Kenya turns to sugarcane ethanol to tame fuel prices, expand sugar sector

Kenya is increasingly turning to ethanol production as a possible lifeline for its struggling sugar industry, drawing inspiration from Brazil’s globally acclaimed sugarcane-to-fuel model that has helped lower fuel costs, strengthen energy security and create millions of jobs.

Speaking during the 68th International Sugar Organization Seminar in Diani, Deputy President Prof. Kithure Kindiki and Agriculture Cabinet Secretary Mutahi Kagwe signaled a major policy shift that could redefine sugarcane from merely a food crop into a strategic energy resource.

The government said it is now exploring the large-scale production of ethanol from sugarcane as part of efforts to reduce reliance on imported fuel, stabilize energy costs and revive the ailing sugar sector.

Delegates at the seminar heard how Brazil has, over the last five decades, successfully integrated ethanol into its fuel system, replacing more than four billion barrels of gasoline and saving the country hundreds of billions of dollars while reducing dependence on oil imports.

Presentation slides at the conference showed ethanol-blended fuel in Brazil remains significantly cheaper than conventional gasoline, making the country one of the world’s leading examples of a successful biofuel economy.

DP Kindiki announced that the government plans to review the Sugar Act and related regulations to formally anchor ethanol production within Kenya’s legal and economic framework.

He added that the State will work closely with the Energy and Petroleum Regulatory Authority (EPRA) to develop regulations governing fuel blending.

The move marks Kenya’s strongest indication yet that ethanol could become part of the country’s long-term energy strategy amid rising global fuel prices and pressure on foreign exchange reserves.

CS Kagwe said Kenya can no longer afford to focus exclusively on sugar production while ignoring the wider economic opportunities available within the sugarcane value chain.

“We have focused completely on the farmer by increasing their income,” Kagwe said, adding that the global sugar industry has for years concentrated too heavily on “the sweetness of sugar and trade” while neglecting the welfare of farmers and workers.

He said diversification into ethanol and other sugar by-products is necessary if the sector is to remain viable in the face of modern economic challenges and global fuel disruptions.

“We are now thinking about ethanol seriously from sugar especially with the global disruption of fuel prices,” said Kagwe.

In remarks that signaled a significant departure from Kenya’s traditional sugar policies, the CS suggested that sugar itself may eventually stop being the primary product derived from sugarcane.

“We want sugar to become a by-product in Kenya, not the only product,” he said.

For decades, Kenya’s sugar industry has largely revolved around sugar manufacturing despite chronic losses, ageing factories, mounting debts and delayed payments to farmers across state-owned mills.

The government is now studying Brazil’s integrated sugarcane economy where ethanol production, electricity cogeneration, industrial alcohol and sustainable biofuels have transformed sugarcane into a major industrial crop.

Kagwe said reforms under the Sugar Act 2024 are already laying the foundation for modernization through investments in ethanol production, cogeneration and value addition.

According to the CS, the future of the sugar industry lies beyond sugar itself and increasingly in green energy, industrial ethanol, sustainable packaging and circular economy solutions.

The government further linked ethanol production to climate resilience and energy security, arguing that locally produced biofuel could reduce dependence on imported petroleum while creating a stable market for cane farmers.

Kenya’s sugar industry currently supports more than six million people directly and indirectly, particularly in western Kenya where entire local economies rely heavily on cane farming.

With global fuel prices remaining volatile and countries under pressure to adopt cleaner energy alternatives, Kenya’s planned shift toward ethanol production could significantly reshape both the country’s energy sector and the future of its sugar industry.