E-10 on April Fool’s Day

Barring any last-minute decision by the government, the requirement on the sale and use of at least ten percent ethanol blend on gasoline products takes effect on April 1. Ironically, it falls on April Fool’s Day — a Monday — the first working day after Holy Week.

That is, if the Department of Energy (DOE) issues the implementing circular guidelines on the mandated use of ten percent ethanol, or E-10 for short, on all gasoline products sold and used in cars and vehicles.

Currently, regular gasoline is sold with five percent ethanol blend while some gasoline grades are exempted from ethanol blending. However, with the looming government mandate, all motorists and gasoline users have no choice but to use E-10 once the DOE issues the necessary circular.

This is in compliance with the mandate of Republic Act 9367, otherwise known as the Bio-Fuels Act. In 2006, former President Gloria Macapagal-Arroyo signed into law RA 9367 that mandated a biofuels standard in all refined oil products used in the country.

Five years ago, the government wanted the Philippines to be the top ethanol producer in Asia. Unfortunately, our country could hardly produce enough for even domestic consumption. I was told we import 85 percent of our ethanol requirements while domestic production accounts for the balance of 15 percent.

Initially, the law required a five percent ethanol blend for gasoline within two years. RA 9367 set the amount of bioethanol in gasoline would be increased to ten percent four years after the law is passed. As prescribed by RA 9367, any increase must be first determined and recommended by the National Biofuels Board (NBB).

Also, RA 9367 mandated one biodiesel blend for diesel within three months and this was increased to two percent in 2009 or within two years as prescribed by this law. RA 9367 also zero-rates the specific tax on the biofuels component of blended gasoline or diesel.

As envisioned by the “Biofuels Act of 2006,” it aims to reduce the country’s dependence on imported fuels through the development and utilization of indigenous, renewable and sustainable sources of clean energy. This is because biofuels produce lower carbon emissions and therefore cause less air pollution.

Basically, bio-fuels are made largely from edible sugarcane and starchy foods like cassava. However, this gave rise to policy debate between ensuring food security as against clean source of energy. A second generation of biofuels was developed from non-edible plant materials. And lately, third generation biofuels were developed from algae and other microbes.

Since President Benigno “Noy” Aquino III took over the reins of government in June 2010, we have not heard any clear policy directions on domestic ethanol production. Does it have something to do with the presidential family’s Cojuangco-owned 6,453-hectare Hacienda Luisita sugar plantation in Tarlac? Just asking.

In a radio interview the other day, Dr. Ed Alabastro, executive director of an environmental group called Kaibigan ng Kaunlaran at Kalikasan (KKK), called the attention of the Aquino administration about the scheduled mandatory sale and use of E-10 effective April 1.

Alabastro, who was introduced as having a chemical engineering doctorate degree, cautioned the government on the dire consequence of using E-10 with the proven effect of ethanol blend on gasoline products to slow down motor vehicles. Alabastro asked the government, specifically the NBB to show studies to prove E-10 compatibility in vehicles under Philippine driving conditions.

“Carbureted engines and older vehicles, which constitute a large portion of vehicles on the road in the Philippines, are not compatible with E-10 and may damage the vehicles’ fuel lines, fuel pumps, and carburetors,” Alabastro explained. These engines are also found in motorcycles, and equipment used by farmers and fisherfolk, he added.

 â€œAmid high oil prices, why are they forcing a higher ethanol blend when it means that motorists now have to pay more to travel less,” Alabastro argued. Since the passage of the Biofuels law six years ago, he further complained, the NBB has not shown comprehensive and scientific studies on the effects of ethanol use in vehicles, nor have they conducted “extensive” public consultations.

Had Alabastro not raised this concern, the public would not have been alerted about this looming burden again that could be passed on to us consumers in terms of higher gasoline prices.

I checked Alabastro’s claims yesterday with Raissa Bautista, public affairs manager of Chevron Philippines, one of the so-called “Big 3” oil players in our country. The two others are Petron Philippines and Pilipinas Shell.

Since the use of E-10 is mandated by law, Bautista said, all oil players like Chevron have to comply with it even as this might mean add-on to the prices of their gasoline products. However, Bautista reassured the public that imported ethanol currently is much cheaper per liter than refined oil products they buy abroad. Chevron has no refinery here and they account only for 15 percent of the local market. 

Other than the mandated use of E-10 blend, Bautista said, they are also awaiting the DOE Circular on the new Philippine National Standards (PNS) to set the minimum Research Octane Number (RON) to 91. Like the Biofuels Act, she cited, this is also in compliance with another law, the Clean Air Act.

She advised the motoring public to check the manuals of their cars and vehicles on the recommended RON. She noted that 90 percent of motor vehicles in the Philippines have 91 RON. She advised motorists to buy gasoline with 91 RON, as indicated in their vehicle manual, so they won’t pay for higher priced gasoline with higher RON that their vehicles do not need. Vehicles with bigger combustion chambers require higher RON than 91.

Chevron, she said, and the rest of oil players are just awaiting the go-signal from DOE for these environment-friendly fuel laws to take effect.

But it will be neither joke nor prank if motorists would be caught off guard when this mandatory use of E-10 comes into effect on April Fool’s Day, especially if accompanied by another round of oil price increases.