Bio-fuels energy policy framework bill passes second reading in House of Reps

Oredola Adeola

A Bill for an Act to provide a policy framework for the development of Bio-fuels energy industry in Nigeria, through the establishment of Bio-Fuels Energy Regulatory Commission and Bio-Fuels Research Agency has passed a second reading in the House of Representative.

The Nigerian Bio-fuel energy bill co-sponsored by Hon. Benjamin Kalu, Deputy Speaker, Hon. Babajimi Benson, Tanko Sununu, Amobi Ogah, Khadija Ibrahim, Julius Ihonvbere, and Leke Abejide, was read at the floor of the House on Tuesday.

Hon Kalu, Deputy Speaker, in his lead debate, stated that the bio-fuel policy was initially introduced by Nigeria in 2007 to address climate change concerns, reduce dependence on fossil fuels, and promote economic diversification.

He further revealed that it was designed to incentivize the production of bioethanol and biodiesel for blending with fossil fuels.

He said, “After 16 years, progress has been limited, with only a few Memoranda of Understanding (MoUs) in place. According to the International Energy Agency (IEA), global demand for biofuels is projected to increase significantly in the coming years.

Hon Kalu further emphasised that despite Nigeria’s potential in the bio-fuels sector and a target demand of 5.14 billion litres per year, the industry remains nascent.

He therefore identified the absence of a regulatory framework, as one of the challenges hindering the development of the bio-fuel industry in Nigeria, adding that the lack of a legal and institutional foundation has impeded the effectiveness of the industry.

According to him, this bill aims to rectify this gap and provide the necessary framework for growth. He noted that the policy offers incentives such as exemptions on Withholding Tax, waivers on Value Added Tax (VAT), and waivers on Import and Customs Duties as a measure aimed at encouraging investment in the sector.

Speaking about the benefits of the bill, the Deputy Speaker revealed that developing the bio-fuels energy sector will improve Petroleum Product Quality as Biofuels are expected to enhance the quality of petroleum products and equally address the current limitations in fossil-based fuels.

Hon. Benson, another co-sponsor, stated that the bill is part of efforts to shorten carbon emissions in Nigeria.

He said, “The purpose of the bill is to establish a Policy Framework for the development of the Biofuels energy industry in Nigeria.

“It also aims to create the Biofuels Energy Regulatory Commission and the Biofuels Research Agency, among other components.

“If the bill is passed into law, it will help Nigeria play a crucial role in the global fight against climate change. It will also reduce our dependence on fossil fuels and diversify our domestic economy,” he said.

Hon Benson further emphasised that the bill will not only create job opportunities for young people, but it will also improve farming techniques and increase agricultural research and crop demand within the industry.

He therefore noted that the bill consists of fifty-six clauses and one schedule, divided into fourteen parts.

Hon. Khadija Bukar Ibrahim, a co-sponsor of the bill, on her part, said that the bio-fuel programme constitutes a major and unique attempt to integrate the agricultural sector of the economy with the downstream petroleum sector.

She said that the use of biofuels in Nigeria is anticipated to make significant impact on petroleum product quality enhancement, in view of the current limitations of the fossil-based fuels which have not kept pace with the increasing demand for environmentally friendly fuel.

She said, “The Bill comprises of fifty-six (56) clauses and one (1) schedule. It is divided into fourteen (14) parts. The Bill primarily seeks to provide a policy framework for the development of bio-fuel industry in Nigeria, to establish the Bio-fuels Energy Regulatory Commission and to establish the Bio-fuels Research Agency.

“The contemplated legislation will require funds to set up the Bio-fuels Energy Regulatory Commission. It is also important to note that in the long run, as a regulator, the Commission will be self-sustaining. The benefits derivable from the implementation of the provisions of this Bill far outweigh the cost to be incurred.

“The development of bio-fuels industry in Nigeria will be of immense benefit to the society, economy, environment and government.

“In effect, the quest to develop the biofuels sector holds dual benefits of fostering economic growth and inclusivity for farmers while addressing the pressing issue of climate change,” Khadija emphasised.

EnergyDay further check showed that the bill which has now been referred to the House Committee on Science and Research Institutes, seeks to establish a thriving fuel ethanol industry utilising agricultural products as a means of improving the quality of automotive fossil-based fuels in Nigeria to promote job creation, rural and agricultural development, and technology acquisition and transfer.

The legislative bill also intends to provide a framework which is capable of attracting foreign investment in the biofuels industry; streamline the roles of the various tiers of government in order to ensure an orderly development of the biofuels industry in Nigeria; and involve the oil and gas industry in a more purposeful development of other sectors of the nation’s economy.