‘Energy crisis to slow down ethanol, biodiesel demand’

MANILA, Philippines — The energy crisis may temper the country’s ethanol and biodiesel demand this year, as sluggish vehicle sales will limit growth, according to the United States Department of Agriculture (USDA).

In a recent report by its Foreign Agriculture Service, the USDA said fuel ethanol consumption growth may post a modest two percent expansion this year to 875 million liters from 860 million liters in 2025.

The international agency said growth is moderated by slower expansion of the fuel pool amid the national energy emergency.

The USDA added that the limited uptake of the 20 percent ethanol content for fuel could limit consumption.

Ethanol production is forecast to expand by two percent to 385 million liters, partially supported by lower molasses prices.

“The decline in molasses prices may be attributed to the seven percent increase in total molasses supply, comprising carry-over stocks and local production,” the USDA said.

About 80 percent of the country’s total domestic molasses output is used to produce fuel ethanol.

Similarly, biodiesel consumption may see a one-percent growth to 350 million liters in 2026 from the 346 million liters a year earlier.

The USDA said that the modest growth is due to the continuous implementation of the three percent biodiesel blend mandate but will be tempered by the decline in diesel consumption due to high prices.

“Consumption growth in 2026 has been partially offset by a surge in diesel prices stemming from energy supply disruptions tied to the fuel crisis,” it added.

The country’s biofuel output may reach 370 million liters this year, six percent higher than the 2025 level, driven by growing consumption of three percent biodiesel blend (B3) and the expansion of biodiesel producers to 15.

Citing industry contacts, the USDA said that existing biodiesel plants may not support the production of B5 to B7.

Stakeholders also noted expansion of the biodiesel industry could offer coconut farmers a “more predictable market, an advantage that would become more pronounced with the implementation of higher blend mandates.”