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This rapid economic growth has stimulated an increase in domestic energy consumption. In addition, the demand of energy for transportation is expected to continue to grow due to increase in personal vehicle ownership. Lao government defines the strategy for development of each energy resource in the following subsections. 2.6.1 Promotion and development of bio-fuels Bio-energy provides an alternative fuel supply for the transportation sector and in the supply of energy to rural communities. Without domestic oil and gas resources, Lao PDR is completely dependent from external sources for its petroleum fuel requirements. The country imported 560 million liters of fossil fuels in 2010, a significant increase 5 percent a year. With higher economic growth prospects, oil imports are expected to high. This increases the country’s vulnerability to external supply disruptions and fuel price volatility, and the negative impacts to the country’s balance of payments. To reduce the importation of fossil fuels and optimize the use of marginal lands, the Government will encourage and actively promote development of fuel crops in the country with a preference for smallholder production under maintained community land ownership and control. This strategy aims to kick-start the development of the biofuels market in the country through the provision of incentives to farmers, domestic and foreign investors to engage in the production of biofuels for domestic utilization and at the same time monitor its development and ensure proper mitigation of negative impacts. The tentative vision for the promotion and development of biofuels are the following: • Substitute 10% of the transportation fuel demand by 2025; • Increase deployment of biofuels technologies in rural areas. In meeting these targets, the Government will carry out the following: • Issue a Biofuels Decree which provides an overall legal framework for setting the targets; stipulates specific development goals; defines incentives, support and obligations of private investors including small-scale producers who are committed to produce exclusively for the domestic market; and establishes institutional arrangement for the promotion and development of biofuels. In the case of oversupply of biofuels, export will be allowed but no incentives or subsidies will be given to investors for the production for export; • Establish and strengthen the capacity of a body/agency responsible for the promotion and development of biofuels as well as in setting reference price for biofuels; • Formulate a Biofuels Action Plan (biodiesel and bio ethanol) as blueprint for development. The Plan specifies feedstock for biodiesel and bio ethanol production based on detailed feasibility studies, impact assessment and cost-benefit analysis of the alternative feed-stocks with special focus on biophysical land availability and socio-economic feasibility. Promote and support contract farming schemes, small-scale family-based biofuels feedstock production, and biofuels producer associations, while limiting the development of large-scale investor concessions and managed production concessions, and ensure adequate control of existing concessions. Establish partnership with current investors to ensure stable supply of 17PDF Image | Renewable Energy Development Strategy in Lao PDR
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