The House of Representatives has passed a Bill for an Act to provide a legislative framework for the growth of Nigeria’s biofuels industry for second reading.
This action will significantly contribute to a greener and more sustainable energy future for Nigeria.
The Biofuels Energy Regulatory Commission and the Bio-Fuels Research Agency are the two organizations that the bill, supported by the Benjamin Okezie Kalu, Khadija Bukar Ibrahim, and Babajimi Benson, seeks to create.
This would be a significant step for Nigeria in its fight against climate change and domestic economic diversification.
The deputy speaker of the house, Kalu, said during his debate that the 2007 introduction of Nigeria’s biofuel policy answers concerns about climate change, lessens reliance on fossil fuels, and encourages economic diversification.
In order to encourage the development of bio-ethanol and bio-diesel for blending with fossil fuels, he explained, the policy’s goal was to provide incentives.
However, the deputy speaker voiced concern that, after 16 years, there hasn’t been much development and that there aren’t many Memoranda of Understanding (MoU) in place.
The International Energy Agency (IEA) predicts that the demand for biofuels will rise sharply over the next few years. Despite Nigeria’s potential in the biofuels business and a goal demand of 5.14 billion liters yearly, Kalu noted that the industry is still in its infancy.
The lack of a regulatory framework was one of the main issues he cited as impeding the growth of Nigeria’s biofuel business. Despite the presence of a biofuel policy, its effectiveness has been hampered by a lack of institutional and legal support.
He emphasized that the policy gives advantages such exemptions from withholding tax, waivers of value-added tax (VAT), and waivers of import and customs duties in order to attract investment in the sector.
According to him, this measure seeks to close this gap and provide the required framework for growth. The deputy speaker emphasized the many benefits of expanding the biofuels industry, such as enhanced petroleum product quality.
This is due to the fact that biofuels would improve petroleum products’ quality while also addressing the current drawbacks of fossil-based energy.