Biofuels Board okays hike in biodiesel blend

MANILA, Philippines - The National Biofuels Board (NBB) has approved the increase in the mandated biodiesel blend to five percent from two percent, Agriculture Secretary Proceso Alcala said yesterday.

Alcala is confident that the local coconut industry would be able to supply the coconut oil requirement for the production of coco methyl ester which would be used for blending.  

“The Biofuels Board has approved the increase in the mandated blend. The testing process will be finalized and a public hearing will be held for this,” said Alcala in a chance interview.

“This results to billions of pesos in savings for the government because of import substitution,” he added.

The NBB is chaired by the Secretary of the Department of Energy and is composed of the heads of the Department of Trade and Industry, Department of Science and Technology, Department of Agriculture, Department of Finance, Department of Labor and Employment, PCA, and Sugar Regulatory Administration.

Increasing the mandated biodiesel blend may entail a slight increase in fuel prices.

“Prices will be market driven. If coconut prices are high, biodiesel prices will also be high,” he said.

Alcala said, however, that increasing the biofuel component would reduce air pollutants and strengthen the domestic coconut industry which thrive mainly on coconut oil exports to the United States and Europe.

The DA head noted that coconut oil exports are often placed at the mercy of fluctuating prices in the world market.

Coconut oil refiners earlier said that raising the mandated biodiesel blend to five percent would raise the domestic consumption of coconut oil for fuel to 350,000 metric tons (MT) from the current demand of 140,000 MT.

Alcala said coconut oil exporters may soon decrease their export volumes and sell their product to local producers of coco methyl ester.

He said exporters could enjoy a “premium” price for coconut oil if they sell their products locally.

“This will also result to more jobs and more revenues for the government because of taxes on products,” said Alcala.

The Department of Agriculture (DA) wants to promote value-adding in the local coconut industry through the diversification of products.

The coconut industry stands to receive additional assistance after the Supreme Court returned to the state P70 billion from the disputed coco levy fund.

Alcala maintains that the funds would not be distributed in cash but would be used for the provision of farm inputs to coconut farmers.

The DA favors putting the funds in safe investment instruments so that the interest could be used for projects that could have an immediate impact on the industry.

“My stand on the matter remains the same. The funds should be put in a perpetual fund and would be used for the benefit of coconut farmers, big and small,” said Alcala.

The department is currently studying the establishment of coconut processing estates in key coconut-producing regions that would produce products ranging from food, personal care products to fuel.

While the construction of such estates are still being studied, the government is carrying out- a fertilization program in several coconut-producing provinces to increase the number of coconut trees.

Plantations in Batangas, Laguna, Cavite and Quezon meanwhile, continue to  grapple with scale insect infestation although the Philippine Coconut Authority has given assurance that the infestation would not affect the total production.