• Ethiopia sets mandatory biofuel blending targets through 2035

• Strategy aims to cut fuel imports, boost local biofuel production

• New SAF, ethanol, and waste-to-fuel plants need major investment

Ethiopia’s Ministry of Water and Energy (MoWE) has set mandatory biofuel blending targets for road fuels,  ethanol-gasoline and biodiesel-diesel,  and for Sustainable Aviation Fuel (SAF) by 2035.

The measure, reported by the press on Nov. 3, 2025, stems from a revised national biofuels strategy developed in June 2025 with support from the Roundtable on Sustainable Biomaterials (RSB). The strategy seeks to cut the country’s reliance on imported hydrocarbons, develop a local production industry, and set separate targets for ethanol, biodiesel, and SAF.

Implementing the plan will require raising hundreds of millions of dollars to build local industrial capacity. According to the World Bank’s June 2025 report Fueling Africa’s Flight, the strategy requires new industrial plants capable of converting molasses and other agricultural residues into liquid fuels.

For aviation, an Alcohol-to-Jet (ATJ) plant with a capacity of 2,000 barrels per day would require about $376 million in investment and could meet around 6% of national kerosene demand. The report also highlights the potential to convert municipal solid waste into liquid fuels using the Fischer-Tropsch process (MSW-FT), which would cost roughly $547 million for a comparable capacity.

At the same time, the ministry plans to rehabilitate ethanol distilleries linked to public sugar factories and build new ones to boost domestic ethanol production, allowing blends of 10% to 20% in road fuel.

These investments aim to ease a major financial burden: Ethiopia’s fuel import bill rose by 14.6% to $4 billion in the 2022/2023 fiscal year, accounting for 23.1% of total merchandise imports, according to the National Bank of Ethiopia (NBE). This foreign currency spending puts pressure on the balance of payments.

The success of Ethiopia’s biofuel strategy depends on the country’s ability to attract financing partners. The RSB reported that the government is considering creating a National Biofuel Fund to draw in private capital.

Abdel-Latif Boureima