Ethanol Cooking Fuel in Kenya

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Revision as of 10:41, 28 October 2019 by ***** (***** | *****) (→‎Kenya's Current Cooking Fuel Situation)

 Overview

Ethanol Cooking Fuel, is a renewable clean liquid biofuel which can be distilled from starch and used as a Cooking Fuels. This article is based on the June 2018 Dalberg Report, commissioned by SouthSouthNorth: Scaling up clean cooking in urban Kenya with LPG & Bio-ethanol: A market and policy analysis, and specifically reflects on how Ethanol Cooking Fuel fits into the Kenyan cooking fuel market, as well as the challenges and opportunities it presents.[1]

 

Kenya's Current Cooking Fuel Situation

</div> In Kenya, the majority of the population cooks with dirty (smoke and soot producing) cooking fuels which create broader environmental issues and specific health issues at the household level. Currently, kerosene, charcoal and firewood dominate the cooking fuel market[1] – all of which are considered dirty cooking fuels[1]. The Government of Kenya has recognised the need to shift to cleaner cooking fuels in an attempt to reduce negative health and environmental impacts. Through a reduction in greenhouse gas emissions, a shift to the use of ethanol cooking fuel would be a significant contributor to Kenya's Intended Nationally Determined Contributions (INDC).[1]

 

Liquefied Petroleum Gas (LPG), a clean fuel option, is the better-known clean cooking fuel alternative in Kenya. Little emphasis has been placed on Ethanol Cooking Fuel as a viable option for a clean and easy-to-use cooking fuel in Kenya[1], but has recently received interest from private sector players, such as KOKO Networks, a technology-solution company in Nairobi which dispenses Ethanol Cooking Fuel through fuel ATMs, called KOKOpoints[2].  In particular, Ethanol Cooking Fuel is seen as capable of scaling effectively to serve the needs of the lower-income segment of the urban population as Liquefied Petroleum Gas replaces dirty cooking fuels of higher-income users[1]. This capability is underlined by the decentralised distribution mechanism being applied in the Ethanol Version 2.0 business model[1] and the substantial savings in necessary capex to scale the model[1], which provides the backbone for distribution[1].

The recent report, conducted by Dalberg, assessed the Kenyan household cooking fuel market across economic, health and environmental criteria. The findings showed that Kenyans who currently pay for their cooking fuel live in urban Kenya, while the majority of rural Kenyans use gathered wood. Charcoal sold in urban areas and rural wood gathering contribute significantly to deforestation. Referring specifically to urban Kenya, Kerosene is widely available, and is currently the cheapest cooking fuel available[1]. Charcoal is also widely available but has a poverty premium due to the fact that buying small amounts costs 20 – 30 % more than buying in bulk[1]. Liquefied Petroleum Gas is currently being promoted by the Government of Kenya, with a zero-VAT rating[3], but is still largely unafforable to the lower-income population[1]. More recently, The Kenyan Government has been supportive, with a zero-VAT rating on Ethanol Cooking Fuel having been proposed[4]. The result will be a boost for Ethanol as the least expensive replacement option for dirty fuels. 

 

Kenya's Ethanol Cooking Fuel Context 

Ethanol Cooking Fuel began being used as a fuel produced by farmers during World War II. In the late 20th Century it became popular in the Western World as a recreational fuel for activities such as camping[1]. The early 21st Century saw the use of ethanol cooking fuel in refugee camps in East Africa and in more recent years, the first commercial ventures of Version 1.0 Ethanol Cooking Fuel – a centralised boteling and retail model – have been used in many African countries, while the first Version 2.0 Ethanol Cooking Fuel commercial venture was launched in Nairobi in 2017[1].

 

Ethanol Cooking Fuel in Kenya: Socio-economic, Environmental and Health issues

In terms of environmental impact, switching from kerosene and charcoal to Clean Cooking Fuel can reduce greenhouse gas emissions by 0.7 - 3.3 tonnes per household per year, respectively and slow down deforestation, a major contributor to land degradation[1]. From a health and well-being perspective, switching to Clean Cooking Fuel reduces the exposure to indoor air pollution[1]. Furthermore, a shift to Ethanol as Clean Cooking Fuel presents economic opportunity for Kenya, by providing future growth prospects in the bioethanol production sector, which could lead to significant job creation across the value chain[1][5] and positive balance-of payment outcomes. This will require demand for bioethanol to grow, which requires enabling the sector through removing policy and tax barriers (discussed further in section key challenges & recommendations). Socio-economically, the shift to Ethanol Cooking Fuel (ECF) also enables lower income people to access smaller volumes, making it more affordable, as well as reducing time spent collecting fuel per household (mostly for women)[1]. This accessiblity has been enabled by the KOKO Networks business model. 

 

A transition to ECF in Kenya, would help towards achieving the Sustainable Development Goals (SDGs) 3, 5, 7 and 13[1]:

  • SDG 3: Good Health and Well-being
  • SDG 5: Gender Equality
  • SDG 7: Afforable and Clean Energy
  • SDG 13: Climate Action

 (See also Energy and the Sustainable Development Goals)

 


Key Challenges & Recommendations

At the time publishing (June 2018), the Dalberg report stated that Kenya is ranked below other sub-saharan African countries in terms of Ethanol Cooking Fuel friendly policy[1]. Its cost in Kenya is inflated by 25% import tariffs, but, as mentioned, the Government of Kenya has shown support to grant it a zero-VAT rating. In order for Ethanol Cooking Fuel to compete with other cooking fuels, similar steps (in the form of favourable tariff treatment) are needed to level the playing field. Despite Liquified Petroleum Gas being an existing clean cooking fuel option with a zero-VAT rating[1], it is currently only afforable to a the (relatively) higher-income of the target urban population. Overcoming the challenge of tariffs on Ethanol Cooking Fuel will together with Liquefied Petroleum Gas, enable the affordability for the necessary shift to clean cooking fuels[1] across the whole of the target population.

In order for the Ethanol Cooking Fuel sector to grow in Kenya, investors will want to see a demand track record. According to the Dalberg report, to create this demand and accelerate the Ethanol Cooking Fuel market, a phased approach is required[1].The Government of Kenya will need to implement further tax concessions to make Ethanol Cooking Fuel more competitive and therefore help drive the demand, consequently driving local supply. Fortunately, Ethanol Cooking Fuel can leverage existing infrastructure which represents an opportunity for the industry to move rapidly to scale[1].

 

It was recommended in the Dalberg report[1] that the Government of Kenya takes the following steps to enable the shift to clean cooking fuel in Kenya (for the sake of this article, Ethanol Cooking Fuel):

  • grant bioethanol a Zero-VAT rating: which, to Kenya’s credit is already underway
  • remove duties and other taxes on imports: which is currently under discussion
  • establish and enforce safety and quality standards through regulation

 

Conclusion 

Ethanol Cooking Fuel presents a viable alternative cooking fuel option for Kenyans who currently pay for their cooking fuel, particularly for the lower-income urban population. This change represents a win-win opportunity for Kenya to contribute towards the Sustainable Development Goals and its Nationally Determined Contribution. The Government of Kenya has been proactive in promoting clean fuels, and an opportunitiy remains to eliminate the remaining barriers to drive the adoption of clean cooking fuels, and reap significant poverty-alleviation, economic, environmental and health benefits.  



Further Information



References

  1. ↑ 1.00 1.01 1.02 1.03 1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21 1.22 1.23 1.24 Dalberg. (2018) Scaling up clean cooking in urban Kenya with LPG & Bio-ethanol: A market and policy analysis. Available at: https://southsouthnorth.org/wp-content/uploads/2018/11/Scaling-up-clean-cooking-in-urban-Kenya-with-LPG-and-Bio-ethanol.pdf (Accessed: 1 September 2019). Cite error: Invalid <ref> tag; name "Dalberg. (2018) Scaling up clean cooking in urban Kenya with LPG & Bio-ethanol: A market and policy analysis. Available at: https://southsouthnorth.org/wp-content/uploads/2018/11/Scaling-up-clean-cooking-in-urban-Kenya-with-LPG-and-Bio-ethanol.pdf (Accessed: 1 September 2019)." defined multiple times with different content Cite error: Invalid <ref> tag; name "Dalberg. (2018) Scaling up clean cooking in urban Kenya with LPG & Bio-ethanol: A market and policy analysis. 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(2018) Scaling up clean cooking in urban Kenya with LPG & Bio-ethanol: A market and policy analysis. Available at: https://southsouthnorth.org/wp-content/uploads/2018/11/Scaling-up-clean-cooking-in-urban-Kenya-with-LPG-and-Bio-ethanol.pdf (Accessed: 1 September 2019)." defined multiple times with different content Cite error: Invalid <ref> tag; name "Dalberg. (2018) Scaling up clean cooking in urban Kenya with LPG & Bio-ethanol: A market and policy analysis. Available at: https://southsouthnorth.org/wp-content/uploads/2018/11/Scaling-up-clean-cooking-in-urban-Kenya-with-LPG-and-Bio-ethanol.pdf (Accessed: 1 September 2019)." defined multiple times with different content Cite error: Invalid <ref> tag; name "Dalberg. (2018) Scaling up clean cooking in urban Kenya with LPG & Bio-ethanol: A market and policy analysis. Available at: https://southsouthnorth.org/wp-content/uploads/2018/11/Scaling-up-clean-cooking-in-urban-Kenya-with-LPG-and-Bio-ethanol.pdf (Accessed: 1 September 2019)." defined multiple times with different content Cite error: Invalid <ref> tag; name "Dalberg. (2018) Scaling up clean cooking in urban Kenya with LPG & Bio-ethanol: A market and policy analysis. Available at: https://southsouthnorth.org/wp-content/uploads/2018/11/Scaling-up-clean-cooking-in-urban-Kenya-with-LPG-and-Bio-ethanol.pdf (Accessed: 1 September 2019)." defined multiple times with different content Cite error: Invalid <ref> tag; name "Dalberg. (2018) Scaling up clean cooking in urban Kenya with LPG & Bio-ethanol: A market and policy analysis. Available at: https://southsouthnorth.org/wp-content/uploads/2018/11/Scaling-up-clean-cooking-in-urban-Kenya-with-LPG-and-Bio-ethanol.pdf (Accessed: 1 September 2019)." defined multiple times with different content Cite error: Invalid <ref> tag; name "Dalberg. (2018) Scaling up clean cooking in urban Kenya with LPG & Bio-ethanol: A market and policy analysis. Available at: https://southsouthnorth.org/wp-content/uploads/2018/11/Scaling-up-clean-cooking-in-urban-Kenya-with-LPG-and-Bio-ethanol.pdf (Accessed: 1 September 2019)." defined multiple times with different content Cite error: Invalid <ref> tag; name "Dalberg. (2018) Scaling up clean cooking in urban Kenya with LPG & Bio-ethanol: A market and policy analysis. Available at: https://southsouthnorth.org/wp-content/uploads/2018/11/Scaling-up-clean-cooking-in-urban-Kenya-with-LPG-and-Bio-ethanol.pdf (Accessed: 1 September 2019)." defined multiple times with different content Cite error: Invalid <ref> tag; name "Dalberg. (2018) Scaling up clean cooking in urban Kenya with LPG & Bio-ethanol: A market and policy analysis. 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  2. ↑ https://kokonetworks.com/
  3. ↑ Alliance News. (2016) ‘Kenya Drops Trade, Tax Barriers to Aid Adoption of Cleaner Cooking Technologies’, Clean Cooking Alliance, 22 June. Available at: https://www.cleancookingalliance.org/about/news/06-22-2016-kenya-drops-trade-tax-barriers-to-aid-adoption-of-cleaner-cooking-technologies.html (Accessed 2 October 2019).
  4. ↑ Collins, B. (2019) 'Africa's $40B Market for Cooking Fuel Is Being Cleaned Up: Q&A', BloombergNEF, 9 September. Available at:https://about.bnef.com/blog/africas-40b-market-cooking-fuel-cleaned-qa/ (Accessed: 28 October 2019)
  5. ↑ Lambe, F., Jürisoo, M., Wanjiru, H., and Senyagwa, J., 2015. Bringing clean, safe, affordable cooking energy to households acrossfckLRAfrica: an agenda for action. Prepared by the Stockholm Environment Institute, Stockholm and Nairobi, for the New ClimatefckLREconomy. Available at: http://newclimateeconomy.report/misc/working-papers.
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