An economic analysis of small-scale biodiesel production in Sierra Leone

The International Energy Agency states that the world will need at last 50 percent more energy by 2020 (Thongbai et. al. 2006). This problem is especially acute in Sub- Saharan Africa. This region faces especially great food vs. fuel tradeoffs. Discerning whether land would be better used for continual land production to meet food consumption for a society needs or whether bioenergy production has the potential to increase foreign exchange in hopes of increasing food security are very important questions to consider. Arnt et al. conducted an economic analysis using a Computable General Equilibrium Model of biofuels in Mozambique. They find that biofuels production can enhance economic growth and reduce poverty. They conclude that over a 12-year horizon, approximately 36,000 and 55,000 manufacturing jobs can be created in the ethanol and biodiesel sectors, respectively. Using this article as a template for issues that Sierra Leone faces also, I use a Partial Budget Analysis (PBA) and Microeconomic Analysis (MEA) to determine an economic analysis for biodiesel production from palm kernel and fruit oil. I focus on how potential biodiesel production from palm fruit oil could affect food security and poverty in the country. I find that the feasibility and profitability of small-scale biodiesel production is sensitive to wage rates and input prices. Biodiesel produced from palm kernel oil can be profitable given the correct circumstances. I also find that opportunity cost of diverting palm fruit oil away from food to biodiesel is quiet high and seemingly unprofitable in most cases.

Name thesis:degree_name

M.S.

Level thesis:degree_level

Thesis

Discipline thesis:degree_discipline

Agr & Consumer Economics

Grantor

University of Illinois at Urbana-Champaign

Year dc:date

2010

Author dc:creator

• Griswold, Yvonne R.

Contributors dc:contributor

• Bullock, David S.

• Sierra Leone
• palm oil
• microeconomic analysis

Statement dc:rights

• © 2010 Yvonne Renee Griswold

Language dc:language

en

Handle dc:identifier

http://hdl.handle.net/2142/16171

OAI identifier oai:identifier

oai:www.ideals.illinois.edu:2142/16171