This introductory paper sets out the rationale for revisiting questions surrounding biofuel futures in Southern Africa and exploring the case for the establishment of a regional market.

Mozambique is one of the most promising African countries for producing biofuels and the national biofuel policy of 2009 identifies measures to incentivize biofuel production.

Potential biofuel demand in South Africa is estimated to increase to 1550 million litres by 2025 due to mandatory blending rates. Land and water constraints, however, limit the ability for domestic production.

The strong linkages to food security and the environment place biomass energy at the heart of sustainable development.

Biofuel production can have conflicting impacts on economic growth, food and energy security, and natural resources. Understanding these trade-offs is crucial for designing policies that are consistent with the Sustainable Development Goals.

"Rising world prices for fuel and food represent a negative terms-of-trade shock for Mozambique. The impacts of these price increases are analyzed using various approaches.

"Large private investments in biofuels are presently underway in Mozambique. This paper uses an economywide model to assess the implications of these investments for growth and income distribution.