View
5
Download
0
Category
Preview:
Citation preview
Scaling up clean cooking in urban Kenya with Bio-ethanol
Webinar April 2020
2
Annually dirty cooking fuels kill more people than malaria and TB combined due to indoor air pollution
Dirty fuels for cooking contributes to deforestation and climate change - accounting for about 2% of global CO2 emissions, equivalent to Canada’s emissions or from annual air travel
Traditional biomass used for cooking and heating by 2.8 bn people accounts for more than half of all bioenergy used worldwide. Cooking with traditional biomass has multiple negative impacts on human health, particularly for women, children and youth…. …overharvesting of wood fuel, contributes to land degradation, losses in biodiversity and reduced ecosystem services. ….accounts for 1.9–2.3% of global GHG emissions, particularly in ‘hotspots’ in East Africa and South Asia. Scenarios to significantly reduce reliance on traditional biomass in developing countries present multiple co-benefits. Most mitigation scenarios include substantial deployment of bioenergy….. all 1.5°C pathways include bioenergy, requiring as much as 7 Mkm2 to be dedicated to the production of energy crops in 2050….. IPCC-SpecialReportonClimateChange&Land,2019
3
”
“
The urban Kenyan cooking fuel market is estimated at USD 600m – 800m per annum, & remains dominated by dirty fuels
ThemajorityofKenyanscurrentlypayingforcookingfuelsliveinurbanKenya• Most fuel used in rural areas is gathered not
purchased(e.g.,84%ofhouseholdsusefirewoodastheirprimaryfuel)
• In urban areas, over 80% of households arealready purchasing cooking fuel and are primetargetsformodernfueluse
Withinmodernfueloptions,Bio-ethanolandLPGarethemostfeasibletoday;Bio-ethanolistheleastunderstood• LPGiswell-understood,alreadypromotedbythe
Gov,andenjoysstrongconsumerrecognition• Bio-ethanol is relatively unexplored and has
achievedlowerpenetrationthusfar• Electricitywill become increasingly important to
theoverall cookingmix; however, fornow,onlyhigher income consumers can afford theexpensivebutefficientelectricstoves
PrimaryCookingFuelUsedinKenyanHouseholdsin2017(%ofpopulation)
5584
15
22
14
29
28
16
313 252
Kenya Rural
92
Urban
Otherfuels
CharcoalKeroseneLPG
Firewood
InurbanKenya,themajoritystillusecharcoalandkerosene;thisnumberismuchhigherwhenfuel‘stacking’isincluded
PrimaryCookingFuelUsedinKenyanHouseholdsin2017(households,millions)
Firewood -5.7
1.4
Charcoal
-0.2
-0.2Kerosene
LPG
Electricity 0.0 0.1
1.1-0.6
1.5
0.8
Kenyanurbanhouseholdsarenowreadyforrapiduptakeofclean,modernfuels
UrbanRural
Continued dependence on dirty cooking fuels poses serious health, environmental, and food insecurity risks for Kenya
• Indoor air pollution: 728k Disability-Adjusted Life Years (DALYs) and 16.6kdeaths annually, 8-10% of early deaths in Kenya1, likely a substantialunderestimate of the full disease burden as many negative cooking healtheffects have not yet been quantified (e.g., burns, eye diseases, physicalinjuriesfromcarryingfirewood,etc.)
• Lower respiratory tract disease is the third largest contributor of deaths inKenyawhilepneumoniaisamajorcauseofdeathtochildrenundertheageoffive,largelyduetoindoorairpollution1
• Deforestationandforestdegradation:Kenyaloses10.3millionm3ofwoodfromitsforestseveryyearfromunsustainablecharcoalandwoodfueluse,amajorcontributortothe0.3%peryeardeforestationrate2
• GHG emissions: Household fuel use in Kenya contributes 22-35 milliontonnes of CO2 eq each year,which is equivalent to30-40%of total KenyaGHGemissions2
• Food insecurity: deforestation, resulting from the use of dirty fuels,exacerbates food insecurity and harms the agriculture sector. Kenya's fiveforestwater towers feed filtered rainwater to rivers and lakes and provideover75percentofthecountry'srenewablesurfacewaterresources3
Impactofusingbiomassfuelforcooking
Health
Environment
Foodinsecurity
Most ethanol is produced from sugarcane. Cassava can also be used as a feedstock
7
V2.0 innovations mean that Bio-ethanol can be delivered at scale to the customer at a price up to ~40% less than the V1.0 approach
Source: KOKO networks, expert interviews.
SupplychainmarginsforBio-ethanol(%oftotalcost)
SectionIII:P
oten
tialofB
io-ethan
olfo
rcoo
kinginKen
ya
0.35 0.35
0.56
0.070.07
0.08
0.10
0.20
0.29
0.21
V1.0
0.05
1.48
V2.0
0.85
-43%TaxesRetailDistributionMarketerBulkstorage&transportLandedsupplycost
Bio-ethanolV2.0costsaresignificantlylowerthanthoseofBio-ethanolV1.0
• Leveragingexistingdownstreaminfrastructurecancutdownbulkstorageandtransportcostsby~90%
• Technology-enableddistributioncanreducecombineddistributionandretailcostsby~45%
• Asidefromlandedsupplycost,taxesdrivetheretailpriceofBio-ethanolV2.0
Granting industrial Bio-ethanol imports a VAT-zero rating and eliminating associated tariffs could reduce Bio-ethanol retail prices
from $0.85 /L to $0.64/L
The cost at which Bio-ethanol can be sold to customers is inflated by high import taxes and VAT, which drive ~25% of the retail price
TaxesonBio-ethanolarehighrelativetothoseonotherfuelsin
Kenya
TaxesonBio-ethanolarehighinKenyarelativetoinother
countries
FUEL Effective duty Effective VAT
Charcoal N/A N/A
LPG 0% 0%
Kerosene 9%1 0%
Denatured technical Bio-ethanol
25% 16%
KenyandutyandVATratesforcookingfuels:
DutyandtaxburdenonimporteddenaturedBio-ethanol;subsetof21SSAnations,reflectingduties+taxes,%
26
20
28
10
21
28
37
43
4349
Kenya 41
43
40
43
3939
2828
3035
28
ImporttariffVAT
Granting Bio-ethanol a VAT-zero rating and eliminating tariffs would make it the cheapest cooking fuel option for Kenyans
(1) Averagefueldiettakenfromsurveydata;averagesizeofhouseholdinNairobiassumedtobe3.2(2) Recentpricespikeincharcoalpricereach$0.5/kgandcontinuetorise;thisisduetoabanonillegalloggingintroducedbythegovernmentin
additiontotheexpectedupswingduringthewetseason(3) AssumesV2.0modelandusingimportedBio-ethanolSource:Renetech2017;TERI2016;KenyainstituteforPublicPolicyResearchandAnalysis2010;KOKONetworksconsumerresearch;DalbergAnalysis
Averageannualfuelexpenditurebyfueltypetomeet3,500MJfueldietofatypicalNairobihousehold1,USD/year
$0.64/L$1.70/kg$0.82/L $0.79/L$0.40/kgPrice
Bio-ethanolaftertaxreduction
233
Kerosene
226228
LPG
176224
Charcoal
Bio-ethanolaftertaxreduction
Bio-ethanol
MinimumStoveEfficiencyMaxStoveEfficiency
AverageStoveEfficiency
Recentcharcoalpricespike2
A transition of all kerosene / charcoal users in Nairobi to Bio-ethanol could result in ~2mn tonnes GHGs, 200K DALYs, and 1,500 deaths averted p.a.
AfulltransitionofkeroseneandcharcoaluserstoBio-ethanolinNairobialonewouldhelptowardsachievingtheSustainableDevelopmentGoals
~200,000DALYsand1,500deathsaverted34overathree
yearinterventionperiod
timesavingsfromcollection,cooking,andcleaningwill
accruetowomen
USD60mninannualconsumersavings4
Reductionof2mntonnesofCO2eqemissions1
Thisrepresents2-3%ofKenya’sannualGHGemissionsand10%ofKenya’s2030GHGreduction
goal2
Bio-ethanol presents potential opportunities for strengthening the Kenyan economy
Taxrevenue
• Reducingcharcoalusecouldenhancefoodsecurity• ~90%of charcoal for cooking is harvested fromnon-renewable forests, driving food insecuritythroughnegativeimpactsonwatercyclesandlanddegradation
Tradebalance
Jobs
Foodsecurity
• DomesticBio-ethanolindustrywilldeliverbetter-paying,formaljobsalongtheBio-ethanolvaluechain,fromfarmerstodistributors
• Depending on business models adopted, an industry serving 500,000 customers could create40-70Knewjobs,generatingUSD17-35mninincrementalincomes
• Inthefuture,domesticallyproducedBio-ethanolcouldreplaceimportedkerosene,improvingthetradebalance
• With enough investment into domestic production, Kenya could one day be a regional netexporterofBio-ethanol(vs.importsfromSudan,Mauritius,andPakistan)
• DomesticBio-ethanolproductionhasthepotentialtoincreasestaxrevenuesinthelong-runasformal,incometax-payingjobsarecreatedinthedomesticBio-ethanolindustry
1
2
3
4
Next steps Expanding beyond Nairobi for urban clean cooking Project pipeline for domestic production of bioethanol
EthanolCookingFuel(ECF)Masterplan
CommissionedtoprovidearoadmapfortheestablishmentofanECFindustryinKenyaObjectiveto:• Signaltoinvestorsinordertobuildconfidence• ProvidesanevidencebasetoguidethedevelopmentofECFinfrastructureand
distributionsystems.• RecommendpoliciesonhowtheGovernmentofKenyaandotherstakeholderscan
supporttheindustry.• Providesscopeonthemacro-economicbenefits,jobsandforeigninvestment• Potentialtodeliverontheobjectivesofkeynationalstrategiesifplannedand
implementedresponsibly
WhyaMasterplan?
Kenya’sBigFourAgenda(foodsecurity,affordablehousing,manufacturing,affordablehealthcareforall)Vision2030-aimstotransformKenyaintoanewlyindustrializing,middle-incomecountryprovidingahighqualityoflifetoallitscitizensby2030NationallyDeterminedContributionNationalClimateChangeActionPlan2018-2022(NCCAP)GlobalSustainableDevelopmentGoals.
Buildingasharedvisionforthesector
GovernmentMinistries:IndustrializationAgricultureEnergyEnvironmentCCDHealth
SouthSouthNorth
&Dalberg
Privatesector,NGOsKOKONetworksVivoGiraffeBioenergyClean Cooking Assoc Kwale Sugar, Muhoroni Kibos Sugar, Cassava Options GIZ, SNV, Practicl Action, Livelhoods, Praj
We convened two working groups
Key recommendations – demand & supply
Toboostdemand:• Partnershipswithprivatesectoranddonor
communityforstovefinancing• Awarenessraisinganddiscouraginguseofdirty
cookingfuels• Taxandfiscalincentivesacrossthevaluechain• VAT,ImportDuty,TaxRebates,Low-interestloansTosupportlocalproductionofECF:• Creatingsupportivesmallholderfarmerecosystems• Expandingfeedstockgrowingzones• UnlockingclimatefinancetodevelopECFecosystem
NEXT STEPS
Official Government adoption of the Plan.
Conduct feasibility studies on setting up
ethanol plants
Create a working group to identify and resolve supply chain
challenges
Using social media to build awareness
https://www.youtube.com/watch?v=05adyqTUSd8
Copyright©2018,SouthSouthNorth.Allrightsreserved.
www.southsouthnorth.org
Thank you
Recommended