UGANDA MANDATES GREEN FUEL BLEND TO CUT IMPORTS AND BOOST LOCAL INDUSTRY

Uganda is set to make a historic shift in its fuel policy, turning sugar industry waste into a cleaner energy future.

Uganda New fuel policy Energy security Ethanol blended petrol Sugar waste.
Uganda announces new fuel policy
Uganda announces new fuel policy


The Ugandan government on Tuesday announced a new fuel policy requiring all petrol sold in Uganda to be blended with 5% locally produced ethanol, with the biofuel primarily sourced from molasses, a byproduct of sugar production, starting January 2025. The move, announced by the Ministry of Energy this week, positions Uganda as one of the few African nations actively transforming agricultural residue into transport fuel at a national scale.

This bold initiative is not just an environmental pivot. It’s also a strategic economic play aimed at cutting Uganda’s $2 billion annual petroleum import bill while catalyzing rural development. By leveraging its growing network of sugar factories, particularly in the central and eastern regions, Uganda plans to scale ethanol production over time.
With a target blend of up to 20% depending on local supply availability.

“This is about energy security, economic opportunity, and sustainability,” the ministry said, framing the ethanol programme as a cornerstone of Uganda’s broader clean energy transition strategy.

The ethanol policy comes as Uganda’s energy landscape undergoes rapid evolution. Even as the country gears up for commercial oil production in 2026 and the launch of the East African Crude Oil Pipeline (EACOP), officials insist that biofuels and renewables will remain integral to the energy mix.

Fuel distributors must comply with the new standard or face regulatory penalties, and nationwide inspections will be intensified to ensure quality and compliance. Ethanol-blended petrol is expected to improve air quality, reduce carbon emissions, and expand the biofuel economy, particularly benefiting smallholder sugarcane farmers and rural distilleries.

However, the rollout is not without concerns. Stakeholders in the fuel and agriculture sectors have flagged possible bottlenecks, including ethanol supply shortfalls, infrastructure gaps, and blending logistics at fuel depots. Some experts also question whether existing sugar plants can ramp up ethanol production quickly enough to meet initial demand.

Uganda’s fuel import operations are currently centralized under a 2023 agreement with Vitol Bahrain E.C., which controls the supply of all petroleum products into the country. This structure could streamline coordination, but also adds complexity to implementing the ethanol mandate.

Still, proponents argue that the long-term benefits outweigh the risks. If managed well, Uganda could eventually become a regional hub for ethanol exports, offering a model for other East African countries exploring similar policies.

Further technical guidelines, including ethanol standards, blending procedures, and distribution protocols, are expected in the coming months. For now, Uganda is betting on biofuel to power not just its cars but its future.

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