San Carlos Bioenergy halts production pending resolution of tariff issue

MANILA, Philippines - San Carlos Bioenergy Inc. (SCBI), which supplies ethanol to Petron Corp., has stopped its production pending resolution of the tariff issue on imported ethanol.

SCBI chairman Jose Maria Zabaleta said they decided to temporarily close down their operations to cut their losses.

“We lost a fortune, so having lost money and there’s no expansion plan, we are at the moment closed. We’re waiting for new developments. We’re just waiting for the government to give us a proper tariff,” he said.

He said since last year, they have been suffering from the problem which if not resolved by the government will cause great damage to the local ethanol industry.

“What happened last year is we started operations and they were very successful operations, but the price of the product was below cost because Brazilian ethanol is coming in at a 10-percent tariff. So we started losing money, we’re losing P15 million a month,” he said.

Zabaleta said efforts by the government to resolve such tariff issue have been very discouraging.

He said they want the government to slap a higher tariff on imported ethanol.

“I think you need a 30-percent tariff. Most of the tariff will not go to us. All of the tariff will go to government. So it’s a very big financial booster for the government,” he said.

Zabaleta has also criticized the Department of Energy (DOE) for failing to resolve the issue.

“The DOE has a lot of targets for three years now. None of the targets have been met, none. Maganda lang yan sa mga speeches, sa reality, palpak,” he said.

SCBI currently operates an ethanol distillery and power cogeneration plant located in Negros Occidental with a capacity to produce 30 million liters of ethanol annually and approximately eight megawatts of power.

SCBI’s facility and a plant with a nine- million liter capacity owned by Leyte Agri Corp. are currently the only ethanol processing plants in the country.

Under the Biofuels Act of 2006, all gasoline sold in the country have to be blended with five percent of indigenously sourced ethanol. This year, the mandate translates into 220 million liters of ethanol.

Zabaleta earlier said SCBI is looking at three potential sites across the country for ethanol plants.