Chemrez fully utilizes biodiesel plant ahead of mandated blend hike

Chemrez Technologies Inc. President Dean Lao Jr.

TANAUAN, Batangas — The chemical manufacturing unit of D&L Industries Inc. has begun fully utilizing its coco-biodiesel plant in Quezon City to prepare for a possible increase in demand from oil firms in compliance with a new government directive.

Chemrez Technologies Inc. President Dean Lao Jr. told reporters on Monday that their biodiesel plant was able to produce 90 million liters of supply per year.

He added that they may repurpose some of the company’s facilities intended for other chemicals to eventually produce biodiesel.

“We also have to look into it to see if we can get a good return on investment,“ Lao said during a media tour of the company’s new P10.5-billion manufacturing plant in Batangas province.

This comes in response to the Department of Energy’s (DOE) mandate to oil firms to implement a  three percent coco methyl ester blend in all diesel fuel sold nationwide from two percent previously. This became effective on Tuesday, Oct. 1.

READ: Higher biodiesel blend for power generation eyed

Under DOE Circular No. 2024-05-0014, the mix will increase to four percent by October 2025 and then to five percent by October 2026.

This policy would help in lowering the amount of imported petrochemical fuel used in diesel, and instead use more sustainable resources.

“This directive from the DOE is a huge step toward progress and the development of the biodiesel and coconut industry in general,” Lao said.

According to Lao, they are also considering the expansion of the Batangas plant to accommodate a possible increase in biodiesel demand.

READ: Increased biodiesel use a win for industry and environment, says D&L

D&L currently produces coconut oil-derived ingredients and finished products for food, personal hygiene, and home care segments in the 26-hectare facility, which started operations in July.

DOE data show that as of last year, demand for diesel fuel reached 11.09 billion liters, down slightly from 11.12 billion liters in 2022.

It  earlier said that the increase in the coco methyl ester blend in all diesel fuel old nationwide is expected to create “additional market” for coconut farmers, biodiesel producers, and other stakeholders in the coconut industry.

The DOE also noted that a higher blend of five percent would result in diesel fuel cost savings of P4.17 per liter.