Implementing Biofuels Programme in the Implementing Biofuels Programme in the PhilippinesPhilippines

Mario C. MarasiganMario C. MarasiganDirectorDirector

Energy Utilization Management BureauEnergy Utilization Management BureauDepartment of EnergyDepartment of Energy

To achieve energy independence and fuel diversification while To achieve energy independence and fuel diversification while meeting environmental challenges through the utilization of meeting environmental challenges through the utilization of

alternative fuelsalternative fuels

Coco-methyl Ester (CME)Coco-methyl Ester (CME)or or Coco-BiodieselCoco-Biodiesel

Others Others (autogas, hybrid, EV)(autogas, hybrid, EV)Natural Natural

GasGas

EthanolEthanol

Alternative Fuels ProgramAlternative Fuels Program

Jatropha Curcas Jatropha Curcas ““Tuba Tuba” or “Tubang Tuba Tuba” or “Tubang

Bakod”Bakod”

ENERGY SUPPLY AND DEMAND

FINAL ENERGY DEMAND

Oil 43%

Coal3%

Electricity13%

Bio,Solar,Wind, etc.

41%

USE OF OIL BY SECTOR

Com'l5%

Agri3%

Residential9%

Transport58%

Ind'l25%

Primary Energy Supply

imp. oil37%

L. coal3%

imp. coal8%

nat. gas6%

hydro6%

geo7%

biomass/solar and w ind, etc.

31%

L. oil2%

BlendBlendGasoline DisplacementGasoline Displacement

(million liters)(million liters)

FOREX SavingsFOREX Savings

(million US$)(million US$)

5%5% 255255 160160

10%10% 565565 354354

ScopeScope BlendBlend

Diesel Displacement Diesel Displacement (million liters)(million liters)

FOREX SavingsFOREX Savings

(million US$)(million US$)

GovernmentGovernment 1%1% 0.8820.882 0.420.42

NationwideNationwide1%1% 4040 2222

2%2% 111111 6161

POTENTIAL FUEL DISPLACEMENT

• Coco-Methyl Ester (CME) or “Coco-Biodiesel”

• Bioethanol

WHY COCO-BIODIESEL?

• Economic benefits to the coconut industry• Provide and establish long-term sustainable

alternative domestic market

• Increased income for 3.5 million coconut farmers

• Potential improvement in the income of 25 million Filipinos dependent on the coconut

industry

• Economic benefits to the country• Enhance energy independence

Indigenous renewable resource Reduction in diesel fuel importation Forex savings

COCO-BIODIESEL PROGRAM

Fact 1Fact 1: Fossil diesel is made up of non-polar compound molecules of hydrogen and carbon better known as : Fossil diesel is made up of non-polar compound molecules of hydrogen and carbon better known as

hydrocarbon. Biodiesel is made up of polar compound molecules of hydrogen and carbon, plus oxygen. It is classified hydrocarbon. Biodiesel is made up of polar compound molecules of hydrogen and carbon, plus oxygen. It is classified

as oxygenated fuel.as oxygenated fuel.

Fact 2Fact 2: Hydrocarbons have chemical energy (heat) value ranging from 18,000 BTU/lb to 22,000 BTU/lb. Coco-Biodiesel : Hydrocarbons have chemical energy (heat) value ranging from 18,000 BTU/lb to 22,000 BTU/lb. Coco-Biodiesel

has slightly lower heat value than kerosene.has slightly lower heat value than kerosene.

Fact 3Fact 3: Age of engine, poor maintenance, and imperfect fuel quality put together result in wasted energy estimated to : Age of engine, poor maintenance, and imperfect fuel quality put together result in wasted energy estimated to

range from 10% - 30% (or even more) depending on engine condition. With diesel currently costing P32.7 per liter, range from 10% - 30% (or even more) depending on engine condition. With diesel currently costing P32.7 per liter,

wasted amount is P3.27 to P9.81 per liter of fuel used.wasted amount is P3.27 to P9.81 per liter of fuel used.

FACTSFACTS ABOUTABOUT COCOCOCO-BIODIESELBIODIESEL

Fact 4Fact 4: Black and white smoke emission are incompletely burned and unburned hydrocarbon representing such : Black and white smoke emission are incompletely burned and unburned hydrocarbon representing such

wasted energy (or wasted money) and are products of poor combustion. Coco-Biodiesel promotes efficient wasted energy (or wasted money) and are products of poor combustion. Coco-Biodiesel promotes efficient

combustion to transform the wasted energy to useful energy – added mileage.combustion to transform the wasted energy to useful energy – added mileage.

Fact 5Fact 5: There is absolutely nothing a motorist can do to reduce fuel cost in Peso/liter. But there are many things : There is absolutely nothing a motorist can do to reduce fuel cost in Peso/liter. But there are many things

a motorist can do to reduce fuel cost in Peso/kilometer. a motorist can do to reduce fuel cost in Peso/kilometer.

Fact 6Fact 6: Any and all efforts to “improve” combustion “reduces” emission and “increases” mileage. These are : Any and all efforts to “improve” combustion “reduces” emission and “increases” mileage. These are

direct relationship. direct relationship.

FACTSFACTS ABOUTABOUT COCOCOCO-BIODIESELBIODIESEL

Fact 7Fact 7: Coco-Biodiesel has similar hydrocarbon structure as : Coco-Biodiesel has similar hydrocarbon structure as

diesel except that it has lower T90 temperature and its molecular diesel except that it has lower T90 temperature and its molecular

structure is less clustered. Thus, it is superior if used as diesel structure is less clustered. Thus, it is superior if used as diesel

fuel. However, it also contains features not present in fossil diesel fuel. However, it also contains features not present in fossil diesel

such as 11% oxygen, high solvency, high lubricity, and excellent such as 11% oxygen, high solvency, high lubricity, and excellent

polarity. For this reason, it also serves as as effective diesel polarity. For this reason, it also serves as as effective diesel

quality enhancer. A 1% blend is substantial enough to attain clean quality enhancer. A 1% blend is substantial enough to attain clean

burning.burning.

((Source: CME A Practical Solution to Quest for Fuel Economy and Clean Air, Rafael S. Diaz, Asian Institute of Petroleum Studies, Inc.)Source: CME A Practical Solution to Quest for Fuel Economy and Clean Air, Rafael S. Diaz, Asian Institute of Petroleum Studies, Inc.)

FACTSFACTS ABOUTABOUT COCOCOCO-BIODIESELBIODIESEL

Type of Type of OilOil

Melting Range, Melting Range, ooCC Iodine Iodine

ValueValue

Cetane Cetane NumberNumberOilOil MethylMethyl

RapeseedRapeseed 55 00 97 to 10597 to 105 5555

SunflowerSunflower -18-18 -12-12 125 to 135125 to 135 5252

SoybeanSoybean -12-12 -10-10 125 to 140125 to 140 5353

Corn Corn -5-5 -10-10 115 to 124115 to 124 5353

CoconutCoconut 20-2420-24 -9-9 8 to 108 to 10 7070

PalmPalm 30 to 3830 to 38 1414 44 to 5844 to 58 6565

LardLard 32 to 3632 to 36 1414 60 to 7060 to 70 6565

OIL & ESTERS CHARACTERISTICS

Higher Iodine Value means lower temperature to solidify.

Higher Cetane Number indicates a more efficient fuel.

• CME and Palm Kernel Esters are the only vegetable derived esters (VDE) that contain a full range of C8 to C18. The presence of lighter hydrocarbon atoms give better range of volatility than other VDEs thus better combustibility. It produces better combustibility since it volatilizes even better than diesel.

PLANT OILPLANT OIL C8C8 C10C10 C12C12 C14C14 C16C16 C18C18 C20C20 C22C22

COCONUT COCONUT 77 77 4949 1717 99 1111 00 00

PALM KERNEL PALM KERNEL 33 55 4949 1717 88 1818 00 00

PALMPALM 00 00 00 44 4040 5858 00 00

CORNCORN 00 00 00 11 1010 8989 00 00

SUNFLOWERSUNFLOWER 00 00 00 00 66 9494 00 00

SOYBEANSOYBEAN 00 00 00 00 1010 8383 00 00

RAPESEEDRAPESEED 00 00 00 00 33 4242 5555 00

MUSTARDMUSTARD 00 00 00 00 33 6262 3535 00

(Source : Asian Institute of Petroleum Studies)

CARBON CHAIN PROFILE

DieselDiesel ParametersParameters CMECME BenefitsBenefits

5151

4949OOCC

0.05%0.05%

0%0%

3-4 cst3-4 cst

3,800 gms3,800 gms

360360OOCC

Cetane NumberCetane Number

Flash PointFlash Point

Sulfur ContentSulfur Content

Oxygen ContentOxygen Content

Kinematic Kinematic ViscosityViscosity

Lubricity (BOCLE)Lubricity (BOCLE)

T90 TemperatureT90 Temperature

62.862.8

114114OOCC

0%0%

11%11%

2-3 cst2-3 cst

>7,000 gms>7,000 gms

313313OOCC

Better ignition / good accelerationBetter ignition / good acceleration

Safe in handling and storageSafe in handling and storage

No SONo SOXX emission emission

Complete combustion, less smokeComplete combustion, less smoke

Good atomizationGood atomization

Enhances efficiency of fuel pumpEnhances efficiency of fuel pump

Good volatility rangeGood volatility range

TECHNICAL DATA: CME VS. DIESEL

Venue/Venue/

DateDate

Test VehicleTest Vehicle Opacity (“k” value)Opacity (“k” value) % %

ReductionReductionDieselDiesel w/ 1% CMEw/ 1% CME

Holiday Hotel Holiday Hotel (Cebu) (Cebu)

Mar. 2, 2004Mar. 2, 2004

Isuzu Crosswind Isuzu Crosswind (odometer reading: (odometer reading: 29,000 km)29,000 km)

0.5310.531 0.3710.371 30%30%

Grand Meng Grand Meng Seng (Davao)Seng (Davao)

Mar. 3, 2004Mar. 3, 2004

Isuzu HilanderIsuzu Hilander 2.4752.475 2.1302.130 14%14%

Multi-purpose Multi-purpose Hall (Baguio)Hall (Baguio)

Mar. 10, 2004Mar. 10, 2004

Kia SportageKia Sportage(1997 model; (1997 model; odometer reading: odometer reading: 82,892)82,892)

7.7227.722 3.4263.426 59%59%

San Pablo San Pablo City (Laguna)City (Laguna)

Mar. 21, 2004Mar. 21, 2004

Isuzu HilanderIsuzu Hilander(2001 model)(2001 model)

1.3301.330 0.3520.352 74%74%

EMISSION REDUCTION AT 1% CME Blend

COST EFFECTS

• At 1% blend, additional cost of biodiesel is 2-3% over petroleum diesel.

Price of Diesel: P 34 per liter

Price of CME: P 86.00 – 130.00 per liter

At 1% CME blend, cost of CME-Diesel fuel:Diesel (99%)Diesel (99%) CME (1%)CME (1%) Diesel + 1% CMEDiesel + 1% CME Add-on CostAdd-on Cost

P 33.66P 33.66 P 0.86 – 1.30P 0.86 – 1.30 P 34.52 – 34.96P 34.52 – 34.96 P 0.52– 0.96 per literP 0.52– 0.96 per liter

Fuel Economy

• Studies shows, there is an average increase of fuel mileage at 1.5 km per liter of 1% CME-Diesel Blend.

• A car that travels 2,600 km per month (or 100 km/day for 26 days a month), with a fuel economy of 8 km/liter when using diesel, will have a monthly fuel savings of:

Pure DieselPure Diesel CME (1%)CME (1%) Ave. Monthly SavingsAve. Monthly Savings

P 11,050P 11,050 P9,568 – P9,448P9,568 – P9,448 P 1,542P 1,542

• Annual Savings of P 18,506 per vehicle

A USDOE/USAID-commissioned NREL Tests were conducted to address the concerns of oil companies and car manufacturers:

Biodiesel quality specification(to determine compliance of CME samples with PNS)

Oxidation stability(to determine how long CME can be safely stored and its behavior under

extreme conditions)

Thermal stability

(to determine if CME quality changes on various storage conditions)

Microbial growth(to determine microbial growth in CME samples considering microbes cause

corrosion in the fuel system and premature filter plugging)

Method for determining biodiesel content in blended fuels

TECHNICAL VALIDATION

NREL Test ResultsNREL Test ResultsPropertiesProperties PNS Stds.PNS Stds. CMECME DieselDiesel

Flash PointFlash Point 100 min100 min 107107 8585

Cetane numberCetane number 42 min42 min 7070 5555

Water & SedimentWater & Sediment 0.05 max0.05 max 0.000.00 .01.01

Sulfur, ppmSulfur, ppm .05.05 .0003.0003 .000382.000382

Kinematic viscosityKinematic viscosity 2-4 2-4 2.6562.656 3.5703.570

Total GlycerineTotal Glycerine 0.24 max0.24 max 0.1450.145 --

Sulfated AshSulfated Ash 0.02 max0.02 max 0.0020.002 <0.001<0.001

POLICY INITIATIVESPOLICY INITIATIVES

• Philippine National Standards on CME: PNS 2020:2003 Philippine National Standards on CME: PNS 2020:2003 (May 2003)(May 2003)

• M.C. No. 55: “Directing all Departments, Bureaus, Offices and M.C. No. 55: “Directing all Departments, Bureaus, Offices and Instrumentalities of the Government, … to Incorporate the Use of 1% by Instrumentalities of the Government, … to Incorporate the Use of 1% by Volume CME in Their Diesel Requirements” Volume CME in Their Diesel Requirements” (Feb. 9, 2004)(Feb. 9, 2004)

• Alicia (Isabela) Resolution No. 2004-009: “Requiring the Use of CME by Alicia (Isabela) Resolution No. 2004-009: “Requiring the Use of CME by All Motorists … in Support of the Clean Air Act” All Motorists … in Support of the Clean Air Act” (February 11, 2004)(February 11, 2004)

• D.C. No. 2004-04-003: “Rules and Regulations Implementing M.C. 55” D.C. No. 2004-04-003: “Rules and Regulations Implementing M.C. 55” (March 29, 2004)(March 29, 2004)

• Supreme Court M.C. No. 07-2004: “Directing the Supreme Court, Court of Supreme Court M.C. No. 07-2004: “Directing the Supreme Court, Court of Appeals, Sandiganbayan and the Court of Tax Appeals to Use 1% CME” Appeals, Sandiganbayan and the Court of Tax Appeals to Use 1% CME” (June 23, 2004) (June 23, 2004)

• Baguio City Resolution No. 154, Series of 2004: “Encouraging the Use of Baguio City Resolution No. 154, Series of 2004: “Encouraging the Use of CME by All Motorists … in Support of the Clean Air Act” CME by All Motorists … in Support of the Clean Air Act” (June (June 29, 2004) 29, 2004)

• D.C. No. 2005-04-003: “Promoting the Use of Coco-Biodiesel as an D.C. No. 2005-04-003: “Promoting the Use of Coco-Biodiesel as an Alternative Clean Fuel” Alternative Clean Fuel” (March 1, 2005)(March 1, 2005)

COCO-BIODIESEL PROGRAM

Memorandum Circular No. 55

• M.C. No. 55: “Directing all Departments, Bureaus, Offices and Instrumentalities of the Government, … to M.C. No. 55: “Directing all Departments, Bureaus, Offices and Instrumentalities of the Government, … to incorporate the use of 1% by volume CME in their diesel requirements” incorporate the use of 1% by volume CME in their diesel requirements” (Feb. 9, 2004)(Feb. 9, 2004)

OBJECTIVES:OBJECTIVES: To promote the use of Coco-BiodieselTo promote the use of Coco-Biodiesel

as a cleaner alternative transport fuelas a cleaner alternative transport fuel

To enhance diversification of fuel sourcesTo enhance diversification of fuel sources

Compliance resultCompliance result

80 complying government agencies with 1,150 diesel-fed vehicles blended 1% CME80 complying government agencies with 1,150 diesel-fed vehicles blended 1% CMEFeedback from usersFeedback from users- - 76% reported improved mileage/increased in mileage and 24% uncertain76% reported improved mileage/increased in mileage and 24% uncertain 80% lighter emission and 20% uncertain or not aware 80% lighter emission and 20% uncertain or not aware

SALIENT POINTS OF BIOFUELS BILLSALIENT POINTS OF BIOFUELS BILL(BIODIESEL)(BIODIESEL)

Declaration of policyDeclaration of policy

1.1. Develop and utilize indigenous renewable energy Develop and utilize indigenous renewable energy sources to reduce dependencesources to reduce dependence

2.2. Mitigate toxic and green house gas emissionsMitigate toxic and green house gas emissions

3.3. Increase rural employment and incomeIncrease rural employment and income

Mandatory use of Mandatory use of BiodieselBiodiesel

1.1. Immediately upon the effectivity of the IRR of the ActImmediately upon the effectivity of the IRR of the Act

aa. blending a minimum of 1% biodiesel by volume into . blending a minimum of 1% biodiesel by volume into all diesel engine fuel distributed and sold nationwide;all diesel engine fuel distributed and sold nationwide;

bb. must conform with the PNS on biodiesel;. must conform with the PNS on biodiesel;

2.2. Creation of Philippine Biofuel Board (PBB)Creation of Philippine Biofuel Board (PBB)

a.a. empowered to determine the feasibility of empowered to determine the feasibility of increasing the blendincreasing the blend

bb. mandate a total of 2% by volume blend of . mandate a total of 2% by volume blend of Biodiesel within 2years from the effectivity of the Act. Biodiesel within 2years from the effectivity of the Act.

20122012201120112010201020092009200820082007200720062006

I Implementation of BIOFUELS ACT

II IRR Formulation

III Infrastructure Dev’t • Accreditation of

manufacturers/sellers

IV Technical validation/Assessment• Laboratory analysis and

engine tests • Coconut Plantation/Other

feedstock Enhancement

V. Technology compatibility • Availability of flex-fuel

vehicles

VI. IEC• Tri-media campaign,

consultations. Seminars• Monitoring of Implementation

BIODIESEL PROGRAMIMPLEMENTATION

40M liters

1% CME 2% Biodiesel Blend 5 % biodiesel blend

111 M liters 200 M Liters

For higher blends CME/ JME Biodiesel

BIODIESEL DEMAND PROJECTION

YearYear Projected Projected Diesel Diesel

Demand (in Demand (in Million Million LitersLiters

Mandated Mandated BlendBlend

Biodiesel Biodiesel requirement requirement (in million (in million

liters)liters)

Estimated Estimated coconut oil coconut oil

requirement** requirement** (in million (in million

tons)tons)

% % Coconut oil Coconut oil requirementrequirement

******

20062006 3,9643,964 1%1% 4040 4040 33

20072007 4,1214,121 1%1% 4141 4141 33

20082008 4,2744,274 2%2% 8585 8585 66

20092009 4,4474,447 2%2% 8989 8989 66

20102010 4,5864,586 2%2% 9292 9292 77

20112011 4,7864,786 2%2% 9696 9696 77

20122012 4,9884,988 2%2% 100100 100100 77

20132013 5,1915,191 2%2% 104104 104104 77

20142014 5,3655,365 2%2% 107107 107107 88

20152015 5,5445,544 2%2% 111111 111111 88

Coconut conversion to CME = 1:1 , Coconut oil production apprx. 1.4 billion liters

Coconut Plantation RequirementCoconut Plantation Requirement

Percent BlendPercent Blend

Volume of CME Volume of CME RequirementRequirement

((Million liters /yearMillion liters /year))

Coconut Plantation Coconut Plantation RequirementRequirement

(Hectares)(Hectares)

1%1%

2 %2 %

5%5%

10%10%

4040

111111

200200

400400

83, 33383, 333

231,000231,000

417,000417,000

833,000833,000

Basis: 1 hectare = 480 liters CME

Present Scenario:

3 M hectares planted to coconut trees, 2.4M metric tons total copra Capacity

4.9 M MT total copra crushing capacity,

1.4 Billion liters total oil production in which 80% is exported, 20% is consumed locally

4 Producing facility of CME with total capacity of 111 million liters /year

JJATROPHA ATROPHA BBIODIESELIODIESEL

• Meetings were conducted in 2005 with NAPC-NEDA, PNOC, NRDC, AFP and private

entities to discuss the use of Jatropha as biodiesel feedstock leading to the:

development of an implementation plan (activities and timeframe)

identification of the roles and functions of implementing agencies

identification of resources and logistical requirements

What has been Done

Indian mission study represented by DOE, DOST and DA

“Feasibility Study for the Production and Processing of Biodiesel conducted by

FAO for DOST

Visits to D1 and PFC plantations in General Santos and Nueva Ecija, respectively

What has been Done

Issues and Concerns(Plantation)

Seed VarietySeed Variety Source of seeds/seedlings etc.Source of seeds/seedlings etc. Oil recoveryOil recovery Crop managementCrop management Hectarage RequirementsHectarage Requirements Pest managementPest management Economics Economics OthersOthers

Issues and Concerns(Production)

Technology availabilityTechnology availability– Small scale capacitySmall scale capacity– Large scale capacity (?)Large scale capacity (?)

Standards formulationStandards formulation Economics against dieselEconomics against diesel Intellectual Property RightsIntellectual Property Rights OthersOthers

Issues and Concerns(Utilization)

Local and Global ExperiencesLocal and Global Experiences Vehicle CompatibilityVehicle Compatibility

–Engine PerformanceEngine Performance–EmissionEmission–Engines and parts durabilityEngines and parts durability

Supply AccessibilitySupply Accessibility OthersOthers

Steps Forward

• Creation of a Technical Working Group to address issues and concerns on plantation, production and utilization.

- Development of biodiesel standard appropriate for Philippine conditions

- Resource and technology assessment, variety identification and improvement and seed system, crop management, characterization of variety, pest

management, among others.

• Creation of IEC Taskforce on dissemination of right information to farmers and other interested parties.

Steps Forward

• Testing of JME samples leading to fuel registration and accreditation.

• Identification of production technology for JME

• Registration and certification of JME

• Biofuels Summit

PNOC-EDC –established jatropha nursery 5 hectares plantation in Dacong Cogon Negros Occidental in coordination with D1 Oils (3 mos. old)

PFC – 35 has. Plantation in Fort Magsaysay Nueva Ecija in collaboration with Phil. Army ( 1 year old) and established nursery in Ligao Albay

Provincial Government of Camarines Sur - 10 has. plantation in collaboration with PAFC ( 6 mos. Old)

D1 Oils - 200 has. Plantation in Gen. Santos ( 3 mos. Old)

Lacto Asia - 17 has. Plantation in Camarines Sur (flowering)

STATUS

20112011201020102009200920082008200720072006200620052005

Technology Assessment

• Fuel properties• Engine performance and

emissions• Engine durability • Capacity building• R&D

Policy Action• Techno-Economic Study• Creation of focus groups, multi-

sectoral / inter-agency linkages•TWG on Fuel / Engine Tests

• International cooperation• Standards development /

adoption

IEC / Market Development

• Tri-media campaign, consultations, seminars

Supply Infrastructure• Development of Jatropha supply

chain• Production of

JME/Registration/Accreditation

Jatropha IMPLEMENTATION PLAN

WHY BIOETHANOL FUEL?

Considered as an environmental and economic development strategy:

• Reduces dependence on imported oil• Increases economic activity in the countryside• Employment booster• Environmentally-friendly• Improves combustion and reduces emissions

BIOETHANOL FUEL PROGRAM

Investments/InfrastructureInvestments/Infrastructure Launching of the NDC-Bronzeoak Fuel Ethanol and Power Launching of the NDC-Bronzeoak Fuel Ethanol and Power

Plant in San Carlos, Negros Occidental (May 30, 2005)Plant in San Carlos, Negros Occidental (May 30, 2005) Three (3) prospective investors given endorsement for fuel Three (3) prospective investors given endorsement for fuel

ethanol production ethanol production Total capacity of 380, 000 liters /day to start operation by Total capacity of 380, 000 liters /day to start operation by

2008 2008

Supply DevelopmentSupply Development Launch of the First Fuel Ethanol (E10) Gasoline Fueling Launch of the First Fuel Ethanol (E10) Gasoline Fueling

Facility of Seaoil (August 29, 2005)Facility of Seaoil (August 29, 2005) Availability of E10 in all Seaoil gasoline stations nationwide Availability of E10 in all Seaoil gasoline stations nationwide

and 4 Flying V stations in Metro Manilaand 4 Flying V stations in Metro Manila Availability of E10 in Shell gasoline stations in Metro ManilaAvailability of E10 in Shell gasoline stations in Metro Manila

StandardsStandards Philippine National Standard for Bioethanol Fuels Philippine National Standard for Bioethanol Fuels

promulgated April 2006promulgated April 2006

Fuel EthanolFuel Ethanol(Status)(Status)

Fuel EthanolFuel Ethanol

Demand and Supply Requirements

Percent Percent BlendBlend

Ethanol Ethanol Requirements Requirements

(liters)(liters)

Total Number Total Number

Mfg Plants Mfg Plants RequiredRequired

Required Required sugarcane sugarcane

plantation (has.) plantation (has.)

5%5% 268,000,000268,000,000 99 63,81063,810

10%10% 721,000,000721,000,000 1616 171,667171,667

Present Scenario:389,000 has. Sugarcane 60 tons sugar/has70 liters bio-ethanol/ton sugarcane

201020102009200920082008200720072006200620052005

Technology• Laboratory and engine testing • Capacity building• R&D other feedstock• Technology compatibility

•Availability of flexi-fuel vehicles

Policy Action

• Technical / economic & pricing mechanism study on ethanol production / use on different feedstock

• Creation of focus groups, multi-sectoral / inter-agency linkages

• International cooperation• Standards promulgation• Legislation (Biofuels Act )

IEC / Market Development• Tri-media campaign, consultations,

seminars

Supply Infrastructure• Ethanol importation • Ethanol production

• upgrading (6-8 months)• new facilities (1.5-2 years)

• Blending facilities / distribution network• Development of other feedstock supply

chain

Nationwide5% blend

Nationwide5% blend

Nationwide10% blendNationwide10% blend

FUEL ETHANOL PROGRAM IMPLEMENTATION

Voluntary use10% blend

Voluntary use10% blend

Imported ethanol 5% locally 10% locally

BIOETHANOL DEMAND PROJECTION

YearYear Projected Projected Gasoline Gasoline

Demand (in Demand (in Million Million LitersLiters

Mandated Mandated BlendBlend

Bioethanol Bioethanol requirement requirement (in million (in million

liters)liters)

Sugar cane Sugar cane requirement requirement (in million (in million

tons)tons)

Area Area Requirement Requirement

(hectares)(hectares)

% % area area

requirementrequirement

AA BB CC D = B x CD = B x C E = D / 70E = D / 70 F = E/60F = E/60 G = F / G = F / 389,000389,000

20062006 4,5954,595 00

20072007 4,8454,845 00

20082008 5,1025,102 5%5% 255255 3.63.6 60,00060,000 1515

20092009 5,3705,370 5%5% 269269 3.83.8 63,33363,333 1616

20102010 5,6505,650 10%10% 565565 8.18.1 135,000135,000 3535

20112011 5,9395,939 10%10% 594594 8.58.5 141,667141,667 3636

20122012 6,2396,239 10%10% 624624 8.98.9 148,333148,333 3838

20132013 6,5496,549 10%10% 655655 9.49.4 156,667156,667 4040

20142014 6,8706,870 10%10% 687687 9.89.8 163,333163,333 4242

20152015 7,2107,210 10%10% 721721 10.310.3 171,667171,667 4444

SALIENT POINTS OF BIOFUELS ACTSALIENT POINTS OF BIOFUELS ACT

Powers and Functions Powers and Functions of Philippine Biofuel of Philippine Biofuel

BoardBoard

1.1. Review, monitor the implementation of, and Review, monitor the implementation of, and evaluate for further expansion, the Phil. Biofuel evaluate for further expansion, the Phil. Biofuel Program prepared by the DOEProgram prepared by the DOE

2.2. Monitor the supply and utilization of biofuels Monitor the supply and utilization of biofuels and biofuel blends and recommend and biofuel blends and recommend appropriate measures in cases of shortage of appropriate measures in cases of shortage of feedstock supply for approval of the Secretary feedstock supply for approval of the Secretary of DOE.of DOE.

3.3. Review and adjust the minimum mandated Review and adjust the minimum mandated biofuel blends as it deems appropriate, subject biofuel blends as it deems appropriate, subject to publication; provided that the minimum to publication; provided that the minimum blend shall not be lowered within seven (7) blend shall not be lowered within seven (7) years from the effectivity or full years from the effectivity or full implementation of the mandated minimum implementation of the mandated minimum blend blend

SALIENT POINTS OF BIOFUELS ACTSALIENT POINTS OF BIOFUELS ACT

Powers and Functions Powers and Functions of Philippine Biofuel of Philippine Biofuel

BoardBoard

4.4. Recommend program that will ensure the Recommend program that will ensure the availability of alternative fuel technology for availability of alternative fuel technology for vehicles, engines and parts in consonance vehicles, engines and parts in consonance with the mandated minimum blends and with the mandated minimum blends and maximize the utilization for the adoption and maximize the utilization for the adoption and and implementation of appropriate government and implementation of appropriate government agencies;agencies;

5.5. Recommend specific actions to be executed by Recommend specific actions to be executed by the DOE and other appropriate agencies of the the DOE and other appropriate agencies of the government in the implementation of the government in the implementation of the Philippine Biofuel ProgramPhilippine Biofuel Program

SALIENT POINTS OF BIOFUELS BILLSALIENT POINTS OF BIOFUELS BILL

Composition of Composition of Philippine Biofuel Philippine Biofuel

BoardBoard

Chairman - DOE Secretaries or designated Chairman - DOE Secretaries or designated Undersecretaries as ChairmanUndersecretaries as Chairman

Members - Secretaries or Designated Members - Secretaries or Designated Undersecretaries or Asst. secretaries :Undersecretaries or Asst. secretaries :

DTI, DAF, DOTC, DOF- Bureau of DTI, DAF, DOTC, DOF- Bureau of Internal Revenue, Bureau of Customs Internal Revenue, Bureau of Customs and Tariff Commission, DENR, and Tariff Commission, DENR, Representative from biofuel industry, Representative from biofuel industry, petroleum industry, and automotive petroleum industry, and automotive industry endorsed by their respective industry endorsed by their respective Associations and appointed by Associations and appointed by President of the Philippines.President of the Philippines.

The board shall be assisted by the The board shall be assisted by the Technical Secretariat attached to the Technical Secretariat attached to the office of the Secretary of the DOE or office of the Secretary of the DOE or Usec.Usec.

SALIENT POINTS OF BIOFUELS BILLSALIENT POINTS OF BIOFUELS BILL

IncentivesIncentives

A.A. Specific Tax on biofuels, per liter of volume capacity, Specific Tax on biofuels, per liter of volume capacity, shall be zero (0);shall be zero (0);

B.B. Duties and taxes on the importation of machinery and Duties and taxes on the importation of machinery and equipment actually, directly and exclusively for use in the equipment actually, directly and exclusively for use in the production of biofuels shall be exempted for the period production of biofuels shall be exempted for the period 10 years, provided it is certified and accredited by DOE;10 years, provided it is certified and accredited by DOE;

C.C. All investments in the production, blending, and All investments in the production, blending, and distribution of biofuels and adoption of biofuel-compliant distribution of biofuels and adoption of biofuel-compliant vehicle technologies shall enjoy the applicable fiscal and vehicle technologies shall enjoy the applicable fiscal and non fiscal incentives as may be provided under the non fiscal incentives as may be provided under the Omnibus Investment Code;Omnibus Investment Code;

D.D. All effluents such as but not limited to distillery slops All effluents such as but not limited to distillery slops from the production of biofuels used as liquid fertilizer from the production of biofuels used as liquid fertilizer and for other agricultural purposes are considered reuse and for other agricultural purposes are considered reuse and shall not be covered by RA9275 or Clean Water act and shall not be covered by RA9275 or Clean Water act but subject to DENR monitoring and evaluation and but subject to DENR monitoring and evaluation and approval of the DA approval of the DA

SALIENT POINTS OF BIOFUELS ACTSALIENT POINTS OF BIOFUELS ACT

Incentives (cont…)Incentives (cont…)

e. Government financial Institution shall e. Government financial Institution shall accord high priority to extend financing to accord high priority to extend financing to entities that shall engage in activities entities that shall engage in activities involving production, storage, handling involving production, storage, handling and transport of biofuel and biofuel and transport of biofuel and biofuel feedstock, including the blending of feedstock, including the blending of biofuels with petroleum, as certified by the biofuels with petroleum, as certified by the DOEDOE

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