Sugar industry eyes P150-M ethanol plant

The local sugar industry is eyeing the possibility of putting up a P150-million ethanol processing plant that will use sugarcane as raw material in manufacturing the environment-friendly fuel additive.

Archimedes Amarra, executive director of the Sugar Masterplan Foundation Inc., said several players in the sugar industry are seriously studying options on how to bankroll the construction of the plant, possibly within three years.

The proposed ethanol plant would initially produce 20,000 to 50,000 liters per day.

He said using sugarcane as raw material for the production of ethanol will enable sugar producers and millers to improve their profitability, expand sugarcane areas and address surplus production. At the same time, the sustained production of ethanol could help the country reduce its dependence on imported oil.

Amarra said preliminary studies conducted by the sugar sector showed that ethanol produced locally and blended with gasoline to improve vehicles’ octane rating could initially trim the country’s volume of oil imports by five percent.

"At the outset, a five-percent reduction in the volume of the country’s oil imports of about four billion liters translates into ethanol production of about 200 million liters annually," he said.

He added that the industry is bullish about the project but wants government to come up with a policy that will encourage investors to go into ethanol production.

"Provided with adequate incentives, this project could be very viable. The whole country will benefit from a reduced importation of fuel. Ethanol is not only renewable but also environment-friendly and government can save on precious dollars while generating more jobs," Amarra added.

Ethanol as a blend to improve the octane rating of gasoline has been adopted by a lot of countries. Brazil is one of them, using ethanol at 24-percent blend, Thailand will be using ethanol next year at five percent blend. Japan, on the other hand, is importing more than 400 million liters of ethanol for their domestic requirements.

Ethanol is produced primarily by the fermentation of starch from grains (mostly corn), cash crops like cassava or sugarcane. It is most commonly used as an oxygenate in reformulated gasoline and in a gasoline blend called "gasohol." These fuels can be burned in gasoline engines. Specialized engines are necessary in order to burn pure ethanol.

Ethanol is a good candidate for an alternative fuel for use in transit buses because it is a liquid fuel and has several physical and combustion properties similar to both diesel and gasoline fuels.

The Department of Energy has recently endorsed Senate Bill 1677 authored by Sen. Aquilino Pimentel Jr. which primarily seeks to improve the condition of the sugar industry but as a complementary measure, also encourages the mass production of ethanol as an alternative transport fuel.

SB 1677 calls for the creation of a national fuel ethanol program similar to the National Alcogas Program in the 1970s. Among others, proposes that the Department of Trade and Industry incorporate the program into the Progressive Car and Truck Manufacturing Program. The Department of Finance will recommend the extent of reduction or elimination of sales taxes on ethanol to compete effectively with gasoline prices at gas stations.

It also mandates government and private financial institutions to provide credit to farmers’ cooperatives and individual farmers who participate in the mass production of raw materials for ethanol.