Economy 
ISSN: 2313-8181 
Vol. 1, No. 1, 1-4, 2014 
www.asianonlinejournals.com/index.php/Economy 

 

 

 

 

 

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Growing Demand for Biofuel and its Impact on Sustainable 

Rural Development in Nigeria 
 

Idoma Kim
1
 --- Muhammad Isma’il

2
 

 
1,2

Department of Geography, Ahmadu Bello University, Zaria 

 

Abstract 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 
This work is licensed under a Creative Commons Attribution 3.0 License 

Asian Online Journal Publishing Group 

 

1. Introduction 
There is no gainsaying the fact that energy is vital for social and economic development of any economy. This 

has inadvertently led to an increase in the demand for energy worldwide (Poornima and Suren, 2013). However, it is 

important to note that fossil fuels which have been the backbone of most economies over the years are now 

unreliable on account of their damaging effects on the environment via the emission of Greenhouse Gases and 

unsustainability of the resources. (Goldemberg, 2007). 

In realization of these facts, governments of various countries are beginning to explore promising alternative 

sources of energy. Besides, the increased global concern on climate change is a factor driving interest in expanding 

bioenergy use, which is both renewable and environment friendly (Msangi et al., 2007). Consequently, Karth and 

Larson (2000) and CARC (Canadian Agri-Food Research Council) (2003) opined that biofuels are increasingly 

becoming important sources of renewable energy capable of competing with the fossil fuels and addressing the 

energy needs of the world. Thus, it has been widely accepted that biofuels have the capability to achieve the goals of 

sustainable development through the reduction of carbon emissions, an important component of climate change 

mitigation (FAO (Food and Agricultural Organization of United States), 2005a).  

Biofuel is a type of energy derived from renewable plant and animal materials. Examples of biofuels include 

ethanol (often made from corn in the United States and sugarcane in Brazil), biodiesel (vegetable oils and liquid 

animal fats), green diesel (derived from algae and other plant sources) and biogas (methane derived from animal 

manure and other digested organic material). [See Tables 1&2 for types of biofuel and major producing countries].  

Biofuels are most useful in liquid or gas form because they are easier to transport, deliver and burn cleanly (Gail and 

Khamarunga, 2009). These biofuels can be put to a variety of uses such as heating, cooking, transportation, 

electricity generation etc. (Dufey, 2007). Table 1 shows types of biomass resources and biofuel produced. 

 
Table-1.Types of Biomass Resources and Biofuel Produced 

Biomass Resources Biofuel  Produced Energy Services 

Agriculture and forestry residues Wood pellets, briquettes, biodiesel Heat, electricity, transport 

Energy crops: biomass, sugar, oil Char/charcoal, fuel gas, bio oil; bioethanol Heat, electricity, transport 

  Continue 

The recent upsurge in the demands for energy as well as the anticipated shortages and 

uncertainties associated with current energy sources, has necessitated the need to explore 

energy options from renewable sources. Hence, modern biofuels, which is obtained 

primarily from renewable biomass, are being given top priority in most countries owing to 

their great potentials in offering opportunities for achieving meaningful strategy for 

environmental and socioeconomic growth. Admittedly, one major goal of advocating for 

biofuels projects is the development of the rural economy. Consequently, anchoring on 

content analysis, the paper explored the implications of biofuel production on rural 

development. It is the contention of this paper that environmentally friendly and socially 

acceptable biofuel projects can be of immense benefit to the rural economy in most 

developing countries, Nigeria inclusive. The paper concludes with the recommendation 

that assessment of other options for rural growth is germane owing to the fact that biofuel 

production may not be an exclusive panacea to rural development problems. 
 

Keywords: Bioenergy, Biofuels, Demand, Impact, Nigeria, Renewable, Rural development, Sustainable development. 

http://creativecommons.org/licenses/by/3.0/


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Biomass processing wastes Biogas, bioethanol, solvents Transport 

Municipal waste Refusederived 

fuel, biogas 

Heat, electricity 

          Source: Domac et al. (2005) 

 

Table-2.Top Five Biofuel Producers in the World 

Country Ethanol(Million liters) Biodiesel(Million liters) Total 

United States 41.0 2.1 43.1 

Brazil 26.0 1.6 26.7 

France 0.9 2.6 3.5 

Germany 0.8 2.6 3.2 

China 2.1 0.4 2.5 

Subtotal 70.8 9.3 80.1 

Rest of the world 5.2 7.3 12.5 

Total 72.0 16.6 92.6 

                  Source: REN21 (2010). 

 

From the foregoing, it is important to state that biofuel can be broadly categorized into two: the modern and 

traditional biofuels. However, the thrust of this study is the modern biofuel, which according to Goldemberg and 

Suani (2004) refer to fuels produced in a sustainable way for electricity generation, heat production and 

transportation, from agricultural and forest residues and solid waste. This modern biofuel is basically composed of 

liquid fuels (ethanol and biodiesel) and biogas. Ethanol and biodiesel are the two common types of biofuels majorly 

used in the energy sector. 

Undoubtedly, divergent policies affect the biofuel sector globally, nevertheless the goals of biofuel development 

projects in most countries as stated by (Dufey et al., 2007), (Baun et al., 2009) include energy security; rural 

development; trade development, and mitigation of adverse impacts of climate change. Correspondingly, Faaij and 

Julije (2006) noted that irrespective of the varying nature of policy goals, the driving forces in biofuel development 

projects are rural development and employment generation.  

In addition, Biofuels already constitute the major source of energy for over half of the world’s population, 

accounting for more than 90% of the energy consumption in poor developing countries (FAO (Food and Agricultural 

Organization of United States), 2005a). Aside from lessening the dependence of energy driven economies on limited 

fossil fuel sources, bioenergy has continued to receive increasing attention from those concerned with promoting 

agricultural and environmental sustainability through the reduction of carbon emissions, an important component of 

climate change mitigation (Msangi et al., 2007). Furthermore, bioenergy is regarded  by some to be a potentially 

important contributor towards the economic development of rural areas, and a means of  poverty alleviation via the 

generation of employment and incomes i.e. linking biofuel development directly or indirectly with multiple 

Millennium Development Goals (FAO, 2005b; Kammen, 2006). Subsequently, bioenergy is seen as a highly 

promising and largely untapped renewable energy resource, and its potential environmental and socioeconomic 

advantages are becoming more obvious as technological improvements continue to emerge. Hence, the thrust of this 

paper is to discuss profoundly the influence of biofuel production on the development of the rural areas, with greater 

emphasis on developing countries like Nigeria. In the light of the preceding, the study will construct answers to the 

following questions: 

 What is the rationale for embarking on biofuel projects by governments across the world? 

 To what extent does biofuel production leads to rural development? 

 What policy approaches can be put in place by government to accelerate rural development benefits of 

biofuels? 

Following the introduction, we have section 2, which examines in details the reasons for rising demand for 

biofuels; section 3 explores the impact of biofuel projects on rural livelihood, section 4 discusses policy approaches 

to maximize rural development benefits of biofuels. Section 5 concludes the study. 

 

2. The Rising Demand for Biofuels 
There is a renewed interest in renewable energy sources and particularly bioenergy. This interest stems from the 

growing demand for energy ensuing hike in world fossil fuel prices and concerns about global warming. Although, at 

the world energy market, fossil fuel consumption still dominates, however, the anticipated uncertainty in future 

supply as well as potentially unsustainable patterns of energy consumption, and the costs of expanding proven 

reserves of fossil fuels have led many energy analysts and managers around the world to seek alternatives from other, 

more renewable resources, such as bioenergy (Msangi et al., 2007). In addition, the steadily increasing trend of 

gasoline prices overtime strengthens the rationale for seeking cheaper supply alternatives. Besides, minimizing the 

undue reliance of energy driven economies on limited fossil fuel sources, necessitates the search for bioenergy which 

has the potentials of promoting agricultural and environmental sustainability through the reduction of carbon 

emissions (Msangi et al., 2007) 

3. Implications of Biofuel Production on Rural Development 
Undisputedly, biofuel production is a topic faced with different driving forces and diverging interests. It is to be 

noted that while the global North is in favour of biofuel production so as to mitigate the effects of fossil fuels and 

invariably minimizes its dependence; the global South on the other hand sees it as a way of rather promoting rural 

development (Gmunder and Portner, 2009). As a matter of fact, it has been increasingly noted that biofuel production 

provides employment opportunities, access to new markets and helps in the expansion of agricultural production 

technology. It also increases purchasing power and decreases vulnerability to food and energy price shocks. This in 

no small measure would lead to significant welfare gains (Gmunder and Portner, 2009). Consequently, biofuels 

support rural development by increasing farm income. They offer hope of economic growth, especially for 



Economy, 2014, 1(1):1-4 

 

 

 

 

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developing countries near the equator, where energy crop production is expected to be particularly cost-effective. 

They also offer modest greenhouse gas emissions reductions (Steven and David, 2010). According to Poornima and 

Suren (2013), the production and use of biofuels are increasingly gaining attention in many countries to address 

various energy needs and that ethanol and biodiesel are the two dominant biofuels, which are extensively used in the 

transportation sector. As at the present, ethanol and biodiesels are blended with gasoline and petroleum based diesel, 

respectively and used in conventional diesel‐fueled vehicles (World Watch Institute (WWI), 2006). Thus, biofuels 

have been considered by many as a panacea to global society’s problems. Table 3 presents significant changes 

resulting from the production of biofuels that have direct bearing on rural development. 

Conversely, recent studies have affirmed that biofuels have a notable effects on food security (FAO, 2008), 

landuse rights (Lorenzo et al., 2008) and on the environment (Scharleman and Laurance, 2008). Subscribing to the 

preceding, Steven and David (2010) remarked that   rising energy demand is likely to put pressure on food 

production and the environment, have significant distributional effects, and induce reorganization in agriculture. This 

is more evident in the rural South, where the rapid expansion of biofuel production is having both adverse and 

positive effects. However, the magnitude of the impacts of biofuel production is yet to be ascertained owing to the 

dearth of sound scientific research on biofuels. 

 
Table-3.Various Rural Development Aspects Associated with Biofuel Production 

Aspects to rural development Direct Relationship Indirect Relationship 

Local job creation 

Higher level income 

X 

 

 

Better energy services  X  

Improved local health  X  

Good infrastructure facilities  X 

Improved knowledge and skills  X 

High productivity Quality of life  X 

Stabilized local economy X  

                   Source:Poornima and Suren (2013) 

 

4. Policy Approaches 
As stated in preceding sections, modern biofuels are highly promising in meeting rural development needs. 

However, development of biofuel projects requires effective measures to enhance the benefits and also to avoid 

certain environmental and socioeconomic risks that could emerge in the process (Poornima and Suren, 2013).  

Hence, it is imperative according to Rossi and Yianna (2009)that a proper appraisal of  the local biophysical and 

socioeconomic conditions is done as it  will help in identifying the most efficient and cost effective measures for 

each specific rural area. Ensuring environmentally, economically and socially sustainable biofuel production requires 

policy action in the following broad areas: 

• protecting the poor and food-insecurity;  

• taking advantage of opportunities for agricultural and rural development; 

• ensuring environmental sustainability; 

• reviewing existing biofuel policies; 

• making the international system supportive of sustainable biofuel development. 

 

5. Conclusions 
It has been established clearly in the study that modern biofuels have the potential to contribute to the 

development of rural areas, particularly in developing countries like Nigeria. This includes energy services to the 

rural community, present jobs and livelihood options and create good local heath environment. However, it is 

important to note that the strategies to establish biofuel projects that would impact positively on the rural people 

differ from one region to another based on local energy needs, environmental resource base and other socioeconomic 

priorities of the region. This is necessary especially in Nigeria where there are geographical variations across the 

various regions in the country. Governments should develop and promote biofuels policies, regulations and programs 

that take into account the needs and interests of small farmers and people in rural communities.  Consequently, it is 

out of place to assume all biofuel projects will yield expected results in all cases and in all places. Hence, the need 

for proper appraisal and analysis. 

 

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