Policy Brief - Biomass Energy: Marginalized but an Important Energy Source for the Majority in Tanzania
Posted by tatedo on March 22 2016 04:40:33
Biomass energy (mainly firewood and charcoal) has consistently figured around 90% of national energy demand for over 30 years. More than 95% of households in Tanzania use firewood and charcoal as their source of energy for cooking. Firewood and charcoal will continue to play an important role in the national energy mix for many years to come.

The sector employs more than 300,000 families and generates approximately TZS 1.6 trillion annually. Despite its key role, the sector is characterized by weak governance and poor law enforcement leading to deforestation and forest degradation. A clear policy, strategies and legal framework is required to guide the sustainable development and growth of biomass energy sector.
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The energy balance in Tanzania is dominated by traditional use of biomass in the form of charcoal and firewood. Biomass energy has consistently figured around 90% of national energy demand for over 30 years. It is estimated that more than 95% of households in Tanzania use firewood and charcoal as their source of energy for cooking. In urban areas, about 71% of all urban households consume charcoal and about 19% consume firewood.

In Dar es Salaam, 91% of all households consumed charcoal in 2012, and 3% consumed firewood. Approximately 90% of all rural households cook with firewood. In 2012 about 2,333,743 tons of charcoal was consumed by 11.12 millions of people which was worth US$ 950 million and the users of firewood were 32.29 million which was worth US$ 5 billion. The production and supply of fuel wood is one of the country’s biggest industries in terms of revenue generated and jobs created. Commercial fuel wood in 2010 generates more than TZS 1.6 trillion (US $1 billion) in revenues for hundreds of thousands of rural and urban. The annual charcoal business volume in Dar es Salaam was estimated to be worth US $ 350 million in 2010. Rural earnings from charcoal are greater than those from coffee, tea, cotton, sugar, cashews, etc.

Projection of Biomass energy Use in Tanzania Various studies have indicated increase in users of charcoal and firewood as a primary source of energy. World Bank, 2009 reported increased proportion of households in Dar es Salaam using charcoal from 47% to 71% by 2001 and 2007 respectively. Ishengoma, 2015 reported increase in proportion of household using charcoal in Tanzania from 20.7% to 24.8% between 2010 and 2012 respectively (Table. 1).

Under business as usual scenario the number of people using charcoal (both urban and rural) is expected to nearly double in between 2012 to 2030 (Table 2), with charcoal rising as a percentage of total household consumption from approximately a quarter of all households today to nearly 30% in 2030.

Increase in the proportion of charcoal and firewood users could have been attributed by a number of reasons including:-

Affordability: Woodfuel provides an affordable source of energy for the majority in rural and urban population in Tanzania, at least relative to the alternatives. The alternatives are either less convenient or experience difficulties in equitable availability and distribution (e.g., electricity and LPG).

Poverty: Normally, poverty has a bearing to the type(s) and quantities of energy consumed. Around 12 million Tanzanian people are still below the poverty line. While the poverty headcount declined by around 18 percent, the absolute number of poor people only declined by 10 percent from 13.2 million to 11.9 million from 2007 to 2011/12, due to population growth. Likewise, the absolute number of extreme poor decreased by only 7 percent, declining from 4.5 million to 4.2 million5. Demand for woodfuel in the country will continue to increase as long as current unemployment levels continue to rise and sources of income continue to dwindle. Economic development generally leads to a shift up the so-called “energy ladder”.

Increased population: Consumption of charcoal and firewood is increasing with increasing population. In 1967, the population of Tanzania was 12.3 million and the forest area was 44 million ha which was equivalent to 3.6 ha per person whereas in 2012, population increased to 44.91 million while the forest area was 48 million ha equivalent to 1.07 ha per person. In year 2011, it was estimated that 90.8% of round wood harvested in Tanzania were used as wood fuel. Most of the fuel-wood and charcoal are consumed by households for domestic energy.

Increased urbanization: The urban population is increasing annually in Tanzania at a rate of 5.36% (2010-15 estimates). Charcoal is mainly consumed by urban households; increasing urbanization is leading to increase in charcoal consumption.

Use of inefficient biomass conversion technologies: To produce one ton of charcoal using the traditional kiln, 10 - 12 tons of wood are required. Efficiency of traditional firewood stoves range between 8-10 percent and charcoal stove is 15 percent.

Institutional and regulatory context
The biomass energy sector is a weakly governed and under-valued part of Tanzania’s economy, historically marginalized in both official policy and public perception. In National Energy Policy 2003, biomass energy is categorized under “renewable” alongside relatively minor energy sources such as wind and solar. The main focus of the policy is to substitute biomass energy to the extent possible, and minimal attention is paid to recognizing, legitimizing and modernizing the sector, or capturing the true value of biomass energy for poverty alleviation and economic development.

The government budget on biomass energy has consistently been less than 1% of the total national energy budget. Central government capacity to provide administrative and technical guidance in terms of human resources, finance and materials is inadequate, leading to weak law enforcement and governance. For instance, in Tabora region by 2014 only 6 out of 33 reserved forest had management plan and forest managers.

In addition, the budget allocated for biomass energy services is less than 1% of the annual energy development budget of the Ministry of Energy and Minerals. The sector is informal, almost totally unregulated, and open to any and all who wish to participate in it. It is estimated that only 5-10% of the revenue is collected because of poor management. Unregulated and unregistered activities in the production and utilization of charcoal lead to an estimated revenue loss of more than USD 100 million per year.

Wood fuel particularly charcoal is under priced by up to 50% relative to its economic cost. Market prices of charcoal and firewood only reflect the opportunity costs for harvesting and transport and do not reflect the costs for producing wood. Meaning that there is little incentive for producers to invest in more efficient wood conversion technologies as these investments do not pay off.

The sector lacks an effective benefit-sharing mechanism. Although district and village level authorities have the primary responsibility for licensing and regulating wood fuel production and trade, however very little of the total revenue is legally retained at that level.

Status of the wood resource
According to FAO (2010), the estimated deforestation rate in Tanzania between 1990 and 2010 was 403,000 ha per year. In 2009 the annual wood fuel consumption was estimated to be around 36 million m3 against an Annual Allowable Cut (AAC) of 24 million m3 of wood9. The NAFORMA assessment (2013) indicated that forest harvesting exceeds the AAC by 19.5 million m3. Figure 1 shows the projected wood deficit by 2030. If nothing is done to address the rampant deforestation and degradation and no additional plantations are established, the annual deficit will increase exponentially to 47.2 million m3. The negative impacts are extremely serious in terms of loss of water retention capacity of forests, reduction of year round surface water, reduced rural livelihoods; reduce food security and loss of biodiversity. The challenges need to be addressed beyond the forestry sector.

Recommended Policy Measures
With growing energy demand, rising fuel prices and a low electrification rate, use of biomass energy will continue for many years to come in Tanzania. As also demonstrated in most of the Household Budget Survey, the public debate in Tanzania has to acknowledge that the ever increasing consumption of wood fuel is a fact, and that it should be proactively used to instigate economic development in rural areas. Significant changes need to be introduced to make wood energy sustainable, modern, efficient, and clean in production and utilization. To ensure sustainability of the biomass sector, we recommend to the government through the Ministry of Energy and Minerals and Ministry of Natural Resource and Tourism the following:-

The national energy policies and strategies to sufficiently recognize biomass energy.

Develop and implement a clear biomass energy policy, strategies and legal framework to guide sustainable development and growth of biomass energy sector.

Improve and increase financing of the biomass energy sector to enhance institutional capacity for policy implementation and laws enforcement.

Consider reviewing the informal nature of the sector and profit distribution since it has implications regarding efficiency improvements in the production and consumption of wood fuel and the sustainable management of forest resources.

Well-managed forests can play a vital role in responding to future biomass energy demands, increase economic opportunities, improve environmental quality as well as stimulates sustainable land-use systems.