Uncovered: Italian Oil Big’s African Biofuels Gamble Falls Brief

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Investigation into Eni’s tasks in Kenya and the Republic of the Congo reveals firm is failing to provide “miracle” drought-resistant biofuels crops at scale.

Italian oil large Eni is failing to ship on its promise to provide hundreds of tonnes of biofuel crops¹, a new investigation reveals. The investigation by Transport & Setting (T&E), in collaboration with The Continent, raises questions over the credibility of the corporate’s plan — which is backed by Italian prime minister Giorgia Meloni — to scale up biofuels as an alternative choice to oil and gasoline.

Eni is betting large on biofuels and only recently signed a large deal with Ryanair to produce so-called sustainable aviation fuels. The Italian authorities for its half is leaning closely on Eni as a part of its overseas coverage ambitions to stem migration flows by financial improvement in Africa. A key a part of this technique is vitality investments. At a latest Italy-Africa summit, Ms Meloni spoke of Italy being a pure vitality hub between the EU and Africa².

Eni has promised to create a completely new provide chain of “sustainable oils” from agricultural crops and has arrange partnerships with six African international locations with a purpose to develop ‘agri-hubs’ that may provide vegetable oil for its refineries. The primary crop that Eni is betting on, castor, is marketed as being drought-resistant and appropriate for planting on poor high quality land. In Kenya alone, Eni goals to enrol 400,000 farmers producing as much as 200,000 tonnes a yr by 2027.

On-the-ground interviews with farmers and different key stakeholders within the two international locations the place the tasks are most superior — Kenya and the Republic of the Congo — present the corporate is considerably underproducing. Knowledge evaluation in Kenya reveals that Eni has failed to achieve even 1 / 4 of its 2023 manufacturing targets, whereas, within the Republic of the Congo, Eni’s tasks have been languishing on the pilot stage for greater than 18 months.

Agathe Bounfour, oil program lead at T&E, stated: “That is the primary time an oil firm has bought into the enterprise of farming crops for gas and represents a significant try and scale up biofuels manufacturing. The proof from Kenya and the Republic of the Congo means that this miracle new vitality supply being pushed by Eni is not going to convey improvement to Africa, neither is it an answer for Europe’s vitality wants. Rising drought-resistant vitality crops on arid lands sounds too good to be true. That’s as a result of it’s.”

Testimonies from Kenyan farmers, gathered by T&E, present that Eni has subcontracted a fancy community of brokers and cooperatives, resulting in inefficiencies and disappointment for hundreds of small-scale farmers who don’t obtain sufficient assist or income. Moreover, the worst drought in 40 years has severely affected harvests.

Within the Republic of the Congo, Eni is taking a special method. As an alternative of counting on small-scale farming, it’s working with giant agribusinesses. However difficulties confronted in adapting seed varieties to native situations imply tasks have but to get off the bottom. Native farmers at two of Eni’s pilot websites in Congo additionally allege that land they historically farmed was expropriated by the federal government in favour of the agribusinesses Eni is working with, Agri Sources and Tolona, casting doubt on the advantages for the native inhabitants.

Nonetheless, the Worldwide Finance Company (IFC), which invests public funds on behalf of the World Financial institution into non-public sector-led improvement tasks, is contemplating making a $210m mortgage to Eni Kenya to develop extra agri-hubs within the nation. On the time of publication, the IFC instructed T&E {that a} choice had not been made but concerning the challenge, however didn’t present extra particulars on the particular timeline for the funding choice.

Whereas Eni’s biofuels technique is struggling, it continues to put money into oil and gasoline within the area. It has earmarked €25bn to discover and develop new oil and gasoline tasks globally, in addition to keep current fields. The corporate has put aside lower than €3.4bn for biofuels.

In response to T&E’s questions, Eni denied that it had under-delivered on certainly one of its flagship inexperienced tasks and emphasised anticipated “enhancements on agricultural yields” with the introduction of latest plant varieties.

Nevertheless, testimonies from challenge companions and skilled Kenyan agricultural executives elevate doubts about whether or not the introduction of latest varieties will likely be enough to deal with the problems the challenge has confronted so far.

¹ Eni’s 2023 agriculture manufacturing goal for Kenya is 30,000 annual tonnes. Manufacturing would rise to 200,000 tonnes per yr by 2026, the corporate stated. Within the Republic of the Congo, Eni has pledged to provide 170,000 tonnes a yr by 2026. Total, Eni has dedicated to delivery exponentially growing tonnages of vegetable oil from overseas to 700,000 tonnes by 2026, or round 1 / 4 of its increasing biorefining capability.

² “Italy’s objective is to assist African nations which might be concerned about producing sufficient vitality to fulfill their very own wants after which exporting the surplus to Europe, combining two wants: Africa’s must develop this manufacturing and generate wealth, and Europe’s want to make sure new vitality provide routes. Among the many initiatives on this space, I wish to point out the one in Kenya devoted to growing the biofuels provide chain, which goals to contain as much as round 400,000 farmers by 2027.”

Courtesy of T&E. Full report right here.