Chemrez Technologies Inc., the country’s largest biodiesel manufacturer, welcomed the publication of the draft circular issued by Department of Energy that lays down the guidelines on biofuel blend implementation, albeit delayed by a decade.
Dean Lao Jr., president and chief executive of Chemrez, a wholly-owned unit of listed D&L Industries Inc., on Friday described the DOE circular as “a huge step towards progress and the development of biodiesel and coconut industry in general.”
“This should pave the way for a greater energy self-sufficiency while collectively reducing our CO2 (carbon dioxide) footprint on the planet,” Lao added.
The DOE circular mandates an increase in biodiesel blend from 2 percent or B2 to 3 percent or B3 effective 1 July 2024. It will then rise to 4 percent or B4 effective 1 July 2025, and to 5 percent or B5 effective 1 July 2026.
A higher biodiesel blend means displacing imported petrochemical fuel with locally produced, environmentally-friendly, and sustainable fuel. With an annual diesel consumption of the Philippines at around 15 billion liters, an eventual hike to B5 from B2 means a 3 percent reduction in diesel volume which translates to about 450 million liters of diesel displaced by biodiesel annually.
With cars being one of the biggest contributors to global warming, the greater use of a more environmentally friendly biodiesel will result in a significant reduction in the Philippines’ greenhouse gas emissions.
Lao said it is estimated that the implementation of B5 will result in about 1.1 million metric tons reduction in CO2 equivalent annually, which is a massive reduction equivalent to 13 times the annual GHG emissions of D&L as a whole. “The biodiesel industry has effectively created a giant carbon sink for the Philippines,” he added.
Tests done by the DOE also showed that a hike to B5 from B2 will result in a mileage improvement of around 10 percent which will further add up to the previously mentioned CO2e reduction. It also improves air quality as coconut methyl ester, or CME, improves the fuel quality which in turn allows it to burn completely and emit less black smoke.
For over a decade already, the biodiesel industry has been operating in an oversupply situation with industry utilization just around 40 percent. This has resulted in a highly competitive landscape and depressed margins for the industry players.
With the proposed increase in blend, the industry expects a better utilization and overall profitability which is expected to trickle down to the various segments of the local economy. The greater use of indigenous fuel means less imported diesel and lower foreign currency requirements.
