DoE draws up ‘more realistic’ biofuel plan

The Department of Energy is drafting a revised five-year biofuel program to increase by 2030 the blend of ethanol in gasoline to 20 percent (E20) from the current 10 percent, and of coco-methyl ester (CME) in diesel products to 10 percent (B10) from the current 2 percent.

Energy Undersecretary Jose M. Layug Jr. said that under the new biofuel plan, the government would set realistic targets and outline the programs that needed to be implemented to attain its goals.

“Originally, when we passed the Biofuels Act in 2006, we said we would target to be the number one producer of biofuels. More than five years later, we are hardly producing ethanol. So we revisited our biofuels program, we looked at some of the issues and problems of the industry, and then set a new target for the next five to 10 years,” Layug explained.

According to the Energy official, the new blending targets of E20 and B10 are more realistic since the government has looked at both sides of the food versus fuel debate.

“We have to make sure … that we are well within the maximum limit that will be allowed for coconut producers to allot [their produce] for biodiesel,” Layug said, citing the coconut industry as an example. The same goes for ethanol—there is a limitation set by the Sugar Regulatory Administration as to how much sugarcanes we can allot for bioethanol production.”

The government hopes that the target blends will be implemented by 2030.

The revised biofuels program “will be more of a long-term planning, just like the National Renewable Energy Program. It will take long, but we will scale up blending until we reach the targets,” he said.

At present, there is an oversupply of coco-methyl ester in the country, which will allow for an increase in blending.

For ethanol, however, there is a huge lack of supply because there are only three companies that produce a combined 79 million liters of ethanol annually—a margin of the actual local demand, which is expected to run up to roughly 400 million liters, Layug said.

The three companies are San Carlos Bioenergy Inc., Roxol Bioenergy and Leyte Agri Corp.

But Layug is hoping that the issuance of a circular in December last year will help boost investments in the local energy sector.

The circular contained provisions to ensure that all the ethanol produced in the country will be purchased prior to the importation of the much cheaper ethanol.

It likewise appointed the National Biofuels Board to “publish a monthly price index for bioethanol every first day of the month based on data from the Sugar Regulatory Administration and Department of Agriculture to determine the reasonableness of the price of locally produced bioethanol.”

“So far, based on our monitoring, it has helped local production because all oil companies are mandated to buy locally produced ethanol before they import,” the energy official said.

“According to our reports, it has helped the local industry. So now we just need to have a momentum because, as you all know, we need 400 million liters of bioethanol annually and we have less than a fourth in local ethanol. There’s a lot of room for local production—we need to entice more investors to come in.”