Peru is rich in natural resources, including both natural gas and petroleum deposits. Big projects, like the Camisea natural gas project have transformed Peru’s energy matrix, thereby reducing the country’s dependence on imported diesel. However, rural electricity access in Peru remains below 30% (very low for Latin America), and over 30% of the rural population1 still depends on traditional solid biomass for its energy needs. In 2003, the Peruvian government and policy‐makers approved the Ley de Promoción del Mercado de Biocombustibles (Ley N° 28054), which seeks to diversify the fuel market and to promote agro‐industrial development, generate employment and reduce environmental pollution. To this end (in 2007) obligatory national blending targets of biodiesel (2% from 2009; 5% from 2011) and ethanol (7.8% from 2010) were announced. At the same time, Jatropha was formally declared of “National Interest” for production of biodiesel in the Amazon. As a result, several initiatives for bio‐ethanol and biodiesel production started in the country. With regard to biodiesel, production plants were installed (main ones: Industrias del Espino; Pure Biofuels; Heaven Petroleum Operators) with a total production capacity of 270,000 ton/year2. Various initiatives were also taken for the production of energy crops such as Jatropha.
The announced biodiesel blending target was attained, and 5% biodiesel is currently blended in all diesel sold in the country. Although national production exists, the majority of this biodiesel has been imported from the US, Ecuador and Argentina (with no Jatropha biodiesel produced so far in Peru). With regard to ethanol, the 7.8% target was only implemented in some regions in the northern coast (Piura, Lambayeque, Tumbes) with sugar cane ethanol produced in Peru, and an adjusted schedule was proposed for gradual implementation in the whole country.