Nearly a decade after the enactment of the Biofuels Act, the Philippines’s local bioethanol production remains inadequate to meet domestic demand.
In a study titled “The State of the Biofuels Market: Regulatory, Trade and Development Perspectives,” the United Nations Conference on Trade and Development (Unctad) said the country will continue to import to meet local bioethanol requirements.
“The Philippines will continue to ramp up production, but the country will remain dependent on imports to feed its bioethanol mandate,” the Unctad said in its report released on Tuesday.
The Unctad said the Philippines’s bioethanol production in 2012 accounted for 85 million liters. That volume represents only 30 per cent of local demand, pressuring the Philippines to import from Thailand to address the gap.
But given a shift in Thailand’s bioethanol production to focus on its local market, the Philippines may need to import elsewhere, the Unctad said. The Unctad added the two likely sources of bioethanol for the Philippines moving forward are the United States and Brazil.
“Regarding bioethanol, the compliance with the current mandate continues to not be met due to the inadequate capacity and competitiveness of existing bioethanol production,” the Unctad said.
The Biofuels Act of 2006 created a market for bioethanol because of the mandate for oil companies to blend 5-percent bioethanol by volume in 2009. The Act also provided that the blending of bioethanol should increase to at least 10 percent in 2011 on all gasoline fuel products distributed and sold in the Philippines.
However, the government said that existing bioethanol plants still cannot fully supply the requirements for the 5-percent blend mandated by the law; thus, oil companies resort to importation of bioethanol to meet the requirement.
The government said bioethanol is currently produced in the country through sugar fermentation and distillation process.
Production of bioethanol in the country started when Leyte Agri Corp and San Carlos Bioenergy Inc started operations in 2008.
