San Miguel revives interest in local ethanol projects

Conglomerate San Miguel Corp. planns to invest in the local ethanol industry after the government has finally issued the much-awaited guidelines that are critical to boosting the ailing sector.

In an interview, San Miguel president Ramon S. Ang confirmed that the company has renewed its interest in potentially building an ethanol plant as this could also secure the ethanol requirements of Petron Corp., in which it has a 68-percent interest. Oil companies are mandated to blend 10-percent ethanol in their gasoline products.

Ang, however, said that the company was still studying the viability of such venture.

Originally, San Miguel was among the companies that submitted a letter of intent to the state-run Sugar Regulatory Administration, asking for assistance in the validation, allocation, identification and registration of land where feedstock crops for ethanol could be grown.

Based on SRA documents, San Miguel was then looking at 22,000 hectares of land in Bago, Negros Occidental; 18,000 ha in Batangas; 18,000 ha in Tarlac; and another 18,000 ha in Ilocos. However, no progress has been reported following its submission as the ethanol industry then had to hurdle a number of challenges, including cheaper ethanol imports, lack of a pricing mechanism and guidelines that would ensure that all locally produced ethanol would be purchased prior to importation.

Meanwhile, Energy Secretary Jose Rene D. Almendras disclosed that the government has already identified about 100,000 hectares of idle land suitable for growing feedstock for ethanol plants. Portions of these areas are reportedly located in Quezon, Leyte and Isabela.

It was not made clear, however, how these lands would be allocated among those interested to put up an ethanol facility in the country, or if those that have earlier sent letters of intent seeking for land validation and allocation like San Miguel would be given priority.

Three companies—San Carlos Bioenergy Inc., Roxol Bioenergy and Leyte Agri Corp.—produce a combined 79 million liters of ethanol a year. This could hardly meet actual local demand, which is expected to run up to 500 million liters.

Within the first quarter of this year, the Department of Energy expects Green Futures Innovation to start commercial operations of its 54-million-liter ethanol facility in Isabela.

The government has been pushing for the development of alternative fuels like ethanol as this would play a crucial role in helping cushion the impact of rising global oil prices.—Amy R. Remo