PRESENTATION BY MINISTRY OF ENERGY
AND MINING TO THE SUGARCANE
INDUSTRY COMMISSION OF INQUIRY
FRIDAY JULY 16, 2010
THE NATIONAL ENERGY POLICY

OVERVIEW
Jamaica’s National Energy Policy (NEP) 2009 – 2030, approved by Cabinet in
October 2009 and subsequently laid in the House of Parliament in December
2009. This policy is designed to ensure that by 2030 Jamaica achieves the
vision of a:
“a modern, efficient, diversified and environmentally sustainable
energy sector providing affordable and accessible energy supplies
with long-term energy security and supported by
informed public behaviour on energy issues and
an appropriate policy, regulatory and institutional framework.”
The policy aims to facilitate the establishment of a comprehensive program of
efficiency improvement and energy diversification to provide high quality,
affordable, environmentally friendly energy and to reduce the country’s
dependence on high cost imported oil.
GOALS THAT RELATE THE
SUGARCANE INDUSTRY


Goal 3: Jamaica realizes its energy resource
potential through the development of
renewable energy sources and enhances its
international competitiveness, energy
security whilst reducing its carbon footprint
Goal 4: Jamaica’s energy supply is secure
and sufficient to support long-term economic
and social development and environmental
sustainability
IMPORTANCE OF THE SUGARCANE INDUSTRY IN
MEETING THESE GOALS


The Sugarcane industry and associated diversified products
namely, -ethanol and bagasse-electricity cogeneration
increasingly offers Jamaica the opportunity to satisfy part of
its renewable energy targets in an environmentally
responsible and cost-effective manner, whilst reducing
dependence on fossil fuels and thereby providing a higher
degree of national energy security.
As a means of climate change mitigation, sugarcane ethanol
and bagasse cogeneration presents one of the few lowcarbon options for the transport and power sectors as it
emits lower levels of harmful pollutants.
BENEFITS TO BE GAINED BY THE
INDUSTRY

Sugarcane-ethanol and bagasse electricity cogeneration have
been given increasing importance because they form part of the
multi-faceted approach that many Small Island Developing
countries are taking towards increasing energy security and
reducing the use of fossil fuel sources that contribute towards
environmental pollution.

A diversified sugarcane industry will provide alternative job
creation, particularly aimed at rural employment and poverty
alleviation, along with factories will be energy self-sufficient.
THE BIOFUELS POLICY

The National Biofuels Policy currently being drafted seeks “to
develop a sustainable biofuels industry that is capable of
meeting local demand for biofuels whilst contributing to rural
economic development; generating employment opportunities;
reducing environment degradation; providing safeguards for
food production, and harnessing indigenous energy sources.”

The development of a National Biofuels Policy will facilitate the
implementation of goals 3 and 4 of the NEP, and will enhance
the economic, environmental and energy security priorities for
Jamaica.
THE BIOFUELS POLICY
The policy objectives are as follows:
 To reduce imports of petroleum products (1.5
% by 2015 and 2 % by 2030), through the
promotion of renewable electricity and
biofuels.
 To contribute to cleaner environment and
generate carbon emission reductions in line
with (CO2 targets of 163,000 by 2015 and
765,000 by 2030).
BIOFUELS POLICY

To increase and diversify indigenous agro-industry earnings
from ethanol, biodiesel and co-products (ex. Bagasse
cogeneration, biogas and nutrients from vinasse, glycerol).

To ensure that clean renewable electricity and cogeneration of
electricity for the grid are inextricably linked to the sugarcane
industry.

To ensure increased biofuels production will not impact
negatively on the availability of lands for food production.
GOALS OF THE BFP THAT RELATE TO THE
SUGARCANE INDUSTRY

Goal 1: To satisfy the E-10 demand for the
domestic market by 2015 through the
production of ethanol from locally grown
sugarcane and other indigenous sources
through the modernization of the sugarcane
agro-industry and the development other
agro-industry.
BIOFUELS POLICY


Goal 4: To satisfy X% of the public sector
electricity consumption by bio-energy
associated with the sugar cane and
biofuels sector.
Goal 5: Contribute to environmental
protection through land-use planning and
effective waste management.
ISSUES RELEVANT TO THE IMPLEMENTATION OF
THESE GOALS




Divestiture of Sugar Cane Estates and
Renewable Energy from Cane
Sugar Cane Production
Land use policy
Current and Future Technologies
Divestiture of Sugar Cane Estates and
Renewable Energy from Cane

Findings
–
–
–
No requirements on development of ethanol or
cogeneration capacity for the grid
Global markets for ethanol, sugar and rum are in
flux and investment decisions will be largely
determined by prevailing markets
Bagasse can provide a significant reliable
contribution to the base electrical load
Divestiture of Sugar Cane Estates and
Renewable Energy from Cane
Recommendations:
–
The public sugar estate divestiture negotiating team needs to
consider the national interests of bio-fuels and cogeneration
from an indigenous renewable source (bagasse) in reviewing
the proposed business plans of this divestiture.
–
Meet with new estate owners and estate management to
assess business plans for ethanol production, power
generation for sale to the grid and timelines. Evaluate
national indigenous production goals and revise as needed.
Key Statistics in Key Years 1994 - 2008
1994
1996
1999
2005
2008
Cane
production
(tonnes)
2,449,865
2,623,915
2,306,835
1,368,730
1,652,048
Sugar
(tonnes)
220,350
237,943
204,200
124,570
140,872
- TC/TS
(tonnes)
11.12
11.03
11.30
10.99
11.73
(hectares)
39,158
38,672
37,646
35,739
29,890
(tonnes)
62.56
67.85
61.28
38.30
55.27
Land Reaped
- Cane/ha.
Notes: significance of years
1994 - year of previous privatization of the industry;
1996 - progress under private ownership;
1999 - year of return to state ownership of SCJ estates;
2005 - formulation of JCS (I), figures affected by impact of Hurricane Ivan in 2004 followed by a drought over the 2004/5 growing
season;
2008 - last full year of data.
Source: Sugar Industry Authority
Summary of JCS (I) Sugar Cane Industry
Targets for 2010
Product
Raw Sugar
Molasses (coproduct)
Additional
Molasses for
rum
Sub-total
Ethanol
Total
Production
(tonnes/litres)
2010 Target
2009 Actual
200,000
126,000
67,000
40,000
67,000
0.0
Cane Required
(tonnes)
2010 Target
2009 Actual
1,900,000
400,000
2,300,000
70,000,000
0.0
1,300,000
1,300,000
1,000,000
3,300,000
1,300,000
Land Required
(reaped ha.)*
2010 Target
2009 Actual
25,000
29,000
5,000
0.0
30,000
29,000
13,000
0.0
43,000
29,000
Notes:
Land required to be reaped under the JCS for 2010 assumed higher levels of productivity than actually achieved due to
underperformance in replanting, maintenance, etc. actions proposed in the strategy.
The total cane required to meet these targets is 3,300,000 tonnes and 43,000 ha assuming a yield average of 76.74
tonnes/ha.
Source: JCS (I), SIA, SIRI
Sugar Cane Production

Findings
–
The Jamaica Country Strategy Sugar Industry targets for
raw sugar, molasses and ethanol are achievable.
–
The total cane required to meet these targets is
3,300,000 tonnes and 43,000 ha assuming a yield
average of 76.74 ton/ha.
–
There are over 50,000 ha of cane lands in Jamaica. The
average cane yield in Jamaica and Brazil in 2008 were
approximately 55 ton/ha and 87 ton/ha respectively.
Sugar Cane Production
–
The MEM is committed to support the Government of
Jamaica Country Strategy (JCS) and the Sugar Industry
Research Institute in implementing strategies to
increase production while minimizing the environmental
impact.
–
The strategies of the Biofuels Policy will seek to
promote energy efficiency, power generation and
ethanol production
LAND USE POLICY

ISSUE:

Approximately 200,000 ha of agricultural lands; but many competing
interests
The most fertile level lands are also the most desired by developers.
Preserving agricultural lands for food and bio-energy production will
benefit Jamaicans for generations to come. The Ministry of Energy
and Mining (MEM) and MOA have a common interest in this area.


Recommendation:
The MEM to work closely with the Ministry of Agriculture in
developing strategies to support the mutual interest in agricultural
lands/land use.
Current and Future Technologies

Climate and experience with sugar cane production
give Jamaica unique opportunities for first generation
ethanol production.
–
–
Microbial technologies for cellulosic conversion develop
direct conversion of bagasse to ethanol will most likely
become economically viable.
Although still in the early stages of research and
development, the climatic conditions of Jamaica for biomass
production has potential for third generation hydrocarbons
providing a wide range of fuels and co-products.
Productivity & sustainability





Replanting Cane Fields
Increased Mechanization and cane
transportation logistics
Efficient irrigation drainage and fertilizer
application
Pricing regime for sugarcane
Environmental considerations
REPLANTING

Cane fields have not been replanted when necessary to maintain
yields.
–
Less than 5% of the fields are replanted annually on public estates.

Replanting the majority of land is the first priority to improve yields.
The Sugar Industry Research Institute (SIRI) is developing
multipurpose cane and high fiber varieties for Jamaica current and
anticipated industry needs.

The SIRI is a national asset in supporting scientific input to sugar
cane potential for renewable energy and the Jamaica sugar
industry development and viability. The institute needs to increase
its visibility to potential investors.
Increased Mechanization and Cane
Transportation Logistics


The cost structure of cane farming activities
consists of harvesting costs representing
37%, cultivation costs 45% of which fertilizer
is 22% and irrigation at 8% of total costs
As yields increase and availability of hand
labor declines, mechanization becomes
essential
Irrigation Efficiency

About 25% of the Sugar Cane lands are irrigated, however,
measures to improve yields and consistency of production will
likely increase the amount of land under irrigation.

Replacement of furrow irrigation systems with efficient center
pivot and drip irrigation technologies combined with best
management practices for fertilization and irrigation scheduling
can maximize yields while reducing per hectare water and
fertilizer inputs.

A cost benefit analysis will be required on an individual
irrigation system basis.
Pricing regime for sugarcane


The pricing structure for cane has not been reviewed
since 1987. The current structure is based on sugar.
Revenues for sugar and molasses between field and
factory is currently split 62:38 respectively.
Consideration needs to be given to an equitable
revenue sharing that takes into consideration the
multiple co-products and promotes national interest
of a stable sugar cane industry and promotion of
renewable resources.
Environmental Considerations

Sugar cane is recognized as having the highest energy balance
of any crop used for ethanol production. The ration of energy
produced to fossil fuel used as an input to the supply chain is
8.3 compared to corn ethanol at 1.4.

The SIRI extension service is a credible partner in
education farmers and processors in environmentally
sustainable systems.
Environmental Considerations

Efforts to increase irrigation and fertilizer efficiency, disease
and pest resistant varieties and mulching are all best
management practices that will conserve water, reduce
chemical applications, and reduce soil erosion.

Recommends the stoppage of burnt cane harvesting (where
appropriate), and education on this issue needs to be
supported by regulatory enforcement and penalties for violation.
Education and technical support on following ISO 14000
Environmental Management needs to be part of the
implementation strategy.
CONCLUSION

Since the achievement of the objectives for
Goals 1 and 4 of the National Biofuels Policy,
is inextricably linked to the sugarcane
industry and its ultimate viability, the Ministry
of Energy and Mining is committed to work in
partnership with the industry.
Thanks






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
Ministry of Agriculture and Fishes and Divisions/Agencies who
have been participating in the development of the Biofuels
Policy
US Embassy
Brazilian Embassy
OAS
USAID
IDB
UNDP
Other Government Stakeholders