Kenya eyes sugarcane ethanol to tame fuel prices and expand sugar sector
Kenya plans to revive its sugar industry by expanding ethanol production using Brazil’s sugarcane-to-fuel model. The government aims to integrate ethanol into fuel policy, reduce oil dependence, create rural jobs, and transform sugarcane into a strategic energy crop supporting Kenya’s bio-economy and energy security goals.
Kenya is now looking beyond table sugar and into ethanol production as the next frontier for reviving the sugar industry, cutting fuel costs and creating thousands of rural jobs, following lessons drawn from Brazil’s globally celebrated sugarcane-to-fuel model.
During the opening of the 68th International Sugar Organisation Seminar in Diani, on Tuesday, May 26, 2026, Deputy President Kithure Kindiki and Agriculture Cabinet Secretary Mutahi Kagwe signalled a major policy shift that could fundamentally change how Kenya views sugarcane not merely as a source of sugar, but as a strategic energy crop capable of easing the country’s fuel burden.
The seminar heard how Brazil has successfully used ethanol-blended fuel to stabilise gasoline prices, reduce oil dependence and generate billions of dollars through its sugarcane economy.
Presentation slides shown during the conference indicated that ethanol blending in Brazil has significantly lowered fuel prices, with ethanol-based fuel proving far cheaper than conventional gasoline. Brazil has, over the past five decades, substituted more than four billion barrels of gasoline with ethanol, saving the country hundreds of billions of dollars while strengthening energy security.
Deputy President Kindiki announced that the government will review the Sugar Act and existing regulations to firmly anchor ethanol production within Kenya’s legal and economic framework. He said the government will also work closely with the Energy and Petroleum Regulatory Authority (EPRA) to develop regulations on fuel blending.
The move signals Kenya’s clearest indication yet that sugarcane ethanol could become part of the country’s long-term fuel strategy amid volatile global oil prices and growing pressure on foreign exchange reserves.
Sugar focus shifts beyond
At the center of the new thinking is Agriculture Cabinet Secretary Mutahi Kagwe, who told delegates Kenya can no longer focus narrowly on sugar production while ignoring the broader economic opportunities within the sugarcane value chain.
“We have focused completely on the farmer by increasing their income,” Kagwe said, warning that the global sugar industry has concentrated too much on “the sweetness of sugar and trade” while neglecting the welfare of farmers and workers who sustain the industry.
He said Kenya must urgently diversify into ethanol and other sugar by-products if the sector is to survive modern economic pressures and global energy disruptions.
“We are now thinking about ethanol seriously from sugar especially with the global disruption of fuel prices,”CS Kagwe said.
In what could become a defining policy direction for Kenya’s sugar sector, CS Kagwe suggested that in future, sugar itself may cease being the primary product from sugarcane.
“We want sugar to become a by-product in Kenya, not the only product,” he said.
The remarks mark a dramatic shift from decades of policy centered almost entirely on sugar manufacturing despite persistent losses, ageing factories, delayed farmer payments and mounting debt across state-owned mills.
Kenya eyes bio-economy shift
Kenya is now studying Brazil’s integrated sugarcane economy where ethanol, electricity cogeneration, industrial alcohol and sustainable biofuels have transformed sugarcane into a strategic industrial crop.
CS Kagwe said the government wants to learn from Brazil and the International Sugar Organisation on how Kenya can transition into a modern bio-economy powered by sugarcane.
The Cabinet Secretary noted that Kenya’s reforms under the Sugar Act 2024 are already laying the groundwork for industrial modernisation, including investment in ethanol production, cogeneration and value addition.
He said the future of sugar lies beyond sugar itself and into green energy, industrial ethanol, sustainable packaging and circular economy solutions.
The government also linked ethanol production to climate resilience and energy security, arguing that locally produced biofuel could reduce dependence on imported petroleum while creating stable markets for farmers.
The sugar industry currently supports more than six million Kenyans directly and indirectly, particularly across western Kenya, where entire local economies depend on cane farming.
With global fuel prices remaining unpredictable and pressure mounting on governments to adopt cleaner energy alternatives, Kenya’s push toward ethanol could reshape both the country’s energy landscape and the future of its sugar belt.
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Source : People Daily
