Biodiesel group seeks staggered hike in fuel blend

Louise Maureen Simeon (The Philippine Star) - July 13, 2019 - 12:00am

https://www.philstar.com/business/2019/07/13/1934181/biodiesel-group-seeks-staggered-hike-fuel-blend

MANILA, Philippines — The group pushing for the increase of coco methyl ester (CME) content in biodiesel is settling for a compromise of a staggered implementation of the hike which was last adjusted 12 years ago.

The Philippine Biodiesel Association raised a proposal to increase the percentage of biodiesel component blended in locally available diesel to five percent by 2021 from the current level of two percent.

The group, which is comprised of 11 companies, is pushing for a gradual adjustment, to three percent by end of the year, to four percent by 2020 and five percent in 2021.

Asian Institute of Petroleum Studies Inc. president Rafael Diaz debunked the claims of the Department of Energy that increasing the blend would result to a P2 per liter increase in pump prices.

“How they came about that P2 is erroneous. The increase is just P0.20 per liter. We have to work that out so it can be corrected,” Diaz said in a briefing.

“That is the hurdle we have to address. The DOE has a mindset of their own. We have to consider the B3 as compromise,” he said.

Biodiesel is a blend of diesel fuel and CME, a derivative of coconut oil. The current diesel blend in the country consists only of two percent CME and 98 percent regular diesel.

Under the Philippine Energy Plan 2012-2030, Philippine biodiesel should contain at least five percent CME by 2020.

“The Philippines was the pioneer in Southeast Asia in blending biodiesel. But, when Indonesia and Malaysia followed suit, they immediately jumped to five percent using palm-biodiesel. Indonesia is already considering increasing that level to 30 percent. Why are we getting left behind?” TPBA spokesperson Dean Lao said.

Further, advocates claimed that increasing the CME blend may not lower pump price of diesel at this time, but the fuel savings translates to measurable mileage gain, and the savings can be substantial.

“Coco biodiesel makes diesel fuel burn easily and completely, leading to more power and mileage improvement. If there is a 10 percent mileage improvement and diesel cost is at P40, you can effectively save P4 per liter,” Diaz said.

An increase in coco biodiesel blend to five percent is seen translating to 350,000 metric tons of coconut oil consumption, which is about 29 percent of yearly coconut oil production.

Locally produced biodiesel is still more expensive at P45 to P90 per liter compared with imports from Brazil priced at P32 per liter. Even imported ethanol fuel is cheaper at P16 per liter versus the domestic at P53.

The main objective of the Biofuels Act is to achieve a sustainable future by reducing importation of refined fuel such as diesel and gasoline, and increase the income of farmers, at the same time.

Agriculture stakeholders have long been calling for the increase as this will address the problem of plummeting copra prices.

Philippine biodiesel has the lowest percentage of vegetable oil blended to regular diesel among ASEAN countries.

For instance, Malaysia and Thailand mandate that the biodiesel sold in their markets should contain at least seven percent palm oil, while Indonesia is much higher at 20 percent.