How To Start A Lucrative Biofuel Production Business In Nigeria: The Complete Guide
The evolution of the world is so radical that it takes on many significant domains of life, and the energy sector is not left out. As the tide is fast turning from the high-emission, high-carbon and non-reusable fossil fuels, global attention now drifts towards the recent low-carbon and renewable energy sources, one of which is the biofuel.
Derived mainly from biological materials drawn from starch-based and oil plants such as sugarcane, sorghum, maize, jatropha, soy, etc., biofuel has the potential to displace all other energy types in a few years to come. Already, the world consumed about 1,841 thousand barrels of biofuel on a daily basis as of 2019, and the market, valued at US$136 billion has been estimated to reach $230.5 billion at a 5.10% CAGR by 2025. This is highly feasible, given that the global automobile industry now creates automobiles that run on biofuel, among other areas of use such as cooking, heat production, etc. At the moment, the USA (45.7% contribution), Brazil (26.5%), Germany (2.9%), Argentina (2.7%) and China (2.6%) are at the forefront of biofuel production, and this is not surprising given that some of these nations have the fastest growing economies of the world and the biggest demands for alternatives for fossil fuels.
In Nigeria and Africa as a whole, however, the situation is slightly different. Nigeria, for one, forms a major potential market for biofuel resources. With the abundance of biomass such as sugarcane, maize, cassava and sorghum, which are rich sources of ethanol, as well as oil palm trees and jatropha, which can be used for the production of biodiesel, the nation has the potential to churn out a whopping 47.9 million MT of oil equivalent. However, there are concerns that the Nigerian domestic sugarcane farms do not produce enough sugar and that redirecting the purpose to biofuel production would cause the nation to suffer for it in terms of sugar production.
Notwithstanding, sugarcane is not the only feedstock for biofuel production, and this makes the biofuel production business a highly lucrative business for any business investor in Nigeria and any part of the world. No doubt, this is a business venture that requires a handful startup capital and technology for processing, but you could plug into any of its business opportunities, depending on your preferred scale of operation and budget.
What Is Biofuel?
Biofuel is renewable non-fossil energy derived from organic materials known as biomass or feedstock. Such materials include algae, plant materials and animal wastes. The most common feedstock used for biofuel production are starch-based plants such as sugarcane, sorghum and maize as well as oils. Biofuel has grown in acceptance over the last decade because it is readily reusable, emits less dangerous carbons than the other energy sources and its source materials are organic. Biofuel is believed to be the alternative energy source to the other fuel types in several sectors, including the transport and automotive industries.
What Is Biofuel Production?
Biofuel production describes the chemical process of breaking down feedstock such as starch, sugar and plant molecules and further refining the organic materials into usable and renewable fuel for both domestic and industrial purposes. In addition to the fact that it involves organic materials, biofuel is a way of saving the ecosystem both because it involves recycling waste, and it causes fewer health dangers than the other fuels.
Business Opportunities In Biofuel Production Business In Nigeria And Around The World
1). Cultivation Of Biomass:
Biofuel is generated from alkaline catalysts such as NaOH, KOH, sodium and potassium, which are derived from plants, including sugarcane, algae, sorghum, maize and other grains. These are plants found in several parts of the world. Since the discovery and widespread adoption of biofuel, the global demand for these plants has tripled over the years. This is an indication that cultivation of plants such as sorghum, sugarcane, maize, etc. is bound to increase in value, given the demands. At the moment, the global sugarcane market, for example, does not cater to the demands. This implies that more farmers and farmlands could be in business cultivating crops for biofuel production.
2). Feedstock Refining:
The feedstock used in the production of biofuel requires a number of processes to become renewable energy. These processes require the services of trained personnel and expert scientists in the field. It also calls for the service of engineers, given that there is quite a handful of technological devices used in the process.
Facts And Benefits Of Biofuel
- Biofuels are derived from plants and organic materials, which are easy to source.
- They are eco-friendly because they cause less pollution than other fuel types
- They are renewable and very efficient fuels.
- Biofuel has been found to burn longer than other fuel types
- Biofuel reduces greenhouse gas emissions by as much as 65%
- The USA, Brazil, Germany and China are some of the biggest producers of biofuel at the moment
- There are reports that Nigeria is home to biomass that can produce as much as 47.9 million MT of oil equivalent.
- Biomass is cheaper to refine than crude oil, the substance used to produce fossil fuels.
- The adoption of biofuel has reduced the dependence on crude oil as sources of fuel.
- Biofuel is safer and easier to use, even for combustible engines.
- They serve as alternatives to fuel sources such as firewood and thereby reduce deforestation across the world.
- Biofuel adoption is fast spreading through developing countries of the world
- Uganda, among other African nations, has approved a bill to facilitate the production of biofuel in the country.
Types Of Biofuels
1). Ethanol-based Biofuel:
Ethanol is the most common type of biofuel known. It refers to biofuel derived mostly from sugarcane, corn and sorghum. Ethanol-based biofuel is efficient for combustible engines, as in vehicles and other engines. This biofuel type contains 90% gasoline and only 10% ethanol, but it emits much less carbon than gasoline. In many parts of the world, ethanol biofuel has been approved for use in vehicles.
Biodiesel is the biofuel type derived from recycled animal fat, grease and vegetable oil. It has less adoption than ethanol, and that’s because it has the tendency to freeze up during extremely cold weather.
This is the biofuel type that involves organisms such as algae and bacteria, and it is easily derived just by fermenting the sugar content from the feedstock. The good thing about biobutanol is that it has a higher potential than the other fuel types and less demanding as far as production is concerned.
How To Start A Lucrative Biofuel Production Business In Nigeria: A Step-By-Step Guide
1). Understand The Basics:
To start your production of biofuel on a business scale, you should first arm yourself with the necessary knowledge of the fundamentals of the biofuel production industry. You definitely don’t want to start with little or no understanding of the business you’re delving into. Almost anyone can undertake a biofuel production business, but you first have to get yourself acquainted with the basics of the business.
2). Get A Business Site:
A business site for a mega business as biofuel production has to be suitable for transport reach, distribution and contact and must be equally modern and sophisticated. However, the extent of the sophistication of the business site or office depends entirely on the scale of your business.
3). Get Materials And Tools:
Some of the feedstock needed are methanol, soybean oil, lye, recycled grease, sodium hydroxide and sunflower oil, among others. The machinery to invest in include an oven, a hydrometer, a hot plate or any available alternative, a thermometer, a weighing balance, a pipette, a stopwatch, hydrometer, a biofuel plant, etc.
4). Employ Staff And Distributors:
In addition to the basic personnel who will do the actual production, you also need to employ the service of delivery personnel, who will distribute your fuel to different markets where they’re in demand.
5). Register Your Business:
There is a handful of regulations guiding the production of biofuel. First off, you need to register your business with the Corporate Affairs Commission. Afterwards, you need to secure the necessary permits such as the emission permit and operational permit from the board in charge of fuels before you swing into full production.
6). Network With Retailers:
Every institution that uses fuel is a potential market for biofuel. Most combustible engines that use other fuel types can equally use biofuel. Contact large firms, hospitals, hotels, academic institutions, etc.
Challenges Of Biofuel Production In Nigeria
- Although there is a high potential, biofuel production is still underdeveloped in Nigeria
- The biofuel production business could be capital-intensive if you plan to go large-scale
- It could lead to a shortage of resources such as food and water.
- Difficulty in getting biofuel processing devices
- Unfavourable policies governing fuel production
- Feedstock such as algae could be difficult to collect.
- Poor attitude to developing the biofuel production industry in Nigeria
- Limited government support for biofuel investors
- Competition between using resources as foods and as feedstock for biofuel production
- Poor management of available feedstock.
To Sum It Up
Biofuel production is still at its baby steps in Nigeria and most parts of Africa, and this makes it a very fertile ground for smart investors. It is only a matter of years before biofuel begins to compete favourably with petroleum in the country. The biofuel production business in Nigeria can be a lucrative and profitable venture to start-up, due to its vast market demand and on your ability to build a wide network. If you’re looking for a lucrative business to venture into, the biofuel production business in Nigeria is a great option to explore.
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