DA, DOE eye cheaper feedstocks as bioethanol blend rises

MANILA, Philippines — The Department of Agriculture (DA) and the Department of Energy (DOE) are seeking cheaper feedstocks as the government moves to increase the bioethanol blend to lower pump prices.

Agriculture Secretary Francisco Tiu Laurel Jr. and Energy Secretary Sharon Garin recently met to find ways to lower feedstock costs, maximize idle distillery capacity, and expand local ethanol production to reduce import dependence.

READ: Philippines emerging as robust market for American ethanol

Discussions focused on exploring different feedstock options to boost local ethanol production, such as molasses and sugarcane juice from the sugar industry and locally produced corn.

“We are studying these options carefully, and there is potential for them to help bring down gasoline prices,” Tiu Laurel said in a statement on Tuesday.

The recent meeting aimed to raise the bioethanol blend from 10 percent to 15 percent.

Government officials said locally sourced feedstocks cost more than imported supplies, while locally produced bioethanol prices are double those of imported bioethanol.

They also said every increase in feedstock costs can lead to a P1 increase in ethanol prices.

Tiu Laurel said the problem hinges not on corn availability, but on securing it at a price that makes ethanol commercially viable.

The DA noted that locally produced corn has become the primary alternative feedstock to molasses and sugarcane juice, which currently supply most of the country’s ethanol production.

Domestic ethanol producers estimate that they will produce between 325 and 385 million liters per year from sugarcane-derived feedstock. Meanwhile, existing plants have a capacity of more than 500 million liters.

“Officials said that to protect the sugarcane industry, only the unused capacity could be sourced from corn, which would accommodate additional production without displacing existing agricultural output,” it said.

The agency also said it is looking at bolstering corn output through better seeds, mechanization, and contract farming between producers and ethanol plants.

However, the DA warned that higher demand from ethanol producers could raise corn prices for livestock raisers.“Diversifying feedstock could also reduce pressure on any single agricultural commodity, and possibly lower local bioethanol prices,” it added.

READ: Gov’t studying use of corn as bioethanol feedstock

The mandatory 10 percent blend has been in effect since 2011, while the 20-percent bioethanol blend is voluntary.

Last month, the DOE said it is working on the necessary policy and technical preparations, including developing the Philippine National Standards, to introduce a 15 percent ethanol blend in gasoline safely and effectively.

It also said the DA has an ongoing proposal to amend Joint Administrative Order No. 2008-1, Series of 2008, which prohibits using corn as a feedstock for bioethanol production. /pai