Biofuels program under review

Energy authorities are calling for more investments in biofuels as officials review a current program mandating the blending of biodiesel and ethanol in locally distributed diesel and gasoline.

There has been market buzz that local biofuel suppliers are still unable to meet required demand, nearly a decade since the Biofuels Act of 2006 started creating a market for plant-based fuel additives.

The measure aims to curb the country’s fuel imports, bring value-added income to farmers, and lessen vehicle emissions with “cleaner” fuel blends.

Currently, the mandated blend for coconut based biodiesel is 2 percent under the Biofuels Act of 2006 and authorities are uncertain whether a higher blend of 5 percent may be implemented despite initial enthusiasm from coconut farmers and the Department of Agriculture, DOE Undersecretary Zenaida Monsada said in an interview.

“The target for B5 (5 percent blend), really, under the biofuels program, is 2015. We are looking into whether we can still pursue that,” Monsada said.

Being the top coconut oil producer, the Philippines has so far been able to locally source the two percent blend for biodiesel. However, recent typhoons have badly hit coconut-producing areas. Combined with the declining coconut oil production from aging trees and loss of productivity from recent infestations, authorities say they want to make sure local farmers can keep up with demand if the blend rate is increased to B5.

Compliance with the current 10-percent mandate for ethanol blend in gasoline seems more challenging for the Philippines due to lack of capacity of existing sugarcane distilleries, low productivity, and high production costs, according to a study by the US Department of Agriculture-Foreign Agricultural Service.

DOE director Mario Marasigan said the government wanted to encourage more private firms to put up distilleries or sugarcane- and biomass (bagasse)-based bioethanol production plants.

A study by the United Nations Conference on Trade Development or Unctad said the Philippines would likely remain a net importer of fuel. This means the Biofuels Law has not met its intended outcome. Unctad said local oil companies have been importing ethanol, mainly from Thailand, to comply with the government’s 10-percent ethanol blend or E10 requirement.

However, with Thailand’s increasing alternative fuel use (thereby consuming more of its own ethanol), the Philippines may have to start importing from as far away as the US and Brazil, which will lead to higher cost due to transportation.