The consortium developing Mozambique LNG plans to establish a coconut biodiesel facility in Palma, Cabo Delgado, with a proposed annual production capacity of approximately 5,000 tonnes of B100 biodiesel for use in natural gas project operations.
The initiative is being advanced by TotalEnergies EP Mozambique Area 1 (TEPMA1) as part of the decarbonisation strategy for the Mozambique LNG project. It is also designed to build a local biofuel supply chain around coconut production, linking small-scale farmers with industrial processing and a long-term fuel buyer.
TEPMA1 has launched an expression-of-interest process seeking companies, investors or consortia capable of financing, designing, constructing, owning and operating the integrated facility under a Finance-Build-Own-Operate model.
Coconut biodiesel facility planned for Palma
The proposed facility would combine coconut oil extraction and refining with the infrastructure needed to collect and aggregate raw materials from farmers in the surrounding area.
According to the tender documentation, the plant would have an approximate nominal capacity of 5,000 tonnes of B100 biodiesel per year. The development would include raw-material collection centres and a network of local aggregators to connect coconut producers with the processing facility.
The project is intended to use coconuts purchased from small-scale farmers under what TEPMA1 describes as fair and certified conditions. This approach would make agricultural production a central component of the proposed fuel supply chain rather than treating feedstock procurement as a separate industrial activity.
Mozambique LNG is expected to serve as the anchor buyer under a long-term offtake agreement. The proposed arrangement is intended to provide a defined market for the biodiesel while supporting the commercial viability of the facility.
More than 3,000 farmers targeted
The biodiesel initiative forms part of a wider agricultural development programme in the Palma area.
TEPMA1 says the programme includes nurseries, technical assistance and support for more than 3,000 farmers, alongside plans for the planting of more than 440,000 coconut seedlings.
The company expects the agricultural component to increase community incomes while creating a more sustainable source of coconut feedstock for the proposed biodiesel plant.
Beyond fuel production, the initiative could generate employment and economic activity through coconut cultivation, collection, processing and the marketing of coconut-derived products. However, the ultimate scale of these benefits will depend on the development and operation of the proposed facility and the associated agricultural supply chain.
Biodiesel linked directly to LNG operations
The proposed project gives the biodiesel facility a defined industrial market: supplying low-carbon fuel to operations associated with Mozambique LNG.
This distinguishes the initiative from a conventional biodiesel project primarily targeting the wider transport-fuel market. The proposed long-term offtake arrangement would connect local agricultural production directly with the energy project’s fuel requirements.
For the LNG consortium, the development is part of a broader effort to reduce the carbon intensity of project operations. For the agricultural sector in Cabo Delgado, it provides a potential industrial outlet for expanded coconut production.
The Finance-Build-Own-Operate structure also means that TEPMA1 is seeking an external party or consortium to take responsibility for developing and operating the production facility rather than directly undertaking all of the industrial investment itself.
Mozambique LNG resumes after security suspension
The proposed biodiesel development comes as Mozambique LNG moves forward again following a prolonged suspension.
The Area 1 LNG project in the Rovuma Basin officially resumed in January 2026 after almost four years of suspension linked to insecurity caused by armed attacks in Cabo Delgado.
TotalEnergies has said the project is now almost 50% complete, with between 7,000 and 8,000 workers employed at the Afungi site.
During the presentation of TotalEnergies’ second-quarter 2026 results, chief executive Patrick Pouyanné said the project remained on track for the start of LNG production in 2029.
The Mozambique LNG development is valued at approximately US$20 billion (€17.4 billion) and is expected to produce up to 13 million tonnes of LNG annually once operational.
Coconut biodiesel adds a local component to Mozambique’s gas development
Mozambique is developing several major projects to exploit its substantial natural gas resources in the Rovuma Basin.
Coral Sul, operated by Eni, has been producing LNG since 2022. Coral Norte, approved in 2025, is expected to expand liquefaction capacity from 2028, while ExxonMobil-led Rovuma LNG is expected to reach a production capacity of 18 million tonnes per year after 2030.
Against this backdrop, the proposed coconut biodiesel plant represents a smaller but distinct component of Mozambique’s wider gas development strategy. Rather than adding LNG capacity, it seeks to establish a locally sourced renewable fuel chain around an existing industrial project.
Bioenergy Business Analysis
The proposed 5,000-tonne coconut biodiesel facility is significant because it connects three objectives within a single development: reducing the carbon intensity of LNG operations, creating an industrial market for locally produced agricultural feedstock and developing economic activity around Cabo Delgado communities.
The proposed long-term offtake arrangement is particularly important commercially. A defined anchor buyer can provide greater certainty for a biofuel project than relying solely on an open market, while the Finance-Build-Own-Operate model shifts the responsibility for financing and operating the facility to the selected developer or consortium. The project’s viability will nevertheless depend on the ability to establish a reliable coconut supply chain, develop the processing infrastructure and meet the required fuel specifications.
The initiative also illustrates how biofuels can be incorporated into large energy projects through local feedstock development rather than being treated solely as a standalone transport-fuel business. Its progress will therefore be relevant to biofuel developers, agricultural investors and energy companies exploring integrated renewable-fuel supply chains in emerging markets.
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