Zimbabwe's noble biodiesel effort was doomed from the start

Jun 15, 2011

There is global excitement about the potential of various kinds of biodiesel as replacements for the fossil fuel kind. Chronic fuel shortages over several years of the last decade also made Zimbabwe jump on the biodiesel bandwagon, at least halfheartedly. But now a once much-hyped biodiesel project ed by the government looks on the brink of folding up, if it hasn't done so already. 

Excerpts from an article in The Standard of 12 June:

After almost five years of on-and-off operations, Zimbabwe’s giant biodiesel plant faces prolonged closure after the central bank pulled out of the project. Launched amid pomp and fanfare, the project was touted as the panacea to the country’s fuel crisis.

The Reserve Bank of Zimbabwe (RBZ) has already invited bids for its 50% shareholding in Transload (Pvt) Limited, a fuel manufacturing company that never made an impact despite its glamorous launch in 2007. But investment and economic analysts last week said no local investor would want to put money in such “a white elephant.”

The biodiesel plant is a joint venture between Zimbabwe and Yuon Woo Investments of South Korea. Government mooted the project when the country was experiencing a fuel crisis that President Robert Mugabe’s administration blamed on sanctions imposed on the country by the West.

Labour and Economic Development Research Institute of Zimbabwe (Ledriz) economist Nyasha Muchichwa said the environment was not ripe for local investors to put money into such a project.

Last year, (Transload Bio-diesel Company of Zimbabwe managing director Douglas Musiiwa ) told The Standard that the project needed US$650 000 capital injection to cover cost of seed, transportation and toll-crushing to extract cooking oil as well as salaries before resumption of any operations.

It is sad that the scepticism expressed here about this project in August 2007 was justified. The 'launching' of the project in November 2007 was also followed here, as was a follow up story a year later of how little biodiesel was coming out of the post-launch plant.

The Standard then gets commentary on this latest saga from a number of economists, one of whom seemed to be oblivious of the uses of the fuel, saying, 'there is no market for the biodiesel fuel.'

Biodiesel on an industrial scale may be a relatively new concept, with a lot of the bugs needing to be yet worked out, but it is here to stay. The idea of investing in biofuel was a good one for Zimbabwe, but little attention was paid to producing enough of the crops from which to extract the biodiesel, a fatal error from the start. All the other problems the economy experienced between about 2007 and 2009 only compounded that basic error for the project. There is also the issue that when world oil prices are considered low and stable, biodiesel looks less attractive.      

Investment in alternative fuels makes sense for oil-less countries like Zimbabwe, even if for the long term rather than for the immediate or short term. The country once had a successful sugarcane-ethanol project for mixing with petrol, and a new ethanol-generation project is reportedly nearing completion. A well-planned biodiesel effort would have one of several ways for the country to decrease its absolute dependence on imported fuel.

The idea of biodiesel will not die with the failure of this initiative. It will be revived in future by other people and in very different times. Unfortunately it will be one more example of the country making three steps back before making one step forward


Post a Comment