Oil firms allowed to bring in ethanol

The National Biofuels Board has allowed local oil companies to import 236 million liters of ethanol this year, enabling them to meet government’s fuel blend requirements.

Rosemarie S. Gumera, manager at the planning and policy department of the Sugar Regulatory Administration (SRA), told the Inquirer that this volume “took into consideration the estimated volume of gasoline and volume of local ethanol production for 2011.”

“There are no recommendations yet for ethanol imports for 2012. But take note that oil companies cannot import unless locally produced ethanol is utilized first. [This is] the subject of the guidelines on the utilization of locally produced bioethanol that will be soon issued by Department of Energy,” Gumera said.

Demand for ethanol this year is estimated to reach 265 million liters, while estimated supply remained marginal at 29 million liters, Gumera disclosed.

According to Gumera, the estimated supply for 2011 was based on assumptions that San Carlos Bioenergy Inc. and Roxol Bioenergy will resume commercial operations either this August or September.

However, production from these companies was expected to still fall short of capacities.

SCBI’s facility was meant to produce as much as 40 million liters a year while Roxol Bionergy has the capacity to generate 33 million liters a year.

It was not made clear if the ethanol plant of Leyte Agri, which can produce 10 million liters annually, is operating.

Oil companies are currently mandated to produce gasoline with 5 percent ethanol. And under Republic Act No. 9367, or the Biofuels Act, companies will have to increase this ratio to 10 percent by 2011.

The deadline for compliance, however, was extended to August 2011.

By next month, oil companies will thus be mandated to blend gasoline with 10 percent ethanol, with exemptions for the higher and lower octane gasoline.

The full implementation of this 10 percent blending will be implemented in February 2012.

The transition period given to all concerned stakeholders of the local ethanol industry would allow them to prepare, increase ethanol supply and firm up the necessary agreements for the mandated blending—especially since local supply cannot fill the demand.