DOE suspends biodiesel blend hikes
The Department of Energy (DOE) has postponed the planned increase in biodiesel blends amid the expected “significant impact” on the prices of petroleum products.
In an advisory dated July 17, the agency informed all downstream oil industry players, biodiesel producers and stakeholders on the deferment of the implementation of the 4 percent and the 5 percent biodiesel blend.
These hikes in the biodiesel mix were originally scheduled for October of this year and 2026.
This came as the National Biofuels Board (NBB) suggested delaying the implementation due to the rising costs of coconut oil, which is the main feedstock for coco methyl ester (CME) that is then blended with diesel to make it more environment-friendly.
Energy undersecretary Alessandro Sales pointed out last month, however, that the price of coconut oil in the global market had increased significantly. Coconut oil was initially trading at about $1,100 a metric ton.
However, the figure had already jumped to $3,000 per metric ton thus the decision to hold back on any increase in the biodiesel blends.
“This decision was made in view of the anticipated significant impact on pump prices and the potential inflationary effects on the national economy,” said the advisory, signed by Energy Secretary Sharon Garin.
“The NBB shall regularly assess and recommend appropriate market interventions to help stabilize the price of biodiesel and its feedstock,” it added.
The DOE said it would give the go-ahead to implement the blend hikes “upon the recommendation of the NBB.”
Last October 2024, the DOE directed oil companies to increase the biodiesel blend to 3 percent. The government earlier said this would benefit coconut farmers, biodiesel producers and other players in the sector as more than 900 million additional coconut nuts would be needed to produce the CME requirements.
In September, the DOE also floated the possibility of increasing the biodiesel blend for fuel used in diesel facilities.
