Senate urged to speed up passage of Biofuels Bill

The Philippine Fuel Ethanol Alliance (PFEA) is urging the Senate to speed up the mandate of the use of fuel ethanol as an alternative to gasoline.

"This measure, which promotes fuels derived from locally grown crops, will be a means to achieve energy security against a backdrop of ever-escalating world oil prices," said PFEA in a recent briefing at the Senate.

The Biofuels Bill is currently pending in the Senate. Among the key provisions of the bill are to mandate the use of fuel ethanol as a blend to gasoline, grant fiscal and non-fiscal incentives for fuel ethanol producers, and create a multi-sectoral Philippine Biofuels Board that will monitor the nascent biofuels industry.

The bill was approved in the lower House in November 2005.

During its recent briefing, PFEA clarified questions about the viability and sustainability of mandating fuel ethanol use in the Philippines. The briefing included the Senate staff, representatives from the Sugar Regulatory Administration, USAID’s Sustainable Energy Development Program, World Wildlife Fund, and Confederation of Sugar Planters.

A persistent issue being raised a number of car companies is the compatibility of fuel ethanol with the country’s existing car fleet. Such an issue has stemmed from the perceived negative effect of gasoline-ethanol blends to particular engine parts and worries that the proposed mandate as provided in the Biofuels Bill will not allow for any lead time for the general public to prepare.

PFEA said such fears are unfounded. On the contrary, the group said, the ethanol mandate will benefit car owners in combating rising prices of gasoline.

The Biofuels Bill has scheduled the mandate two years after the effectivity of the measure, which should be sufficient to prepare the public via education campaigns and information drives.

Another concern is on the sufficiency of crop volume to supply ethanol production requirements. Should the mandate be approved, the expected ethanol requirement will require the establishment of at least 14 ethanol production facilities with a capacity of around 100,000 liters per day over a course of 10 years.

Data gathered by the PFEA reveal that there will be enough crop volume to meet the requirements of the mandate.

For sugarcane alone, all fuel ethanol requirements can actually be supplied by converting excess sugar and sugarcane production. Based on industry data, new sugarcane areas are also readily available.

According to the Sugar Regulatory Administration, the Philippines has a potential 326,000 hectares of land that can be planted with sugarcane.

PFEA stressed that in order for the Philippines to harvest fuel ethanol’s wide-ranging benefits, the government needs to attract private sector investors through a mandate, which will create the domestic market for the biofuel.

"Investors have expressed that the government must first indicate its seriousness to address the energy security problem by placing the proper policies to attract investments from the private sector."