Catherine Talavera (The Philippine
Star) - August 28, 2018 - 12:00am
MANILA, Philippines — The relaxation
or suspension of the Biofuels Act of 2006 in a bid to lower fuel prices will
imperil the country’s P30-billion bioethanol industry and drive away foreign
investors, an industry group said.
“If we are going to suspend this and
if we are going to change the rules in the middle of the game, then we are
scaring the foreign investors away, we are sending a negative, wrong signal to
these companies,” Center for Alcohol Development and Research president Gerardo
Tee said.
He said bioethanol investors spend
about P3 billion to P5 billion for a distillery with capacity of 100,000 liters
per day, depending on the technology used.
Under Republic Act 9637 or the
Biofuels Act of 2006, local oil companies are required to buy biofuels from
local manufacturers and mandates a 10 percent bioethanol blend in gasoline.
“The Biofuels Law is not about
lowering the prices of gasoline. It is about the diversification of the sugar
industry which empowers the marginalized farmers, sugarcane farmers, it is
about rural development. It is about putting the people, making the people go
to agriculture, developing our farms, providing livelihood in rural areas
rather than them moving away to Metro Manila,” Tee said.
The Independent Philippines
Petroleum Companies Association (IPPCA) earlier 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.
“With the relaxation of the
prescribed biofuels blend, motorists could expect a P2 per liter and P0.30 per
liter reduction in the pump price of gasoline and diesel, respectively,” IPPCA
earlier said.
The IPPCA added that suspending the
prescribed biofuel blend on fuel products would be more effective in bringing
down local fuel prices, instead of reintroducing Euro 2 diesel that might not
be feasible due to logistical concerns and minimal price reductions.
The Department of Energy (DOE)
directed the 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.
However, Tee said that the Biofuels
Law passed the scrutiny of the Senate and Congress and only they can amend the
law.
He said the bioethanol industry is
still at its “infancy stage” as the first bioethanol plant was put up only in
2013 and thus still needs 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,” Tee 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,” Tee added.
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, that’s wrong. There are instances that 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.
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