# Firewood and charcoal supply: Unit economics

How a cheap village sack becomes dear in the city

Source page: https://www.materialinsights.org/energy/e_traditional_fuel/economics/

What this tab covers What it costs to move a unit of energy this way: capital and operating costs, tariffs, utilisation and how it compares with the alternatives.

Charcoal is cheap to make but expensive by the time it reaches a city kitchen: transport, fees and trading margins multiply the price several times.

#### Key costs

| Measure | Value | Note |
|---|---|---|
| **Village price at kiln, Tanzania** | About 8,828 TZS per bag^[6](https://www.tfcg.org/wp-content/uploads/2018/06/TTCS-Technical-Report-4-Ishengoma-Charcoal-Market-Conditions-in-Tanzania-2016.doc.pdf) | 2016 |
| **Dar es Salaam wholesale price** | About 54,500 to 57,500 TZS per 70 kg bag^[6](https://www.tfcg.org/wp-content/uploads/2018/06/TTCS-Technical-Report-4-Ishengoma-Charcoal-Market-Conditions-in-Tanzania-2016.doc.pdf) | 2016; about six times the village price (calculated) |
| **Transport share of retail price, Malawi plantation charcoal** | 60 to 70%^[3](https://rael.berkeley.edu/old-site/Kammen.charcoal.pdf) | Long hauls of 300 to 600 km |
| **Lorry hire, Kenya** | About 13,000 KES per trip^[5](https://www.slu.se/globalassets/ew/org/andra-enh/uadm/global/pdf/analysis-of-the-charcoal-value-chain-in-kenya-doris-mutta.pdf) | 6 to 8 wheel truck, 2020 |
| **Kenya charcoal economy** | About 425 million USD per year^[5](https://www.slu.se/globalassets/ew/org/andra-enh/uadm/global/pdf/analysis-of-the-charcoal-value-chain-in-kenya-doris-mutta.pdf) | About 2.3 million tonnes, 2013 estimate cited in 2020 |
| **Tanzania charcoal sector** | About 650 million USD per year^[2](https://www.uncclearn.org/wp-content/uploads/library/charcoal.pdf)^[4](https://openknowledge.worldbank.org/bitstreams/6c4e03ca-a24d-5406-8559-308b3a1c6d35/download) | 2009 estimate, repeated by FAO in 2017 |

#### Where the money goes

| Item | Share or amount |
|---|---|
| **Producers** | About one third of final price (Tanzania)^[4](https://openknowledge.worldbank.org/bitstreams/6c4e03ca-a24d-5406-8559-308b3a1c6d35/download) |
| **Transporters and wholesalers** | About half of final price (Tanzania)^[4](https://openknowledge.worldbank.org/bitstreams/6c4e03ca-a24d-5406-8559-308b3a1c6d35/download) |
| **Official fees (royalty plus district and village)** | TZS 18,500 per bag if fully paid (calculated)^[6](https://www.tfcg.org/wp-content/uploads/2018/06/TTCS-Technical-Report-4-Ishengoma-Charcoal-Market-Conditions-in-Tanzania-2016.doc.pdf) |

If all official fees (royalty TZS 16,500, district cess 1,500 and village fee 500 per bag) were paid, they would add about twice the village price of a bag (calculated), which helps explain low compliance.

Charcoal competes with LPG and electricity, which need cylinders, stoves or connections that poor households often cannot afford up front.

#### Sources

1. [The charcoal transition: greening the charcoal value chain to mitigate climate change and improve local livelihoods](https://www.uncclearn.org/wp-content/uploads/library/charcoal.pdf) FAO, 2017
2. [Review of technologies for the production and use of charcoal (Kammen and Lew)](https://rael.berkeley.edu/old-site/Kammen.charcoal.pdf) Renewable and Appropriate Energy Laboratory, UC Berkeley, 2005
3. [Environmental Crisis or Sustainable Development Opportunity? Transforming the Charcoal Sector in Tanzania: A Policy Note](https://openknowledge.worldbank.org/bitstreams/6c4e03ca-a24d-5406-8559-308b3a1c6d35/download) World Bank, 2009
4. [Sustainable Business Models for Tree-based Value Chains in Sub-Saharan Africa: Analysis of the Charcoal Value Chain in Kenya (Mutta)](https://www.slu.se/globalassets/ew/org/andra-enh/uadm/global/pdf/analysis-of-the-charcoal-value-chain-in-kenya-doris-mutta.pdf) Swedish University of Agricultural Sciences (SLU), Formas project, 2020
5. [Charcoal Market Conditions in Tanzania (TTCS Technical Report 4, Ishengoma)](https://www.tfcg.org/wp-content/uploads/2018/06/TTCS-Technical-Report-4-Ishengoma-Charcoal-Market-Conditions-in-Tanzania-2016.doc.pdf) Tanzania Forest Conservation Group / TTCS project, 2016

## Other sections

- [Summary](https://www.materialinsights.org/energy/e_traditional_fuel/index.md)
- [Overview](https://www.materialinsights.org/energy/e_traditional_fuel/overview/index.md)
- [Correlation](https://www.materialinsights.org/energy/e_traditional_fuel/correlation/index.md)
- [How it works](https://www.materialinsights.org/energy/e_traditional_fuel/explain/index.md)
- [Efficiency and losses](https://www.materialinsights.org/energy/e_traditional_fuel/efficiency/index.md)
- [Technology advances](https://www.materialinsights.org/energy/e_traditional_fuel/advances/index.md)
- [Value chain](https://www.materialinsights.org/energy/e_traditional_fuel/valuechain/index.md)
- [Geopolitics and regulation](https://www.materialinsights.org/energy/e_traditional_fuel/geopolitics/index.md)
- [Impact on the biosphere](https://www.materialinsights.org/energy/e_traditional_fuel/biosphere/index.md)
- [Relationships](https://www.materialinsights.org/energy/e_traditional_fuel/links/index.md)