PH to hold off increase in biodiesel mix
The government will postpone the required increase in biodiesel blend this year and next amid the high cost of coconut oil.
In a press briefing on Friday, outgoing Energy Secretary Raphael Lotilla said the National Biofuels Board’s (NBB) recommendation has been approved in principle and was just awaiting the signature of members.
The NBB is tasked with monitoring the implementation of the biofuels program. It is headed by the Department of Energy and counts as members the departments of trade and industry, science and technology, among others.
“It’s [resolution] already being circulated for signature,” Lotilla said. “Since this has already undergone consultations among the members of the board, this is practically already ended.”
Energy Undersecretary Alessandro Sales said the resolution sought to suspend increasing to 4 percent from the current 3 percent the coco-methyl ester (CME) component that should be mixed into diesel. The Biofuels Act of 2006 mandates blending regular fuels for motors and engines with locally produced biofuels to promote the country’s produce and address pollution and other environmental concerns.
The CME blend in diesel was raised to 3 percent from 2 percent previously on Oct. 1, 2024. The CME component was supposed to be scheduled to increase to 4 percent by Oct. 1 this year and to 5 percent by Oct. 1, 2026.
“This was decided because of the prevailing high cost of coconut oil which is the principal feedstock for our coco methyl ester, the biodiesel component in the diesel being sold in the Philippines,” Sales noted.
He said prevailing coconut prices in the global market have “subsided a bit, just below” $3,000 per metric ton (MT), a surge of more than 172 percent from about $1,100 per MT at the beginning of 2024.
“But still, it is a significant increase and the increase actually translates to higher cost of diesel at the pump (level) because of the mandate. And increasing the mandate now to B4 [4-percent level] would add to this price pressure,” he told reporters.
Meeting the requirements
Chemrez Technologies Inc. president Dean Lao Jr. expressed the industry’s willingness to meet the requirements for the increased CME blend in the future.
He said, however, they would need to prepare months in advance to ensure ample supply.
“The industry awaits a more definite date for the resumption of the B4 mandate from the NBB. It needs at least five months in advance to prepare for implementation,” Lao said.
“The progression toward B5 (5-percent blend) remains a sound and sustainable solution for the Philippines to attain its economic, environmental and health goals,” he added.
Sales said the board would have to study whether or not to resume implementation of the required blend, which would depend on the availability of the feedstock.
“[There] will be a periodic review and that the intent to increase the blend is still there,” he added.
