Group hits CAMPI statement on ethanol subsidy, sugar supply

The Philippine Fuel Ethanol Alliance has branded as erroneous and misleading statements issued by the Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) on the use of ethanol in the country.

CAMPI officials earlier said government would need to subsidize ethanol production and that producing ethanol will severely affect the country’s sugar supply.

The automakers also claimed that using 10 percent ethanol-blended gasoline, or E10, would be more expensive than using conventional gasoline.

"What subsidy are they talking about? The Philippine government does not need to subsidize ethanol production. What our government needs to do is to merely put in place a policy framework that will aid the establishment of a local biofuels industry," the ethanol group emphasized.

In a statement, the alliance noted that other countries that have implemented a biofuel program, including European Union members and the United States, have directly subsidized the program as they have realized the great importance of developing a new industry sector that would institutionalize the use of biofuels.

The group reiterated its call on the government to support the production and use of biofuels, especially ethanol, to address the energy crisis. It pointed out that ethanol has been established to be much cleaner than gasoline, and because it is sourced from locally grown crops such as sugarcane, corn, and cassava, ethanol cannot be depleted unlike oil, the continued escalation of prices of which has already taken its toll on ordinary Filipino consumers and entrepreneurs.

The group also said they have been conducting studies about ethanol production sufficiency and its effect to consumers, farmers, and most importantly, to the country.

In 2005, the ethanol alliance completed a policy study which it presented to Congress and to President Arroyo during the groundbreaking ceremony of San Carlos Bioenergy Inc., the country’s first ethanol production plant.

"Our study has concluded that ethanol production and use helps achieve the following benefits: energy security, environmental quality, employment in the countryside, and economic progress. CAMPI should be supportive of these developmental goals. Their opposition to ethanol clearly shows that they are willing to sacrifice national interest in favor of their own," it stressed.

The alliance revealed that based on industry projections and other studies, ethanol can be produced at a cost significantly lower than gasoline. Based on the latest estimates, ethanol can be produced at a cost of between P27 to P35 per liter, which is still significantly lower than unleaded gasoline’s current standard retail price of around P44 per liter.

"The short-term goal is, yes, to find a cheaper alternative to gasoline. But the long-term goal is to be capable in locally producing an alternative to gasoline. Beyond a cheaper price, ethanol will insulate the country from future volatilities of world oil prices," the Alliance added.

The Philippines has lagged behind other countries in adopting policies that support domestic ethanol production. In Asia, Japan has already set a schedule to mandate the use of 10 percent ethanol while China seeks to replace 15 percent of its oil consumption with biofuels by 2020. Malaysia and Indonesia have each established a biofuels research hub to entice local and foreign investors.