Uganda launches national biofuels blending programme as it embarks on energy transition

July 1, 2025 in Energy, Renewable by Editor

Uganda has formally launched a national biofuels blending programme, marking a milestone in the country’s drive toward energy security, environmental sustainability, and economic transformation.

Announced by the Minister for Energy and Mineral Development, Hon. Dr. Ruth Nankabirwa Ssentamu, during a media briefing at the Uganda Media Centre on Tuesday, the programme begins with the blending of premium motor spirit (commonly known as petrol) with 5pc ethanol (E5), a move government says will reduce dependence on imported fossil fuels while boosting local industry.

“This programme is not just about introducing a new fuel type; it is about creating a more sustainable and self-reliant economy,” Minister Nankabirwa said, highlighting the multi-dimensional benefits of the initiative. “We are strengthening energy independence, supporting farmers, creating jobs, and reducing greenhouse gas emissions.”

Under the new programme, ethanol derived from agricultural produce—such as maize, cassava, and sugarcane—will be blended into fossil fuels at a ratio of 5pc. This is expected to gradually scale up to 20pc, in line with targets outlined in the Biofuels Act.

The launch marks the start of a six-month incubation period that runs until December 31, 2025, during which industry stakeholders, particularly oil marketing companies, are expected to fully adapt to blending standards and operational readiness. The Ministry of Energy has assured the public that the country is well prepared for this transition.

In a clear nod to Uganda’s “Buy Uganda, Build Uganda” (BUBU) policy, all ethanol for the blending programme will be sourced from local producers. According to the Ministry, licensed ethanol suppliers currently have a production capacity of 78.5 million litres annually—a figure projected to rise significantly with further investment.

Key players in the ethanol value chain include Pro Industries, Kakira Sugar Ltd, G.M. Sugar Ltd, Hoima Sugar Ltd, and Bukona Agro-Processors Ltd. The Ministry also revealed that four blending facilities have been licensed at major border entry points:

• Modern Energy Ltd at Busia (49 million litres/month capacity),

• Bukona Agro Processors Ltd at Malaba (48 million litres/month),

• Afro-Kai Ltd at Mutukula (6–8 million litres/month), and

• Lake Victoria Logistics in Kawuku, Entebbe (10 million litres/month).

Together, these facilities will handle and blend around 110 million litres of fuel annually, beginning with the initial 5% ethanol-to-fuel ratio.

Government officials believe the benefits of the programme will be felt across several fronts. First, it is expected to stabilise agricultural markets by creating new demand for crops such as cassava and sugarcane. Farmers and agro-processors are expected to benefit from increased prices, expanded markets, and a more stable income stream.

Second, biofuel blending is projected to reduce fuel prices in the medium term. The Energy Ministry has analysed ethanol pricing trends over the past decade and concluded that the inclusion of ethanol in fuel will lead to cost efficiencies and improved combustion performance in engines.

The government has also removed taxes on denatured ethanol for both fuel and cooking use, making the product more affordable and incentivizing its adoption.

Environmentally, the programme is expected to make meaningful contributions to Uganda’s climate goals. Ethanol, being a renewable biofuel, produces fewer carbon emissions compared to fossil fuels. By gradually displacing a share of petroleum-based fuels, the programme supports Uganda’s Nationally Determined Contributions (NDCs) under the Paris Agreement.

“Biofuels offer a cleaner alternative that improves air quality, lowers greenhouse gas emissions, and supports our national climate action goals,” Nankabirwa emphasized.

Beyond domestic benefits, officials say Uganda’s biofuels programme could open up opportunities in regional and international markets. With the European Union already mandating a 2pc SAF blend in aviation fuel by 2025—rising to 70pc by 2050—Uganda could eventually export ethanol-based fuels, especially for aviation.

The country’s agricultural potential and existing industrial base position it well to become a regional supplier. “We are already receiving interest from investors,” the Minister revealed, adding that the blending programme could become a springboard for expanding Uganda’s clean energy exports.

To ensure safety and quality, the Uganda National Bureau of Standards (UNBS) has finalised national standards for both blended fuels and ethanol. The Energy Ministry has also put in place fuel marking systems and quality assurance protocols to prevent adulteration and ensure transparency throughout the supply chain.

Consumers can therefore expect blended fuels to meet all performance and safety requirements, with officials noting that ethanol-blended petrol often results in cleaner combustion and improved engine performance.

Formal Launch Set for August

Although the technical launch of the blending programme has taken place, the Ministry plans a more formal national launch event in August 2025. Minister Nankabirwa invited stakeholders and the media to join in that occasion, which will highlight Uganda’s progress in green energy and sustainable development.

“This is a collective effort,” she said. “We call on oil marketing companies to fast-track their readiness and on all Ugandans to embrace this cleaner, locally sourced energy alternative.”

The biofuels blending programme is the latest addition to a series of energy reforms in Uganda aimed at diversifying the energy mix, increasing local content, and reducing the environmental footprint of fossil fuels.

With supportive legislation in place, operational infrastructure developing quickly, and growing interest from private sector players, the initiative could be a catalyst for broader changes in Uganda’s energy and agricultural sectors.