Nigeria’s Biofuel Bill Passed

The House of Representatives took a significant step on Tuesday by passing the Second Reading of a crucial bill aimed at advancing the biofuels energy industry in Nigeria. This bill, co-sponsored by Deputy Speaker Hon. Benjamin Kalu, Hon. Khadija Ibrahim, and Hon. Babajimi Benson, is designed to not only foster the growth of the biofuels sector but also to establish essential regulatory mechanisms, including the Biofuels Energy Regulatory Commission and the Biofuels Research Agency.
This comprehensive bill is composed of 56 clauses and one schedule, segmented into 14 parts, underscoring its significance and complexity.

In her compelling lead debate, Hon. Khadija Ibrahim emphasized the context behind Nigeria’s foray into biofuels, dating back to 2007. At that time, the country initiated its biofuel policy as part of its commitment to combat climate change, reduce reliance on fossil fuels, and diversify its domestic economy. This policy primarily encouraged the production of bio-ethanol and bio-diesel, which would be blended with conventional fossil fuels.

However, despite the lofty goals set by the biofuel policy, progress has been sluggish over the past 16 years. Only a handful of Memoranda of Understanding have been inked, primarily involving Nigerian states such as Kebbi, Niger, Ondo, Kogi, and the Nigerian National Petroleum Corporation (NNPC).

A compelling global context adds urgency to Nigeria’s biofuels efforts. The International Energy Agency (IEA) projects a substantial growth in global biofuels demand between 2021 and 2026, reaching a staggering 41 billion liters. Furthermore, the global biofuel market was estimated at $140.43 billion in 2021.

Hon. Khadija Ibrahim lamented that despite Nigeria’s vast potential in the biofuels sector, which could meet a target demand of about 5.14 billion liters per year, the industry remains in its infancy, with untapped opportunities. Part of the challenge lies in the high production costs associated with biofuels compared to conventional fossil fuels.

To address these challenges, the government designed the biofuel policy with an eye on global best practices. Various incentives were offered to encourage investment in the sector, such as exemptions on Withholding Tax, waivers on Value Added Tax (VAT), and reductions in Import and Customs Duties.

The passage of this bill signifies Nigeria’s commitment to harnessing the immense potential of the biofuels industry, aligning with global environmental goals, and capitalizing on a growing market. As the world transitions towards cleaner energy sources, Nigeria stands poised to play a pivotal role in the biofuels revolution, provided this comprehensive bill becomes law.


  • Samson Adeyemo

    An experienced broadcast and print media journalist with nose for news and proven track records of success without compromising objectivity.

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