NATIONAL BiIO-FUELS POLICY AND INCENTIVES

What Is This Policy?

The National Biofuels Policy & Incentives is Nigeria's dedicated framework for developing a sustainable domestic biofuels industry — promoting the large-scale production and blending of bioethanol and biodiesel from agricultural feedstock to diversify the national fuel mix, create rural employment, and reduce dependence on imported petroleum products.

Who Does It Target?

Farmers, agribusinesses, and cooperatives cultivating energy crops such as cassava, sugarcane, sorghum, jatropha, and palm oil Biofuel producers, blenders, and downstream petroleum marketers Rural communities in agriculture-intensive geopolitical zones Private investors and international partners seeking incentivised bioenergy opportunities in Nigeria

What Does It Aim to Achieve?

Establish a commercially viable domestic biofuels industry producing bioethanol and biodiesel at scale Mandate biofuel blending — 10% bioethanol blend (E10) in petrol and 20% biodiesel blend (B20) in diesel — to reduce fossil fuel imports Create rural jobs and income through energy crop cultivation and processing Reduce greenhouse gas (GHG) emissions from the transport sector in line with Nigeria's NDCs and net-zero 2060 target

Key Features

Mandatory Blending Targets: E10 (10% bioethanol in petrol) and B20 (20% biodiesel in diesel) mandated as the national standard Feedstock Priority: Cassava, sugarcane, and sorghum (bioethanol); palm oil, jatropha, and soybean (biodiesel) — leveraging Nigeria's agricultural base Fiscal Incentives: Tax waivers, import duty exemptions, concessional loans, and pioneer status for biofuels producers and blending infrastructure investors Agricultural-Energy Nexus: Deliberately links crop production to energy value chains — every biofuels investment drives rural agricultural development Biofuels Steering Committee: Multi-ministerial coordination committee overseeing policy implementation, monitoring, and standards development NNPC Blending Mandate: NNPC and licensed petroleum companies required to blend biofuels before distribution through the downstream supply chain

Current Status

Rollout Stage: Active — embedded in the National Energy Policy 2022 and operationalised under the Petroleum Industry Act 2021 Implementing Bodies: Federal Ministry of Petroleum Resources, Energy Commission of Nigeria (ECN), NMDPRA, FMARD, and Standards Organisation of Nigeria (SON) Coverage: National, with feedstock production zones identified in North-Central (cassava, sorghum), South-West (palm), and South-South (palm/jatropha) Challenges: Implementation has been slow due to inadequate feedstock supply, blending infrastructure gaps, and price competition with subsidised petrol Funding: Private sector investment, federal incentive windows, and Biofuels Development Fund (BDF) established under the policy

How to Access

Farmers & Agribusinesses: Apply for biofuels feedstock support and concessional financing through FMARD and Bank of Agriculture Producers & Investors: Apply for pioneer status and fiscal incentives via FIRS and the Nigerian Investment Promotion Commission (NIPC): nipc.gov.ng Blenders: Obtain blending licences from NMDPRA: nmdpra.gov.ng Contact: Energy Commission of Nigeria: ecn.gov.ng | Ministry of Petroleum Resources: petroleum.gov.ng

Impact & Metrics

If fully implemented, E10 blending could save approximately 600,000 barrels/day of petrol imports annually Potential to create 200,000+ rural jobs across feedstock-to-fuel value chains Nigeria produces ~59 million tonnes of cassava annually — the world's largest producer — making bioethanol feedstock immediately available

Official Resources

Website: petroleum.gov.ng | ecn.gov.ng | nmdpra.gov.ng Contact: Federal Ministry of Petroleum Resources, NNPC Towers, Central Business District, Abuja Policy Summary | Source: ECN, FMP, PIA 2021, IEA, NNPC | February 2026

Legal Framework

The National Biofuels Policy and Incentives operates under the Energy Commission of Nigeria Act, the National Energy Policy, and the Environmental Impact Assessment Act 1992. It aligns with the National Agricultural Policy, the Electricity Act 2023 (on alternative energy sources), Nigeria's Nationally Determined Contributions under the Paris Agreement (UNFCCC), and the International Energy Agency (IEA) guidelines on sustainable biofuel policy design.