MANILA, Philippines - The development of ethanol as an energy source may be hampered this year by the looming El Niño phenomenon which is expected to linger throughout the year, an industry official said.
Bronzeoak Philippines director and treasurer Don Mario Dia said if this weather disturbance occurs, the production of ethanol will be greatly affected.
“Overall, if the phenomenon will prevail, the scarcity of sugarcane will bring prices higher both on feedstock and ethanol,” he said.
Dia also warned that this may also trigger a rise in the prices of ethanol products which would, in turn, trigger an increase in gasoline prices.
Under the biofuels law, a mix of five-percent ethanol should be blended on all gasoline products sold in the country.
Dia noted that the landed cost of ethanol, which includes product, shipping and other costs, currently stands at P38 per liter.
He said there are still measures to implement that may help in the mitigation of the impact of the El Niño, such as more irrigation facilities.
Dia, however, noted that irrigation facilities are not usually considered in the investment plan for an ethanol manufacturing plants.
“No, they do not budget for that. Our case is different because some of our shareholders are planters,” he said.
He said Bronzeoak, however, is not affected as there is an abundance of water resources in Negros Occidental where the plant is located.
The government earlier mandated a minimum blend of the biofuel on gasoline products to cut the country’s reliance on imported oil, which accounts for more than 90 percent of the transport sector’s requirements.
At the same time, the use of the biofuel sought to reduce carbon emissions and promote countryside development.
However, the lack of local supply has forced many oil firms to import their ethanol needs.
Bronzeoak Philippines is the local unit of Bronzeoak Ltd. of the UK. The company has investments in San Carlos Bioenergy Inc., which operates an ethanol distillery and power cogeneration plant in Negros Occidental.
The plant has the capacity to produce between 30 million to 40 million liters of ethanol and eight megawatts of electricity.