‘De-risk’ the wood energy sector to unleash green growth
With population growth and urbanization, the demand for energy from trees is growing rapidly around the world. This demand presents a golden opportunity for wood energy be a force for energy security, sustainable development and greener economies. But this exciting potential can only be realized when the wood energy sector, particularly the one in sub-Saharan Africa, is ‘de-risked’ to become orderly, legitimate and sustainable.
A special event at the recent XIV World Forestry Congress (7 to 11 September, Durban, South Africa) saw a high-level panel of experts discuss the situation of woodfuel and charcoal production, trade and consumption around the world, with a particular focus on Africa. The event titled “More than heat! Wood energy for the future,” went beyond wood as a household energy resource, to its potential—as a modern fuel—to power green growth for national economies.
The sub-Saharan African wood and charcoal sectors are particularly ‘risky’. Even though they are worth billions of dollars annually, they are run mostly informally and often illegally, largely out of the reach of regulatory and tax instruments.
De-risking would involve making the production and trade in woodfuel and charcoal more transparent and accountable. Policies and official controls for the sector would include smart revenue collection systems. Sustainable wood energy would also enter national planning as part of the renewable energy options for green development.
Senior representatives from the World Bank and the International Finance Corporation (IFC), agroforestry research, academia, NGOs and the private sector spoke at the event.
Introducing the session, chair Ms Eva Müller, Director of Forest Economics, Policy and Products with the Food and Agriculture Organization of the United Nations (FAO) said de-risking the wood energy sector would take a change in people’s perceptions of wood and charcoal as a ‘poor man’s fuel.’
In fact, wood is truly a global energy resource. It is important from the kitchens of the rural poor in remote areas of sub-Saharan Africa to sophisticated power-generating plants in industrialized nations in Asia and the global North. According to panelist Dolf Gielen, Director of IRENA Innovation and Technology Centre, three-quarters of the world’s bioenergy comes from wood from cultivated and natural forests.
Once countries can see wood as a global renewable energy resource worthy of serious policy attention, they will take the steps to regulate and legalize its production and trade, said Eduardo Rojas Briales, Professor Polytechnic University of Valencia. “An enabling framework for good governance of woodfuel production and use is the prerequisite for the development of the sector,” he stated.
Those sub-Saharan African countries that will take the radical steps needed to regulate wood energy and make it more sustainable stand to gain rich rewards, the event heard. These gains including greater energy security for their citizens (which is related to food security), tax revenues, development funding and more equitable and green growth.
In the panel moderated by Mr James Astill, political editor with the Economist, the speakers made a clarion call for a woodfuel and charcoal sector in sub-Saharan Africa that is transparent, legal and regulated. Panelists also discussed a vision for industrial woodfuel use in developing countries.
A de-risked wood fuel and charcoal sector in sub-Saharan Africa countries would bring numerous benefits, including:
- Evidence-based policy-making. Ms Paula Caballero, Senior Director for the Environment and Natural Resources Global Practice at the World Bank, said the World Bank estimates the charcoal sectors of Kenya, Dar es Salaam, Malawi and Rwanda to be respectively, worth 450, 350, 81 and 77 million US dollars annually. But because of the sector’s “informality—commonly even illegality,” no-one knows the actual value of the sector, she said. Figuring out the actual value of the wood energy sector, including the lucrative charcoal trade in African countries, would be a starting point for relevant policy-making. Accurate knowledge of the size of the sector and the actors in it would also allow strategic planning based on countries’ energy-need projections for the future.
- Tax revenue. Businesses involved in a formalized wood energy sector would be taxed like any other legitimate sector, bringing in significant new revenues to countries’ budgets. These taxes could then be re-invested in sustainable natural resources management and other development programmes.
- Energy security. At the household level, a sustainable wood energy sector would contribute towards countries’ ability to ‘ensure access to affordable, reliable, sustainable, and modern energy for all.’ This is Sustainable Development Goal No. 7 (SDG7).
- Empowering rural people. Citizens across the board, including small producers, would be able to participate equitably in a de-risked wood energy sector. World Agroforestry Centre (ICRAF) director general Dr Tony Simons said with the right political attention, the sector could become one that empowers rural people.
- Reducing waste and health risks. Panelist Ms Wanjira Mathai, director at the Wangari Maathai Institute and the Partnerships for Women Entrepreneurs in Renewables (wPOWER), said a sustainable wood energy sector would necessarily feature more efficient charcoal-making kilns and cookstoves, which would reduce wastage and directly lower the health risks associated with indoor air pollution.
- Employment. Production of wood fuel could be incentivized as an economic option for people, creating employment. More people growing trees in woodlots would have the added advantage of relieving rural people of some of the burden of collecting firewood, a chore that disproportionately falls on women and girls in the developing world.
- Curbing deforestation and ecosystem degradation. The challenges of deforestation due to charcoal production, particularly rife in East Africa’s drylands, could be tackled if the woodfuel sector were transparent. Suitable incentives and disincentives would be instituted to stop the destruction of valuable forest resources from woodfuel and charcoal production. In this way, wood fuel regulation would help preserve forests and biodiversity. Furthermore, and the carbon stored in trees and forests curbs greenhouse gas emissions related to climate change.
- Industrialization. Wood and charcoal are important industrial fuels, powering industries from tea-processing to chemical manufacturing factories. A legal and sustainable wood fuel industry would mitigate energy-related risks to such industries, leading to their growth.
- Trade in wood biomass. There is already a booming cross-continental trade and large-scale use of wood pellets for power generation and district heating in industrialized countries. According to panelist Dolf Gielen of Innovation and Technology Centre (IRENA), biomass residues could generate electricity for one million homes in Cameroon, Ghana and Uganda. Besides home consumption, formal trade in wood energy residues could become a valuable foreign exchange earner.
- Research and development. In addition to providing energy, a functional woodfuel sector could attract investments into the research necessary to develop an exciting wood-based chemical industry. With the right technology, wood byproducts, such as sawdust, can be converted into a wide array of sophisticated compounds with high market value. Panelist Mr. Paulo César Pavan, a chemist and products and processes development manager at the Technology Center, Fibria Brasil, explained that wood cellulose, for instance, can be converted into precursors of high-value compounds such as xylitol, a common sweetener, and furfural, a major industrial and agricultural chemical, among many others.
- Development funding. Mr David Campbell Gibson, senior environmental specialist with the International Finance Corporation (IFC) said a transparent, legal and orderly wood fuel sector could attract development funding for developing countries. Global development partners as well as private-sector investors would then be able to partner with the countries in growing their wood energy sectors. Such funding could be put towards related projects to contribute to sustainable economic growth.
In his closing remarks, Madagascar’s Minister HE Ralava Beboarimisa, Minister for Environment, Ecology, Forests and the Sea of the Republic of Madagascar, called on the FAO to “consider making sustainable wood energy one of its priorities in Africa.” A first step towards this, he said, would be the formation of an African initiative on wood energy.
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Neufeldt, H., Langford, K., Fuller, J., Iiyama, M., Dobie, P. 2015. From transition fuel to viable energy source: improving sustainability in the sub-Saharan charcoal sector. ICRAF Working Paper No. 196. Nairobi, World Agroforestry Centre.
ICRAF Technical Brief 3: Mara ecosystem threatened by charcoal production in Nyakweri Forest and its environs
ICRAF Policy Brief 28: Developing sustainable tree-based bioenergy systems in sub-Saharan Africa