Bioethanol producers urge gov’t to go local

MANILA, Philippines — The alcohol industry group is urging government to favor local production of bioethanol by letting producers import molasses rather than the finished products to meet the country’s ethanol demand, particularly for fuel blending.

The Center for Alcohol Research and Development (CARD), the umbrella organization of distillers and bioethanol producers in the country, is asking the government for continued support to help grow the P30-billion bioethanol industry.

CARD chairman and Absolut Distillers Inc. chief operating officer Gerardo Tee urged government to be cognizant of the industry’s issues in raw materials and to implement stable policies under the Biofuels Law to ensure the future growth of the industry.

“We have our own challenges with regard to raw material security and we want the government to give us the chance to flourish because without this support, we won’t be here in the next years to come,” Tee said.

To help boost the local bioethanol production, CARD is asking government to let producers import molasses—a raw material used in producing ethanol—to meet the 500 million-liter bioethanol demand target instead of importing the finished product itself.

CARD director and Roxas Holdings Inc. senior vice president George Cheung said letting local producers import molasses instead of the finished product improves the capacity utilization of the local industry while creating additional employment in the country.

“The limitation is more on the feedstock rather on capacity. We have more than enough capacity. It’s an evolution of the law. The law does not allow us to import the feedstock, so that’s the main bottleneck of growth, there is not enough feedstock,” he said.

“Right now, we have about 300 million of capacity yet the feedstock of molasses, we only have enough in the country for 250 million for feedstock and yet we need to go up to 500 million in capacity, we don’t have the feedstock to reach 500 million,” Cheung said.

Importing molasses will also help stabilize ethanol prices as it will help the industry monetize its unused capacity, the CARD director said.

The industry needs to import around 700,000 metric tons on a phased-importation basis. Major molasses producers are Thailand, India, Pakistan and Indonesia.

Moreover, Cheung said importation of finished products is only a short-term band-aid solution, which benefits other countries more than the Philippines.

However, the local ethanol producers can only import molasses when the Sugar Regulatory Administration says so, Tee said.

Currently, importation of the raw material is only allowed for potable use, like alcoholic drinks and beer production.

But the industry is only pushing for a temporary importation of molasses until the agricultural production can improve and catch up with demand.

“The more efficient the farms will be, the more molasses we will have and the more sugarcane,” Tee said.

CARD vice chairman Ferdinand Massi said importation would only come once local molasses supply is exhausted to protect the farmers.

Members of CARD include ProGreen, Balayan Distillery, Roxas Holdings, Absolut Distillers, and Victorias Milling, among others.