Ethanol producers push for mandatory bioethanol blend in gasoline

MANILA, Philippines — Ethanol producers are urging the government to make higher voluntary ethanol blends mandatory to reduce the reliance on imported fossil fuel as well as boost the local bioethanol industry.

In a recent report, the United States Department of Agriculture (USDA) said the Philippine government is studying higher ethanol blends in gasoline on a voluntary basis up to 20 percent.

This is in line with the recent stated concern by the Bangko Sentral ng Pilipinas (BSP) that the country is overly reliant on refined petroleum product imports, and a Senate committee on energy meeting on June 21 last year wherein the Department of Energy (DOE) was advised to consider such higher blends.

While being pushed on a voluntary basis, the USDA said the consideration for higher ethanol blends gives local ethanol producers the needed push to expand their capacities.

However, the Ethanol Producers Association of the Philippines (EPAP) said the higher ethanol blends on a voluntary basis is not in line with the mandate under the Biofuels Act of 2006.

In a phone interview, EPAP chairman Gerardo Tee said the law has mandated increasing bioethanol blends.

“It’s already in the law. If it will only be voluntary, then higher blending will never move,” he said.

Tee said the National Biofuels Board (NBB) should decide on a mandatory increase in blending.

The NBB, the body tasked to study and implement the Biofuels Act of 2006, is composed of the Departments of Energy, Finance, Agriculture and Labor and Employment as well as the Philippine Coconut Authority (PCA).

The Biofuels Act of 2006 mandates that all liquid fuels for motors and engines sold in the Philippines shall be blended with biofuels.

The current mandated ethanol blend for gasoline has stayed at E10, or at 10 percent, since 2012.

The EPAP has been pushing to raise the blend from 10 percent to 15 or 20 percent to further pull down gasoline prices and generate more savings from avoided greenhouse gas (GHG) emissions.

Tee said the country stands to benefit from mandating the increase in bioethanol blend, even at five percent, since there would be less importation of fossil fuel, and a continued reduction in carbon footprint.

“It’s a win-win situation. We will be importing less fossil fuel, lowering our carbon footprint, helping our farmers, advance our manufacturing industry and lower gasoline prices,” he said.

Under the Philippine Development Plan 2023-2028, the DA and DOE are mandated to map suitable areas for feedstock production for the biofuels industry.

Currently, there is a shortage in feedstock. Based on the roadmap, both agencies will pursue seedling development for high-yield coconuts and other energy crops to increase feedstock.

But until local ethanol production scales up, the USDA said the country would be forced to continue importing “refined petroleum products to compete with imported ethanol on price for 10 percent of the total blended gasoline pool and have the effect of both immediately lowering pump prices, as well as providing a safeguard against future oil price and supply shocks.”

However, EPAP is pushing to allow the importation of molasses, the raw material used in producing bioethanol.

Molasses is the primary raw material, which is sourced from sugar operations that produce it as a by-product in the production of alcohol and ethanol.

“We are asking President Marcos to allow the bioethanol industry to import molasses during the non-milling season,” Tee said, noting that there is a shortage of 500,000 metric tons in raw materials.

He said this would allow the local ethanol industry to flourish, help add manufacturing value in the country and keep people employed.

Last year, blended gasoline supply was estimated to have reached nearly 6.8 billion liters, growing by an average of six percent a year over the last decade.

The country’s gasoline production, which represents 20 percent of the blended gasoline supply, is represented by sole local refiner Petron Corp., which also holds 20 percent market share of all petroleum products sold.

The bulk of the total blended gasoline supply is imported refined petroleum products.

China was the largest supplier in 2021, but the Philippines sought alternative suppliers, including South Korea and Singapore last year given China’s decision to tighten export restrictions.