Bio-fuels blending mandate needed – ZIPAR

BUUMBA CHIMBULU writes@SunZambianGOVERNMENT should put in place a bio-fuels blending mandate as it is the first key step and critical signal in the development of the sector strong back-ward and forward linkages.The mandate will guarantee a market for all bio-fuels and feedstock producers, says Zambia Institute for Policy Analysis (ZIPAR).“Currently, Zambia only has blending ratios. This, however, is not a sufficient signal to the market,” says ZIPAR in its 2021 national budget analysis.ZIPAR indicated that a developed bio-fuels sector would further create options for production of bio-gas, increase employment opportunities, and improved incomes and livelihood for farmers involved in this trade.Bio-fuels, the think tank said, had both strong back-ward and forward linkages.ZIPAR also proposed that Government should prioritise the creation of incentives to enhance the growth of the bio-fuels sector.“This is because, firstly, the bio-fuels have both strong back-ward and forward linkages, and secondly, the current stock of motor vehicles still has a healthy lifespan.“The seemly negative impacts of development of the bio-fuels sector in Zambia, which we must hasten to say would be quickly off-set by the resulting gains such as employment and increased incomes, is increased capital infrastructure spending,” ZIPAR said.Under the petroleum sub-sector, the Government in its 2021 national budget has proposed to reduce import duty of electric vehicles from 30 percent to 15 percent to reduce the demand on petroleum products.Meanwhile, ZIPAR said a diversified energy mix was important in ensuring security of electricity supply.ZIPAR indicated that Government had rightly recognised that for the diversification drive (a long-term measure) to be sustainable, a cost reflective tariff is essential.It said while a cost reflective tariff would not cure all challenges in the electricity sub-sector, it was key to attracting new investments.“This is critical because during this recovery period, having reliable supply of electricity would support a rebound in economic activities.“It would also reduce the need to the Government to import electricity during emergencies: imports of electricity would further add pressure on the Treasury, the exchange rate and national reserves,” ZIPAR said. The Sun