DOE seeks review of biofuels program

MANILA, Philippines - The Department of Energy (DOE) wants to review the country’s National Biofuels Program after the government’s plan failed to take off.

“We will revisit the National Biofuels Program and then update it. And hopefully provide a more realistic target in the next five years,” Energy Undersecretary Jose M. Layug Jr. said.

Layug said that five years ago, the government targeted the Philippines to be the top ethanol producer in Asia “but we hardly produced.”

To date, only San Carlos Bioenergy Inc., Roxol Bioenergy and Leyte Agri Corp. are producing ethanol with a combined capacity of around 80 million liters per year.

Republic Act 9367, or the Biofuels Law of 2006, required all gasoline sold in the country to have a five percent blend of ethanol last year. The 10-percent minimum blend requirement will be fully implemented this year.

Local ethanol output supplies only around 15 percent of the total demand prompting oil firms to import from Brazil and other countries, data from the Independent Philippine Petroleum Companies Association (IPPCA) show.

Layug said the review will also be conducted in line with a recent circular of the DOE.

In December, the DOE required oil firms through Department Circular 2011-12 to first secure locally produced ethanol for their gasoline blending needs before importing.

The DOE move is part of the government’s efforts to encourage more investments in the local ethanol sector.

“We hope the local ethanol industry will be developed given the government to support through DOE circular,” Layug said.

“I do not know anything (about the review). I suppose this will be discussed [today] at the National Biofuels Board meeting,” said Ethanol Producers Association of the Philippines chairman Jose Maria T. Zabaleta in a text message.

Bioethanol, also called ethanol fuel, is a light alcohol produced by fermenting starch or sugar from corn, sugarcane, cassava or nipa used as a substitute to gasoline.

Meanwhile, Layug said the DOE will study the shift to a lower blending requirement for biodiesel.

“Whether it is feasible to move to B2 from B5, this year we will look into that. We will go around cities and conduct consultations,” Layug said.

Blending requirement for diesel is at five percent. Biodiesel, also called coco-methyl ester (CME), is produced from coconut oil.

But an industry official said the shift will not be advantageous for consumers.

“It is not advisable as it will only increase the price of diesel by P2 per liter representing the huge difference of coconut oil versus diesel,” Fernando Martinez, chairman emeritus of IPPCA, said in a text message.

“In addition, the use of two percent CME as good for the environment has never been fully validated,” Martinez said.

The use of CME is also required under the Biofuels Law.