Jamaica Biofuels Report - Ministry of Energy

agroenergy/biofuels operations in the country. Jamaica needs to institute expedient industrialpermitting review and licensing procedures for new biofuels facilities, so investors can have agood understanding as to what it will take and how long to see their investments generateprofits. A single agency, such as NEPA, should provide a “one-stop-shop” to interested parties,coordinate with other government agencies, and streamline and accelerate the process.Moreover, quality standards for the produced biofuels need to be instituted or adopted fromother regions of the world, such as the US or the European Union.Lack of Business IncentivesThe lack of business incentives for domestic production and use of biofuels will be a keyobstacle to the adoption of biofuels in Jamaica. Just like every nascent industry, biofuels willneed state support to establish themselves as a viable option, especially in light of theirsustainable nature, economic contribution, and environmental friendliness. Jamaica shoulddevelop and adopt policies promoting the local production and use of ethanol and biodiesel,such as revenue tax exemptions for biofuels-producing operations, reduced sales taxes onbiofuels compared to fossil fuels, reduced import duties on flexible fuel cars, and no importduties on equipment used for the manufacturing and R&D of biofuels. Such measures shouldremain in effect until the biofuels sector has matured to stand on its own. Colombia has set agreat example in the region. Following in the footsteps of Brazil, the country implementedbiofuels legislation (Law 693) since 2001 promoting the production of ethanol from agricultureand mandating its use throughout the country as a blend with gasoline.Despite these challenges, biofuels constitute a major opportunity for Jamaica in terms ofenergy security, foreign investment, economic growth, job creation, international trade, andclimate protection. In 2007 the US and Brazil signed a Memorandum of Understandingagreeing to jointly help certain Latin American and Caribbean countries, including Jamaica,develop a biofuels industry. Technical, business, and policy experts from the two countrieshave visited the region to offer biofuels guidance to governments and the private sector.With policy, technical, and financial support from the US and Brazil, the country can boost thevalue of agriculture by co-producing food, biofuels, and renewable power. By focusing onsystematically addressing the outlined challenges and obstacles, Jamaica can take advantage ofthe excellent economic opportunity that biofuels, current and future, represent for its people.Low oil pricesThis is a challenge beyond Jamaica’s control, but a significant one as it affects the profitability ofbiofuels production in the country. Low oil prices will render biofuels more expensive and maycreate public backlash as blended gasoline and diesel will be more expensive. However, thecountry has already implemented E10 in both types of gasoline available (octane 87 and 90),therefore unblended gasoline is not an option at gas stations. The same should be done withdiesel.Mitigation of this risk lies in the pursuit of increased productivity by the Jamaican ethanolindustry through high yields in both the field (tons of cane per hectare) and the plant (gallons of49