PLANT A SPARK

Colombia 2013 | AGRICULTURE | FOCUS: BIOFUELS

In less than six years, Colombia has become the second ranked biofuels producer in Latin America after Brazil.

According to the national investment agency, Proexport, Colombia's sugarcane ethanol industry boasts the highest productivity levels in the world, with a potential output of close to 9,000 liters per hectare per year. It is also the fifth largest producer of palm oil biodiesel in the world and the biggest producer in Latin America, maintaining production levels of up to 4,200 liters of per hectare annually. The availability of raw materials is backed up by vast amounts of land suitable for biofuel crop cultivation. The government aims to increase the country's cultivated area from 548,388 hectares dedicated to sugarcane and palm oil cultivation to more than 3 million hectares in the next decade.

According to the national biofuel producers association, FedeBiocombustibles, the country is currently blending 9% of biodiesel with diesel and 8% of ethanol with gasoline, a result that was achieved after an investment of nearly $2 billion. The goal is to increase blending activity to 20% by 2020 for both fuels. The development of biofuels does not only reduce dependence on hydrocarbons, but is also an engine for the regional economy through the creation of jobs. According to Jorge Bendeck, Executive President of FedeBiocombustibles, “Many young people are involved in the production and dealing of illicit materials, so we are constantly seeking ways for young people to become legally employed. The results have been extraordinary."

The biofuels industry also plays an important role in the reduction of greenhouse emissions. In a recent government report, Colombia's biofuels exceeded international standards for reducing greenhouse gas emissions, advancing the country's goal to become a leading ethanol producer. The study found that Colombian ethanol made with sugar cane emits 74% less greenhouse gases than fossil fuels. Ethanol made with palm oil produces 83% less emissions. These reductions mean that if all of the country's existing sugar cane and palm oil facilities operated at full capacity, carbon dioxide emissions would drop by 1.8 million tons—3% of the country's total CO2 emissions in 2008. Colombia's ethanol industry is also set to benefit from the US free trade agreement (FTA). Sugarcane ethanol is not produced in the US, and while Brazil's exports to the US face high tariffs, Colombian fuel will bypass taxes as a result of the FTA.

Although only local companies are currently investing in biofuels, foreign investors are showing an increasing interest in the sector. Merhav, an Israeli company, is developing 10,000 hectares for a large project on the Atlantic coast that will produce 400,000 liters of ethanol per day using sugarcane, introducing agriculture to an area that previously only stocked cattle, and creating around 6,000 jobs. Because of its very close proximity to the nation's ports, it is also possible to distribute to the international market. However, as Jorge Chaves Dominguez, Director General of Merhav Colombia, told TBY; if Colombia wants to become a regional player, it will need more scale and more infrastructure. Over the last 10 years, Colombia has made bold moves by putting laws into place that secure a path forward for biofuels. “As long as Colombia stays on course in terms of its policy, I believe that biofuels will play an important part in the country's energy future," he explained.