The Impact of Directive 2009/28/EC on Energy Security and Agricultural Development in Ghana

Abstract: The growing demand for biofuels in the European Union is expected to have a significant impact on rural environments in sub-Saharan Africa. In the wake of Directive 2009/28/EC, Ghana experienced a rapid rise in foreign land acquisitions and direct investments to its agricultural sector. The possible implications of this development are multi-fold: While proponents of the EU biofuels policy stress the potential for agricultural development and improved energy security in the region, opponents of the Directive point towards the lack of binding social sustainability and indirect land use change criteria. As a means of assessing the validity of these opposing views, the paper investigates the impact of Directive 2009/28/EC on energy security and agricultural development in Ghana. The analysis is based on key informant interviews and a comprehensive literature review. It is concluded that the potential of host countries to generate benefits from the cultivation of energy crops largely rests on their institutional frameworks. In Ghana, the presence of financial incentives for export-oriented investments and the absence of a national blending mandate have limited the potential for improved energy security from the development of biofuels in the past. Moreover, the cultivation of biofuels appears to have at least partially resulted in negative socio-economic impacts in rural communities. Here, informal land rights and a lack of transparency in local land acquisition procedures present significant obstacles to the generation of positive spill-over effects. At the same time, the emergence of public opposition appears to have played an important role in slowing down the flow of investments to the Ghanaian biofuels sector. The study results raise questions regarding the feasibility of the EU biofuel targets in the absence of binding social sustainability criteria in the Directive.