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  F. TANZANIA Contents 1. INTRODUCTION 1.1 Bioenergy utilization in Tanzania 1.2 Potential for bioenergy and concerns 1.3 Bioenergy operating companies 2. INTERNATIONAL INITIATIVES RELEVANT TO BIOENERGY 2.1 International legal framework 2.1.1 Clean Development Mechanism in Tanzania 2.1.2 United Nations Convention to Combat Desertification (UNCCD) 2.1.3 Convention on Biological Diversity 3. NATIONAL POLICIES RELEVANT TO BIOENERGY 3.1 National Energy Policy (2003) 3.2 Trade Policy for a Competitive Economy and Export-led Growth (2003) 3.3 National Environmental Policy (1997) 3.4 Agricultural and Livestock Policy (1997) 3.5 Employment Policy (1997) 3.6 Forest Policy (1998) 3.7 Investment Policy (1996) 4. NATIONAL LEGISLATION RELEVANT TO BIOENERGY 4.1 Petroleum Supply Act 4.2 Environmental Legislation 4.2.1 Environmental Management Act 4.2.2 Water Utilization (Control and Regulation) Act 4.2.3 Forest Act 4.3 Investment legislation 4.3.1 Tanzanian Investment Act 4.4 Land-use legislation 251 251 252 254 254 254 254 256 257 258 258 259 260 260 261 262 262 262 263 264 265 267 268 272 272 273  Case studies on bioenergy policy and law: options for sustainability 250 4.4.1 Land Act and Village Land Act 4.4.2 Land-use Planning Act 4.4.3 Land banks 4.5 Employment Legislation 4.5.1 Occupational Health and Safety Act 4.5.2 Employment and Labour Relations Act 4.6 Food Security Act 5. INSTITUTIONAL FRAMEWORK FOR BIOENERGY 5.1 National Biofuels Task Force   5.2 Energy and Water Utilities Regulatory Authority 5.3 National Environmental Management Council (NEMC) 5.4 Tanzania Bureau of Standards (TBS) 5.5 Research and Development 6. CONCLUSIONS 273 275 275 276 276 277 277 278 278 280 280 281 281 282  1. INTRODUCTION  This chapter is divided into six sections, the first focusing on Tanzania's energy sector in general and the relevance and potential of bioenergy in  Tanzania. Thereafter the influence of international legal instruments on the national legal framework for bioenergy in Tanzania is reviewed. This is followed by a discussion of the domestic policy, legal and institutional frameworks relevant to bioenergy. The final section highlights certain regulatory features of the bioenergy framework and offers some conclusions. 1.1 Bioenergy utilization in Tanzania Bioenergy plays an important role in Tanzania. Tanzania's energy balance is dominated by biomass-based fuels, particularly fuel-wood (charcoal and firewood) which is the main source of energy for both urban and rural areas. Biomass-based fuel thus accounts for more than 90 percent of Tanzania's primary energy supply. Imported petroleum and hydro electricity account for approximately 8 percent and 1.2 percent of the primary energy consumption respectively. The share of solar and wind energy is about 0.8 percent. Development of natural gas for electricity is also ongoing. The dissemination of renewable energy technologies has been thus far limited to the promotion of improved stoves, improved charcoal production techniques, solar, biogas and windmills and to a lesser extent photovoltaic sources.  A study on Liquid Biofuels for Transportation in Tanzania by the German  Agency for Technical Cooperation (GTZ) in 2005, indicated that the use of liquid biofuels from energy crops is almost non-existent. 162  In rural areas  where jatropha is planted, jatropha oil is used in small lamps and for making soap with the help of local non-governmental organizations. The study also revealed that the price of jatropha oil was US$ 2 per litre, which is more expensive than diesel fuel; thus there is no economic incentive for using jatropha oil as a substitute for diesel. With regard to other types of biofuels, the GTZ study indicates that Tanzania has the potential to produce biofuels from other sources, including starch crops such as grains, maize and tubers like cassava, sugar plants such as sugar cane, cellulose plants (agricultural residue) and other oil seeds such as cotton, moringa and pongenia. 162  GTZ. 2005.  Case studies on bioenergy policy and law: options for sustainability 252 1.2 Potential for bioenergy and concerns  Tanzania is frequently cited as a country with the potential to become a significant biofuels producer from energy crops. 163  This is due to its favourable geographical location: having borders with eight countries and access to the Indian Ocean, Tanzania offers a good gateway for biofuels to external and internal markets. It may also be linked to Tanzania's ideal agro-climatic conditions for growing a wide range of suitable crops, including sugar cane, palm oil, jatropha, soy and cotton. Another reason is the availability of land: Tanzania has over 88 million hectares of suitable agricultural land of which less than ten per cent is currently utilized. Furthermore, most of this land is not virgin forest or otherwise environmentally sensitive. Tanzania is also endowed with three of the world's ten largest lakes, has a large network of rivers, all of which comprise significant irrigation sources. Furthermore, the availability of local expertise and institutions created through the support of international development partners as well as the National Biofuels Task Force provides the opportunity to harness this bioenergy potential. In addition, there are a number of local entrepreneurs and corporate groups  who have expressed interest in investing in biofuels. The government, through the Tanzania Investment Centre, has also identified the energy sector as a priority sector. This means that a number of incentives available for investments in the energy sector can be extended to biofuels, such as zero percent import duty on capital goods, Value Added Tax (VAT) deferment, land rent reduction as well as zero-rated VAT on exports. 164   The current move towards biofuel production in Tanzania is necessitated by a number of factors, which are analogous to the concerns in the rest of the  world. Notably, being dependent on oil imports, Tanzania has been affected by price increases of petroleum products on the world market. A study indicated that the value of Tanzania's oil imports rose from US$ 1 661.4 million in 2002 to US$ 2 145.4 million in 2003. In 2006, the import of petroleum accounted for 40 percent of all imports with 40 percent of this figure going towards the transport sector alone. The continuous increase in oil prices is a heavy burden for the country and by reducing its oil imports,  Tanzania would make savings in foreign exchange and thus improve its balance of payments. Other reasons supporting the production and use of 163  Keamey, A.T. 2006. 164  For more information, see www.tic.co.tz.
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