature of the agreement between the governments of Mozambique, South Africa and Zimbabwe to establish that new conservation approach (ecosystems beyond national boundaries). As a result of this process the communities affected have been leading unstable lives with successive consultations (post-decision!!) regarding the issues of resettlement, identification of suitable areas for the communities to carry on their traditional activities as well as accommodating the interests and socio-economic setting of the hosting communities. According to the TFCA authorities the negotiation of the resettlement has taken over 4 years. The map (Figure 1) is illustrative of wider conflicting allocation of land to communities and investors which are likely to multiply throughout the country in absence of a national land use planning policy, land use plan and zoning. ZIMBABWE Gonarezhou Zinave Banhine Limpopo MOCAMBIQUE Kruger SWAZILAND Legend Cubo CNC National Parks ± Limpopo Heartland Massingir Dam SOUTH AFRICA Kilometers Fig. 1 Area earmarked for a community nature conservancy to promote tourism activities (source: CONTOUR, 2006) 10

11 The Box 2 highlights of giving formal rights and the subsequent process of undermining community rights. The concept of community land delimitation, the devolution of natural resources management to community control is being challenged in practice as the interests of the investors overlap and in fact override acquired and formalized rights of the community. Box 2 The process of successive rights transfer from communities to investors Community rights and development plan The Limpopo Heartland is one of the areas of intervention of AWF which includes promoting sustainable management of interstitial areas between the protected areas in this case the Limpopo National Park, Banhine National Park, Zinave National Park, Gonaredzou National Park in Zimbabwe and Krueger National Park in South Africa. The communities of this case study are being allocated from the Limpopo National Park as indicated in the map. In some cases the communities had to be resettled to avoid human-wildlife conflicts but also to minimize land use conflicts such as farming and animal husbandry and wildlife-based tourism activities and conservation of biodiversity. Three communities (Cubo) were supported by the AFW to acquire the Land Use Certificate (DUAT) and the communities had already a strategic natural resources management plan (CONTOUR, 2006a) and a business plan (COUNTOUR, 2006b) detailing respectively the measures to be undertaken to harmonize the requirements of different wildlife species, control of soil erosion, water management etc and a plan of the type of economic initiatives to be implemented for the benefit of the community. The total area for which the land delimitation certificate was issued is over 100 thousand ha. After a zoning process 41 thousand ha were identified as suitable for community based tourism activities. Community rights transferred to game farming companies Paradoxically, after issuing DUAT for communities, three concessions for game farming were authorized and part of the land under community control transferred. In order to accommodate this change in rights, negotiations were underway to form joint-ventures between the community and private concessionaires. The business plan includes various scenarios of engagement of three investors with whom the Cubo community was in a process of negotiating joint ventures. Community rights transferred for a biofuels producing company A fourth investor (PROCANA) was allocated 30 thousand ha of land for production of sugar cane for bioethanol of which 20 thousand identified in the zoning process as pasture land were given to this company. As far as the community pasture land, some interviewees indicated that PROCANA has agreed to provide a limited area for intensive production of pasture and increased carrying capacity to cater for the community needs. What is left for community management? The community land was subsequently reduced to 10 thousand ha allegedly due its limited capacity to manage an extensive area (100 thousand ha). It is important to stress that both economic development through large scale investment and poverty reduction thought security of land resources for the local community are not mutually exclusive, but rather complementary. In fact, the process of securing resources rights by communities provides an opportunity for them to have a share 6 in a business and have tangible benefits by the virtue of having resources. The issue however is how consistent and informed is the government decision making process regarding land allocation and how objective is the resettlement processes in order to minimize the socio-economic disruptions of the affected people. The conflict between production of biofuels and land allocation for other land uses will also extend to forest areas, tourism areas, conservation area, smallholder farming or grazing areas 6 The signed (by community representatives and other authorities) minutes of the community consultation often highlight some of the concerns that the communities expect to address when endorsing investments. 11

12 among others. The Figure 2 illustrates again a potential conflict between production of biofuels in Cabo Delgado and the Quirimbas National Park which is managed by WWF. The distributing of production areas (yellow in the map) is commendable in terms of minimizing conflicts with communities and possibly with other uses such forest concessions. However, the location of one of the areas adjacent to the support/buffer zone of the QNP is likely to cause some conflicts particularly depending on the specific crops that will be grown in the area, their demand for water among other uses. Details about the Eco-energia company will be discussed in section 4. Fig. 2 Areas earmarked for the production of biofuels by one of the companies requesting ha in Cabo Delgado Province The conflicts in implementation of the forestry and wildlife policy did not start with biofuels. There are numerous examples countrywide. The 2007 annual draft report (DINATEF, 2008) indicates that there have been 76 land conflicts resulting with 76% occurring in the provinces of Tete, Cabo Delgado and Zambezia. The report points out several causes of conflicts among which the high demand for land for tourism investments in the coast, poor dissemination of the legislation to local communities, deficient community consultation processes, dispute over boundaries between communities and investors and non rigorous delimitation of areas (giving more land than authorized). However, there are other examples of conflict in decision made by the government and change of right given to local communities for the benefit of private entities. This clearly contravenes the policy and the legal framework. Chipanje Chetu Programme in Niassa province is a case in point. It is a CBNRM initiative facilitated by IUCN with support from Ford Foundation, the Netherlands government among other donors and fully backed by the provincial government for 6-7 years. In the process the community had acquired land use rights (DUAT), conducted an inventory of resources (timber and non timber), invested in controlling poaching and widespread 12

13 bushfires through training and equipment (e.g. bicycles, uniforms, radios, etc.) of community scouts, initiated income generating activities and had a partnership with a safari company which was already paying annual dividends distributed between the communities, local and provincial government as well as meeting part of the technical support hence moving towards self sufficiency and sustainability. However, since 2004/2005 there was a change, overlap or transfer of land rights to the benefit of the Lipilichi Wildness. Again the issue how the policy and law are applied other than disputing the need to bring investors in they genuinely aim to promote development. This case also illustrates that it is becoming almost a tradition for the government to overrule its decisions and undermine the rights of the local community. It may be right to give a benefit of doubt and consider that the transfers are done in good faith which is to promote rapid economic growth and creation of rural employment. This is certainly an undisputable and shared common goal. However, the policy provisions seem to create an illusion of inclusion for the communities who in the last instance they easily loose the rights. Monitoring the tradeoffs and the impact of these decisions is what constitutes a key missing link. The Reforestation strategy: aim, land availability targets The Reforestation Strategy yet to be approved acknowledges the area with potential for plantations but also the existing fragile ecosystems, water basins and dunes for conservation. It states its main aim as to establish an integrated industry to contribute to satisfying the increasing demand for paper in Mozambique and the world over, satisfy demand for timber as well as energy. This includes not only wood for domestic consumption in the rural and urban areas but also for curing tobacco, tea and for the ceramic and bakery industries. The strategy targets to promote plantations of large and small scale (by communities or outgrower schemes) to the magnitude of 2 million ha by It the process about 100 thousand jobs would be generated and raise almost USD 2 billion for the national economy. Reduction of deforestation of the natural forests of 20% by 2010 and substitution of 20% the consumption of firewood for the same period and contribute to poverty alleviation are considered to be the main targets of the plantations for energy. One important recommendation of this strategy is that a national zoning has to be undertaken to clearly identify land suitability. Land use planning and zoning has been discussed in many occasions and over many years and was strongly recommended particularly in the PROAGRI II (Natural Resources Management component) as an essential step to inform decision making about land allocation and optimal use. The significance of this recommends is further enhanced as it is an important tool for the harmonization of the land use planning and identification of suitable for biofuels productions and other economic activities. There is clearly a complementary role between the reforestation strategy and the biofuel strategy under development, but whether the involved in the process take this aspect into consideration is not clear. A piecemeal land use planning directed to specific activities such as reforestation, zoning of the costal area for tourism purposes, zoning for biofuels is clearly a waste of opportunity to undertake a comprehensive land use planning which will cost more but the long term benefits will definitely payoff Water, agriculture and the environment Water Similarly to land, forestry and wildlife, the water resources belong to the State, which reserves the rights to license the use and the margins of the rivers are subject to partial protection as stipulated in the land legislation. Water and sanitation is still one of the main challenges that the government has to address and many rural communities have limited access to clean drinking water. While there are different water requirements for different crops used as raw materials for production of biofuels, water 13

14 availability is a critical aspect in the identification of areas suitable for establishing the plantations and the processing plants. The Water Law (No 16/91) states that: (i) the available water should be used rationally to meet the demand by the local population and for economic development; (ii) the use of water for agricultural, industrial and for generation of hydro-electricity has to be regulated; (iii) the water supply for domestic consumption and sanitation is of utmost importance and priority in relation to any other uses; (iv) the use of water for private purposes in detriment of meeting demands of the local population should not be authorized; (v) water for irrigation should be used intensively maximizing its value and reduce losses; (vi) the industrial water users should ensure maintenance of quality, minimize pollution and in case that this happens they should observe the polluter s pay principle. The observation of the rights of the different users of water is of paramount importance in the process of decision making on land allocation. The location of PROCANA, for instance, near the Massingir Dam in Gaza and close to the tributary of the Limpopo River is strategic. The aim is to satisfy the water demand for sugar cane and other feedstock. This phenomenon is common. The existing and planned sugar producing companies are in areas with easy and abundant access to water. Examples include two sugar companies in the Incomati River in Maputo, the Buzi River and Zambezi in Sofala as well as many rivers distributed along the areas that Eco-energia is aiming to use in Cabo Delgado. The interview with the managers of Eco-energia indicated that the selection of Cabo Delgado (Figure 2) is related to the availability of water and land besides the good climate conditions all of which are conducive for sustainable production of biofuels without affecting the biodiversity. The investor maintains that will use degraded lands, will use crops with limited water requirements (Sweet Sorghum) and use of water efficient irrigation techniques. However, the company also plans to construct water retention infrastructures such as dams to be used also for generation of electricity. As it will be shown later, the Ministry of Housing and Public Works that host the water directorate is conspicuously absent from the interministerial committee on biofuels. Agriculture policy Mozambique is an agricultural based economy and this supplies nearly 100% of rural employment. The government of Mozambique places high priority to this sector as a vehicle to addressing the challenges of food insecurity, malnourishment and poverty. The Agricultural Policy has the following four main areas of intervention: (1) food security, (2) sustainable economic development, (3) reduction of the unemployment rate, (4) and poverty reduction. Mozambique has developed the second generation of the Agricultural Sector Investment Programme known as PROAGRI containing strategies and specific intervention areas in the sector to deliver on the policy objectives. Within that context, PROAGRI is part of a broader perspective to improving agriculture as well as endow the majority of the households, particularly rural households with the necessary means to pursue the goals of reducing poverty and food insecurity (MADER, 2004). Therefore, the objective of PROAGRI II is to contribute to the these two goals through the support of the smallholder and the commercial farmers to increase the agricultural productivity, stimulate the agri-processing industry and commercialization of the produce. The program also emphasizes the need to ensure sustainable use and management of the natural resources. While the smallholder farming sector is considered to be rich in diversity of land sizes, crops and final use of the produce, the commercial farming sector was defined as The Front Runners for Agricultural Development. For both categories the major areas of support include markets, provision of financial services, technology, markets and access to natural resources. 14

15 A major component of the biofuel production comprise of agricultural activities for production of feedstock, hence the potential to contribute or undermine the efforts to expand the commercial farming sector as well as ensure that high potential land for food crops is actually allocated to that purpose. Environmental policy The government of Mozambique has defined important tools to ensure that economic activities adhere to in order to guarantee the environmental sustainability of their businesses. The Decree No 45/2004 substituted the Decree 76/1998 regulates the process of Environmental Impact Assessment; the Decree 130/2006 regulates public participation in the evaluation of the studies and monitoring the implementation; the Decree 129/2006 provide general guidelines for the EIA studies; and, the Decree 32/2003 focus on Environmental Auditing. Therefore, the environmental legal framework offers a comprehensive set of process and opportunities for adherence to acceptable environmental standards and for monitoring the implementation of the plans of environmental management. However, the limited resources disposable to the government constitute an obstacle for efficient implementation of environmental safeguards. The Decree 39/2003 for industrial licensing classifies the industries in four categories defined according to the level of investment. The micro-industries are defined as those with less than USD 25 thousand investment and less than 25 employees while large scale industries have more than USD 10 million investment and more than 250 employees. The Regulation of the EIA also defines categories of investment requiring different levels of detail of analysis of their impacts for environmental licensing and monitoring. The categories A and B are expected to result in significant impact on fragile ecosystems such as protected areas, natural forests, wetlands, investments that may require resettlement of populations, areas with high demand for land and conflict over use and users, areas along rivers and other inland water courses that sustain people s livelihoods. Therefore, they require detailed EIA studies and monitoring process and the difference between A and B is simply in the scale of the impact. Agriculture activities under category A include investments in cropland of more than 350 ha for irrigation and over 1000 ha for rainfed agriculture; conversion of agricultural land, introduction of new or exotic species. Energy related initiatives falling in the same category (A) do not include an explicit reference to biofuels, however the storage of any liquid fuels is deemed to warrant a comprehensive EIA. Therefore, given the scale of production of biofuels by large companies in terms of area, requirement of water, possible harvesting of natural vegetation and use of agrochemicals, etc. an environmental management plan should be developed and strictly monitored. The investments under Category C are considered to cause negligible or non-existent negative environmental impacts. This may include irrigated agriculture of less than 100 ha or clear-cutting of natural vegetation in less than 200 ha. Again here in most cases what is crucial to look at cumulative impacts of many, small continuous activities. This is likely to be the case of the outgrower schemes either for producing sugar, biofuels feedstock or any other activity. The major concerns of the environmental authorities include the quantity of water likely to be used in the production of biofuels and possible competition with water requirements for food crop production and consumption of humans and domestic animals. The discharge of effluents may damage the quality of soil and water resources hence affecting the aquatic life; the apparent limited access to information on associated socio-economic and environmental costs and benefits influence negatively the process of consultation of the local communities. In order to have clear guidelines on environmental management, a comprehensive zoning and strategic environmental 15

16 assessment would be a useful complementary instrument to current efforts to zone areas that can potentially be used for biofuels. During the visit to the Ministry of Environmental Affairs it was possible to search for EIA study reports that might have been submitted during the last years either for expansion of areas of cultivation of sugar cane by the companies currently operating in the country or related to new investments in the area of biofuels. It was not possible to find the EIA of PROCANA investment as the first ever large scale producing company formally approved to operate as such. This would have shaded some light on how detailed the studies are and what are the environmental concerns being raised as well as the mitigation measures envisaged. However, two studies on environmental pre-viability analysis for expansion of two sugar companies in the Maputo province (Açucareira de Maragra and Açucareira de Xinavane) were identified. Further, two EIA studies for Açucareira de Moçambique one concerning the expansion of the area of production of sugar cane and the processing plant in Sofala province. The common issues rose in the case of Maputo (Impacto, 2006, 2007) that need attention and detailed study in the EIA include: Water pollution including risk of contamination of ground water due to use of agrochemicals (fertilizers, pesticides, herbicides etc.) in the process of sugar cane production. Conflict between the various users of water along the Incomati basin where many small and medium scale agricultural activities are taking place as well as the two sugar companies. Land use change and degradation of habitats. Air pollution. Contamination of soils due to poor management of solid waste, oil, lubricants and fuel used during the process of production. The environmental impacts identified in the above case are also similar to those identified in the case of establishment of new areas of plantation of sugar cane in the Açucareira de Moçambique (CEPLAGA, 2006). The additional impacts observed in this case (detailed EIA) include soil erosion, obstruction of drainage canals due to sedimentation, change of water table level, proliferation of diseases and plaques and water borne diseases due to water contamination. In the case of the sugar production plant the environmental impacts include also water, soil, air and noise pollution (CEPLAGA, 2007). Overall the studies indicate positive socio-economic impacts particularly the generation of employment and provision of some utilities such as water and electricity to the employees. However, in the case of the Maputo sugar companies, particularly Maragra a socio-cultural impact highlighted the possible proliferation of HIV/AIDS as a result of improved economic conditions which lead men to become polygamous. This aspect deserves an important consideration in all new investments in biofuels where migration may be stimulated particularly due to large scale of some investments that cannot be sustained by local labour (unskilled) but also due to the necessary migration of skilled workers. The examples of studies here presented give an idea of whether the legal provisions are being observed or not. As usual the major policy challenge lies on monitoring implementation as there is tendency for investors to comply with requirements for producing management plan solely to ascertain the issuing of licenses to operate. The international pressure for meeting acceptable standards in the process of production and marketing of biofuels is likely to play a key role in implementation of environmental safeguards. The European Union developed an Energy Policy which will determine the penetration of biofuels in that market. Mozambique has been analyzing the EU environmental indicators and a seminar was organized to discuss the domestication and harmonization of 16

17 the sustainability criteria with local legislation. The EU standards include the following principles for biofuels production: (i) positive greenhouse gas balance of the production chain and application of biomass; (ii) minimum impact of biomass production on important carbon sinks in both vegetation and soil; (iii) production of biomass should not compromise food security and other needs such as energy supply, medicines and construction materials; (iv) minimum impact on protected biodiversity and rather strengthen it where possible; (v) maintain or improve the quality of soil in the production and processing of biomass; (vi) minimize the depletion of surface and ground water and maintain/improve water quality; (vii) improve or maintain the air quality in the process of production and processing of biomass; (viii) production of biomass must contribute to improvement of local livelihoods; (ix) ensure contribution towards the social wellbeing of the employees and local population. These principles are of interest of both the government and also the private investors in order to ensure that the use of resources in the country will result in positive contribution to poverty reduction, economic growth and environmental sustainability. 3.4 THE INSTITUTIONAL ARRANGEMENT FOR PRODUCTION OF BIOFUELS (RESEARCH, PRODUCERS OF LARGE AND SMALL SCALE, SUPPORT SERVICES, INCENTIVES) The institutional arrangement is of paramount importance given the complexities of the production of biofuels. As discussed in the previous sections many resources are likely to be impacted on, positively or otherwise. Land, food security, water, environmental impacts of the processes of production of raw materials, processing and transportation, creation of employment, disruption of socio-economic cohesion due to need for resettlement of communities among others. There are already existing mechanisms that have been engaging multi-sector stakeholders from government, from the private sector and NGOs mostly supporting community development and environmental management initiatives, some of the important institutions include: the National Council for Sustainable Development (CONDES) established by the Law 20/97 as a consultative organ of the Council of Ministers for coordination and effective integration of environmental considerations in all development activities in the country. Besides providing views on policy matters, the organ was also charged with discussing incentives to stimulate the adherence of the economic agents to the principles and practices of sustainable management of natural resources and environment in the country. The Decree 40/2000 the composition of this organ which include nine ministries among which of energy, environmental affairs, public works and housing, agriculture and rural development. The civil society, environmental experts and others can be invited to participate in relevant sessions. CONDES is presided by the Prime- Minister. This is indeed well placed to discuss high policy level issues such as the biofuels policy, strategy and action plan. The National Council of Water created by the Law 16/91 is charged with among others, the task of informing the Council of Ministers regarding any critical and recurrent aspects that affect the development and conservation of water resources in the country; detect macroeconomic and macro-institutional factors that affect the development and use of water resources. The same law creates the Regional (South, Centre, Zambezi and North) Water Administration Authorities which are responsible for approving concessions and licenses for water use rights and discharge of effluents, manage water 17

18 allocation and minimize conflicts over use. Furthermore, the Scientific Council of Water presided by the Ministry of Science and Technology was established in 2004/5 to provide leadership in the research and policy analysis of water resources. With this institutional framework there is a strong basis for coordination, analysis of possible macro-scale impacts of water use in the country and advice the government on land allocation and approval of investments on biofuels. The government has created an inter-ministerial biofuels (technical) group comprising of the energy, agriculture, industry and commerce, science and technology, environment, finance, sustainable development council (CONDES), investment promotion (CEPAGRI and CPI) as well as the oil distribution (PETROMOC) and electricity (EDM) supply companies. The existence of this commission and working groups on development of raw materials, sustainability criteria and development models, legal and fiscal framework and project evaluation is essential for coordinating policy development issues, research needs as well as overall development potential. However, it will be important in the context of the current study to examine the extent to which the concerns over the involvement of local farmers to ensuring equitable participation and benefit sharing are discussed. FUNAE is a National Fund for Energy which supports projects of alternative sources of energy such as biogas in Maputo as well as supporting the development and adoption of technologies at local level. The major gap 7 in this institutional arrangement is luck of explicit integration of the National Water Council or the National Directorate of Water and key civil society representatives dealing with conservation of resources, support of local development and also the association of the private sector for environmental management. It is important to have such a multi-sectoral institution to bring perspectives on costs and benefits as well as perspectives of existing and potential interested and affected parties. Civil society organizations concerned with sustainable management of environment and natural resources as well as monitoring of implementation of macroeconomic policies and programs such as the poverty reduction strategies are critical to keep a watch on development of biofuels in the country and its impacts. o FEMA is a private sector forum for environmental management. It has been playing a key role in assisting its membership to adhere to international environmental standards, to attain the appropriate certification of products, it has promoted the engagement of the private sector in corporate social responsibility and brought examples from other parts of the world to demonstrate how that pays (as profit it is the main driver of the investors), and recently commissioned a study and organized a seminar on biofuels. In the seminar some rather pertinent issues were raised. For example, the land availability for food and biofuel crops, analysis of varieties of crops (such as jatropha, sunflower, soy, African palm for biodiesel and cassava and sugarcane for biofuels) adapted to the different ecological zones and a critical analysis on possible competition for water resources. There was a strong call for clear definition of targets, analysis of possible competition of labour 8 availability for food production, production 7 As far as the field study could establish 8 Although there is apparently high level of employment, it is important to consider that in some sites there may actually be shortage which will require migration of workers from other sites. The Ministry of 18

19 of cash crops such as cotton, tobacco and others and, the labour demand for biofuel; utilization of the marginal and degraded areas for plantation of biofuel crops to have a net positive impact in the sequestration of carbon. This forum is also part of the World Council for Sustainable Development, hence constitute an important party and partner that the government ought to bring on board on the policy discussions. o G20 is a forum of NGOs working on land rights, local development and other areas. This forum has been monitoring the implementation of the PRSP in the country and can be very instrumental in monitoring the poverty and environmental goals in the context of biofuels. o CBNRM forum, Friends of the Forest and other conservation organizations such as IUCN and WWF have been playing a key role in the processes of formulation and implementation of policies for engagement of communities in natural resources management and also in the establishment and management of protected areas (fragile ecosystems such as wetlands and overall conservation of biodiversity). The civil society is a very important partner who actually contributes significantly to the delivery of the policies at local level. Therefore, it should participate in the development of the biofuel policy and strategy as it can also bring field level concerns as well as playing a role in information dissemination and monitor the impacts on the ground. Training and research institutions particularly the Eduardo Mondlane University play a key role in the generation of knowledge. Some of the research gaps include the overall (realistic) trends in consumption of biomass energy and fossil fuels in the country and alternative energies, analysis of land use cover change, technologies for improved efficiency of use of biomass. The university has started to work studies related to biofuel production in the country. Currently, the Faculty of Agronomy and Forestry Engineering is engaged in various aspects of research such as the case of pests and diseases associated with jathropha which can affect other species of the genera Euphorbiacea. The Faculty is collaborating with Wageninger University in a one year regional research initiative to analyse the interaction between production of biomass and change in use and land cover as well as the economic impacts. Another initiative, involving the above mentioned institutions and the University of Viçosa in Brasil, is a four year research to develop production and processing models as well as scenarios of socio-economic and environmental implications. The Faculty of Engineering, Chemistry Department hosts the President of the Scientific Council of Energy who is part of a working group that is to undertake studies in the different provinces. This Faculty is primarily responsible for the industrial component of biofuels production, mostly research on technologies for small scale production (gasification of carcasses of coconut, water from wood and cashew nut processing; biogas, improved stoves for utilization of biomass energy, etc.). The Faculty of Engineering has also engaged in collaborative research with the University of Dar es Salam in a SAREC supported programme. In addition, a high level training programme to build capacity on research of various technologies for production of alternative fuels is being implemented. The International Institute of Tropical Agriculture is also working with the Mozambique Institute of Agriculture Research (IIAM) on the improvement of cassava for production of biofuels. Planning and development is also conducting a study using a General Equilibrium Model to establish the impact of biofuels in food crop production including an analysis of the marginal productivity of labour. 19

20 This shows that in as far as research is concerned, there are a number of ongoing initiatives, but whether there is coordination and focus on applied science is not clear. At this stage of establishment of a policy framework and instruments to regulate this emerging area (in the national context) it is imperative to bring in a large spectrum of institutions. The Box 3 below highlights some of the critical links that should complement the inter-ministerial committee on biofuels. Box 3 The missing/weak links in the institutional framework Ministry of Agriculture Ministry of Energy Environment, CONDES and other ministries Biofuels Inter-ministerial Committee Civil Society National Council of Water Research institutions The external players comprise of donors facilitating or supporting the policy development and various investors seeking to explore the opportunities particularly the apparent existence of large tracks of unused land in Mozambique. The donors currently involved include the World Bank, the Italian government, the German government through GTZ, the Netherlands, the EU and the Finnish. The initiated (April 2008) a study in Mozambique and Zambia to look at the prospects for implementing the Mbono (Jatropha curcas in Kiswahili) Concept in which Preseco Ltd can form partnerships/interventions in the region (including Kenya, Tanzania and Uganda). The objectives of the study include an analysis of ecological, technical and socio-economic information in the countries as well as study and develop alternative concepts for biofuel production and export. The interests in this area include companies from Great Britain, Spain, Portugal, Brazil, India, South Africa, Scandinavia, Italy and Canada. These institutions have an important role to play in guiding the process in terms of observation of social and environmental ethics in the production of biofuels and in fact should contribute to ensure that adequate legislation is in place before occupying large extensions of land. Although it seems too much to expect investors not to explore the weaknesses in the system to acquire resources but the external market and the enforcement of certification of the produce as well as intervention of the civil society should stimulate the investors to comply with norms and good practices. 20