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The Philippines Biofuels Activities

Outline map of The Philippines.

Here you'll find information about The Philippines' work in biofuels. Learn more about its:

Background

The Philippines embraced the development of biofuels a few years ago with hopes of achieving future energy security, augmenting farmers' income, and generating rural employment. The member economy also hopes to position itself as a leading biofuels producer in the region. The main challenge facing the industry is the availability of feedstock and the processing facilities to meet the demand of the government's National Biofuels Program.

Production

Biofuels production in the Philippines is currently limited to just biodiesel. The member economy had seven biodiesel production plants as of August 2007, with a total output of 257 million liters a year. This production capacity exceeds the requirement of the mandatory volumes set by the Biofuels Act, thus the biodiesel producers see it as an excellent export opportunity.

Production of fuel ethanol will commence in late 2008, in time for its mandated use in 2009. Several ethanol plants are under construction, but their scheduled completion, inclusive of their corresponding feedstock supply-base, is uncertain (USDA 2007).

Feedstock

Primary feedstock for biodiesel production in the Philippines is coconut oil. The Philippines is one of the largest producers of coconut oil in the world - approximately 1,400 million liters per year. Nearly 20% (400 million liters) of this production is used for domestic consumption, and the balance of 80% is exported. Mindanao accounts for almost 60% of the economy's total coconut oil production (Embassy of the Republic of the Philippines 2007). Potential biodiesel feedstocks in the Philippines are jatropha and palm oil. The government has announced its plan to launch massive propagation and cultivation of jatropha seeds covering around 2 million hectares (ha) of unproductive and idle public and private lands nationwide. This effort will produce about 5,600 million liters of biofuel in the next 10 to 12 years (Bulatlat 2007). There are few pilot plantations growing oil palm.

In the Philippines, sugarcane is considered a primary source for ethanol production. The government sees it as the most reliable feedstock due to its well-established farming technologies and the highest yield per hectare compared to other feedstock (corn, cassava, and sweet sorghum). Sugarcane production in the Philippines is expected to increase to meet the requirements of the Biofuels Act. At present, the sugar industry can only supply 79% of the needs of the 5% ethanol blend, which is between 200 and 400 million litres per year. The Philippines, therefore, needs to expand its current 167,300 sugarcane farms covering a total area of 344,700 hectares to meet the ethanol demand. The Sugar Regulatory Administration (SRA) already identified 237,748 hectares of new sugar fields, mostly in Mindanao, that can be tapped to produce fuel ethanol (Bulatlat 2007). Additional ethanol feedstocks considered by the government are sweet sorghum and cassava.

Economics

Not available.

Biofuels in Use

B1 (1% biodiesel and 99% petroleum diesel) and E10 (10% ethanol and 90% gasoline) are available nationwide.

Infrastructure and Vehicles

B1 is available through all service stations in the Philippines, and it has been successfully used by thousands of vehicles in the Philippines since 2002. E10 is currently offered by all Seaoil stations nationwide. It is expected that in 2008 more gas stations will be offering E10 (Biofuels Philippines 2007).

In 2007, Ford Philippines opened a plant that manufactures flexible fuel engines in Santa Rosa, Laguna. These engines are designed to run on a mix of up to 20% ethanol. Production output of the Ford facility reportedly is estimated at 105,000 FFV engines in the next five years, with some units intended for export to South Africa and other Association of Southeast Asian Nations (ASEAN) countries. The Ford plant's opening is expected to enhance and accelerate the adoption of biofuels in the economy (USDA 2007).

Trade

Chemrez Inc. has exported 500,000 liters of coconut-based biodiesel to Germany and to Asian markets including China, Chinese Taipei, South Korea, and Malaysia. If the mandated biodiesel blend increases to 2% in the next two years, as specified in the Biofuels Act, biodiesel companies in the Philippines may concentrate on supplying the domestic market and export only excess volumes.

Policy

The Philippine Biofuels Act, implemented in January 2007, establishes the following requirements for ethanol and biodiesel:

  • 5.1 Within two years from the affectivity of this Act, at least five percent (5%) bioethanol shall comprise the annual total volume of gasoline fuel actually sold and distributed by each and every oil company in the member economy, subject to the requirement that all bioethanol blended gasoline shall contain a minimum of five percent (5%) bioethanol fuel by volume.

  • 5.2 Within four years from the effectivity of this Act, the National Biofuels Board (NBB) created under this Act is empowered to determine the feasibility and thereafter recommend to the Department of Energy (DOE) to mandate a minimum of ten percent (10%) blend of bioethanol by volume into all gasoline fuel distributed and sold by each and every oil company in the member economy. In the event of supply shortage of locally-produced bioethanol during the four-year period, oil companies shall be allowed to import bioethanol but only to the extent of the shortage as may be determined by the NBB.

  • 5.3 Within three months from the effectivity of this Act, a minimum of one percent (1%) biodiesel by volume shall be blended into all diesel engine fuels sold in the member economy; provided that the biodiesel blend conforms to the Philippine National Standards (PNS) for biodiesel. Within two years from the effectivity of this Act, the NBB created under this Act is empowered to determine the feasibility and thereafter recommend to DOE to mandate a minimum of two percent (2%) blend of biodiesel by volume which may be increased taking into account considerations including but not limited to domestic supply and availability of locally-sourced biodiesel component (Republic Act No. 9367).

Among the incentives designed to encourage the production and use of biofuels are an exemption of the ethanol/biodiesel portions of fuel blends and an exemption from value-added taxes for raw materials (coconut, sugarcane, jatropha, cassava, etc.). There are also favorable loan policies available from banks for biofuel investors and producers.

Some of the following documents are available as Adobe Acrobat PDFs. Download Adobe Reader.

Sources

  1. Biofuels Philippines, January 2007
  2. Embassy of the Republic of the Philippines, Berlin, Germany, January 2007
  3. Bulatlat, The Philippines alternative weekly magazine, Vol. VII, No. 3, February 2007
  4. N. A. Orcullo Jr., De La Salle University-Dasmariñas, "Biofuels Initiatives in the Philippines," October 2007 (PDF 614 KB)
  5. U.S. Department of Agriculture, GAIN Report, 2007 (PDF 45 KB)
  6. Republic Act No. 9367, the Biofuels Act of 2006 (PDF 438 KB)