Biofuels Act a step in the right  direction – consultancy firm

The continued implementation of the country’s biofuels program under the Biofuels Act of 2006 is a “bold, positive step towards the right direction”, consultancy firm Merritt Partners Inc. said.

Merritt, chaired by former Energy Secretary Vincent S. Perez, noted, in its latest report that  in the Philippines, biofuel substitute for diesel is primarily sourced from coconut while that for gasoline is expected to be derived  mainly from sugarcane.

It pointed out that the country is currently among the top producers and exporters of sugarcane and coconut, respectively, in the world.

The country’s staple food, rice, on the other hand has registered an increase in production between 2002 to 2007 from 12.39 million tons to 16.24 million tons; and land area from 4.04 million hectares to 4.27 million hectares, Merritt  said, citing records from the Bureau of Agricultural Statistics.

“These figures have led us to conclude that the implementation of the biofuels program had not affected the country’s food production,” it said.

Merritt said rising food prices can be attributed to speculative trading, increase in demand from growing economies, changes in weather patterns and incessant increases in fuel costs.

It noted that as an archipelago, the price of commodities in the country is susceptible to fuel spikes as economic production areas are scattered in a number of islands.

In the same study, Merritt pointed out that the unabated rise of oil prices does not bode well for an oil-importing country like the Philippines.

“It is clear that the country needs to develop and utilize indigenous fuel sources to support and sustain its growth and counteract the consequences of high oil prices,” it added.

The Asian Institute of Petroleum Studies Inc. and the US National Biofuels Board earlier said biofuels have limited impact on food supply and pricing, specially in the Philippines.

The two institutions refuted UK research firm Gallagher Review’s claim on biofuels, which raised concerns that biofuels may raise food prices.

“While the Gallagher Review is specific to the United Kingdom’s own renewable fuels policies, it is fair to note that the research done by US experts and the US Agriculture Department has proven that biofuels-related feedstock demand has limited impact on global food supply and pricing,” NBB CEO Joe Jobe said.

He said with gas prices soaring to more than $4 a gallon, the addition of biofuels to the US fuel supply is one of the only things keeping prices from going higher.

AIPSI managing director Raffy Diaz added that “to pass on nearly the whole problem of food supply and price as being the result of biofuel  is outright ridiculous.”

Diaz said the impact of biofuel feedstock eating up on food supply is very much below 10 percent on global basis, mainly pertaining to corn for ethanol and soybean for biodiesel.