ADI seeks dialog with DOE on bad impact of suspending Biofuels Act

By Lenie Lectura - August 27, 2018

https://businessmirror.com.ph/adi-seeks-dialog-with-doe-on-bad-impact-of-suspending-biofuels-act/

ABSOLUT Distillers Inc. (ADI) seeks to dialogue with the Department of Energy (DOE) to discuss the potential impact of suspending the Biofuels Act, which it said would imperil the country’s P30-billion bioethanol industry and drive away foreign investors.

“If we are going to suspend the Biofuels Act and if we are going to change the rules in the middle of the game, then we are scaring foreign investors away. We are sending a negative, wrong signal to these companies,”ADI COO Gerardo Tee said.

Tee said bioethanol investors spend about P3 billion to P5 billion for a distillery with a capacity of 100,000 liters per day, depending on the technology used.

“The Biofuels law is not about lowering the prices of gasoline. It is about the diversification of the sugar industry which empowers the marginalized sugarcane farmers. It is about rural development. It is about encouraging people to go to agriculture, developing our farms, providing livelihood in rural areas rather than their moving away to Metro Manila,” he said.

The DOE directed oil companies to roll out the lower-priced Euro 2 diesel fuel in their retail stations to help mitigate the impact of rising inflation to consumers.

The Independent Philippines Petroleum Companies Association, however, asked the DOE to suspend the Biofuels law instead of implementing the Euro 2 directive as it will entail additional investments for the storage tanks and other infrastructure.

“We know the DOE will hear both sides of the story. We will stress our point. We are not the problem. We’re trying to be the solution,” Tee said.

Tee said the Biofuels law, which mandates a 10-percent bioethanol blend in gasoline, passed the scrutiny of the Senate and Congress and only they can amend it.

Tee said the bioethanol industry is also still on its “infancy stage” as the first bioethanol plant was put up only in 2013 and thus, still needing strong support from the government.

“We are the solution; we are not the problem. We are trying to promote renewable energy; we are trying to plant our own fuel and we are in its infancy,” he said.

“You have to nurture the industry and let it grow. There has to be a time for our biofuels to develop because it is the future of the country,” he said.

Tee also addressed concerns that imported bioethanol is cheaper than locally produced bioethanol.

He explained that, bioethanol in the US is cheaper by P26 per liter because the US government subsidizes its corn farmers compared to the lack of subsidy and the investments made by the local bioethanol producers.

“It is not true that we are increasing the prices of gasoline.  There are instances when we even help bring down the price of gasoline depending on the price of ethanol. Bioethanol is not indexed to petroleum. Bioethanol is about supporting our farmers, rural development and cleaner environment,” Tee said.

Tee said bioethanol provides energy security as gasoline is a finite resource whose prices will likely go up when demand goes up and supply remains constant.

“Bioethanol would free us from bondage from our addiction to imported oil. Gasoline is a finite resource; sooner or later, it will be used up. The prices are now just temporary. Once demand stays like this and supply starts diminishing that’s the end of oil and the prices will go up. We are doing it now so that when that scenario happens, we are already quite independent. We don’t need much oil anymore,” he said.

Domestic ethanol producers currently produce about 300 million liters per annum, equivalent to 60 percent of the 500 million liters per year demand.

The remaining 200 million liters of bioethanol, equivalent to 40 percent of demand, is imported by the oil companies.