Coconut oil millers seek hike in biodiesel blend to 5%

MANILA, Philippines - The CIIF-Oil Mills Group (CIIF-OMG) has asked the government to raise the mandated biodiesel blend from the current two percent to five percent to spur the growth of the local coconut industry.

In a letter to Energy Secretary Angelo T. Reyes, Jesus L. Arranza, president and CEO of CIIF-OMG, said an “upward adjustment of the minimum blend would result in sustained demand for copra/crude coconut oil, lessen dependence on foreign buyers of crude coconut oil, generate savings in foreign exchange that would otherwise go out to pay imported oil, and increase the utilization of the refining capacity of biodiesel producers.”

Arranza pointed out that “domestic production of copra has been abundant since early last year, and is expected to further increase this year.”

On the other hand, Arranza warned, “the price of petroleum is expected to continue rising because of increasing demand in the world market due to the global economic recovery.”

Arranza assured Reyes that the CIIF-OMG and other crude coconut oil producers in the country would have enough capacity to support an upward adjustment in the biodiesel blend.

Arranza explained that a five-percent blend “would require an estimated annual 350,000 metric tons of crude coconut oil. This would translate only to 23 percent of the annual crude coconut oil production in the country at 1.5 million metric tons, and can very well be supplied by the various coconut oil mills.”

He said the CIIF is pushing for the increase in the blend to increase the non-traditional market for coconut oil which would, in turn, benefit more than three million coconut farmers in the country.

Increasing the use of coconut oil would also “substantially contribute to the reduction of pollution in the country brought about by the use of fossil fuels, he added.