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Oil companies have said they must increase the biodiesel mix by October



Oil companies have said they must increase the biodiesel mix by October

By means of Heroes Joy Talavera News reporter

THE DEPARTMENT of Energy (DoE) ordered oil companies to increase the coconut-biodiesel blend from October, in a bid to help reduce pump prices and support the local industry.

In a circular, the DoE said all diesel fuel sold in the country must contain a 3% biodiesel blend from October 1, up from 2% now.

Oil companies must increase the coconut biodiesel blend to 4% by October 1, 2025, and to 5% by October 1, 2026.

The Biofuels Act of 2006 requires all liquid fuels for engines and engines to contain locally produced biofuel components.

Since February 2009, oil companies have been required to apply a 2% biodiesel blend by volume in all diesel fuel sold and distributed in the country.

“Following the drastic increase in fuel costs in recent years due to the conflict between Ukraine and Russia, production cuts by the Organization of the Petroleum Exporting Countries (OPEC) Plus and global inflation, the National Biofuels Board (NBB) has determined that an increase of the bio-ethanol blend will reduce the pump price of diesel and petrol fuel and help ease the burden of rising prices on consumers,” the circular said.

The increase in the coconut methyl ester (CME) blend from 2% to 5% was to have been implemented in 2020, but was postponed due to the coronavirus pandemic. At the time, there was insufficient certainty about the adequacy of the biodiesel supply and there were logistical limitations.

According to the circular, the DoE says oil companies can also voluntarily offer gasoline containing a 20% bioethanol blend. Currently, the DoE has mandated a 10% bioethanol blend by volume in all petrol sold locally.

In a statement, the DoE said increasing the bioethanol blend to 20% could result in a P3.21 per liter reduction in gasoline pump prices.

“Implementing a higher biofuel blend is a win-win solution as we promote economic growth, uphold environmental stewardship and strive for cleaner energy consumption. It is also about investing in a future where sustainability drives progress,” said Energy Minister Raphael PM Lotilla.

The DoE said in the circular that the downstream oil industry must implement measures to ensure that all requirements for the transition to the higher biofuel blend are in place before the deadline.

Oil companies must ensure there is enoughFicient storage capacity, blending facilities and transport systems to meet the expected increase in the supply of biofuels.

Fuel retailers implementing the 20% bioethanol blend will also be instructed to supply a special storage tank and dosing pump. Vehicle owners must be informed before dispensing gasoline.

Meanwhile, biofuel producers must ensure there are sufficient raw materials and production to meet the demand for a higher biofuel blend.

“The proposed increase in the ethanol blend in gasoline and the CME blend in diesel is part of the country’s efforts to reduce dependence on imported fossil fuels, reduce greenhouse gas emissions and boost local bioethanol and biodiesel industries to support,” Rodela I. Romero, assistant director of the DoE Oil Industry Management Bureau, said in a Viber message.

She said the new policy is part of the government eFforts to comply with environmental regulations, promote the use of ‘cleaner fuels’ and support local industries.

However, Terry L. Ridon, a public investment analyst and chairman of the think tank InfraWatch PH, said the new policy “should have included a suspension mechanism in the event of unreasonable increases in global biodiesel and bioethanol prices.”

He said allowing a price increase would undermine the government’s goal of mandating biofuels to ensure lower pump prices.

“[The] The government should focus on utilizing local biofuel supplies instead of relying heavily on imports for our blending requirements,” he said in a Viber message.

Dean A. Lao, Jr., president of Chemrez Technologies, Inc., said the higher biodiesel blend is “long overdue and desperately needed” by the agriculture industry.

“There is so much local value addition to coconut oil and even more CO2 (carbon dioxide) displacement for the country. I am happy that the biodiesel industry can bring such inclusive benefits to the Philippines,” he said.

Chemrez, a subsidiary of publicly traded D&L Industries, Inc., operates the nation’s first biodiesel plant, according to its website.

The United States Department of Agriculture (USDA) expects biofuel consumption to recover in 2024, as fuel ethanol demand will grow 8% to 682 million gallons, while biodiesel demand is expected to rise 0.8% to 240 million liters..

“The primary driver of this growth will be increases in fuel supplies, with the potential for greater growth if higher blending standards are fully adopted,” the USDA said in its report.