Wednesday, October 11, 2006 Pimentel: Bio-fuel bill By Senator Aquilino Pimentel Jr. Senate of the Philippines
THE Senate should immediately resume floor deliberations on the long-overdue proposed Bio-Fuels Act and resolve all contentious issues so that it can be approved, possibly before Congress goes on recess on October 14.
I am dismayed that the bill, which promotes the development and widespread use of ethanol, coco-diesel and other agriculture-based alternative and renewable sources of fuel, remains stuck in the legislative mill for several months now despite being certified by Malacañang as urgent.
I fully understand the impatience of Representative Juan Miguel Zubiri, principal author of the House version of the Bio-Fuels Act bill, over the continued delay in the passage of the measure in the Senate.
Consequently, plans to set up plants that will produce ethanol (ethyl alcohol) out of sugarcane have been indefinitely put on hold.
Several investors are waiting in the wings before proceeding with the construction of ethanol refineries, particularly in Negros Island, since they wish to avail of tax privileges concessional credit facility and other incentives that are embodied under the proposed Bio-Fuels Act.
Misconception
The Senate should exert efforts to approve the proposed Bio-Fuels Act to dispel the misconception in some quarters about a deliberate attempt to derail the measure, especially in the light of lobbying by some oil companies to consider their suggestions.
It should be noted that Senator Miriam Defensor Santiago, chairperson of the Senate committee on energy, has reported for work after taking a few days' sick leave.
The proposed Bio-Fuels Act seeks to grant state incentives to manufacturers of ethanol, diesel and other forms of so-called green fuel that will lessen the country's dependence on oil and other fossil-based fuel. Incentives will also be granted to makers of flex-fuel vehicles.
The country imports $3.9 billion worth of crude oil and petroleum products a year. The shift to bio-fuels will not only save enormous amounts of foreign exchange but also alleviate pollution and provide cleaner air for the people to breathe.
The proposed Senate version of the bill requires that within two years from the effectivity of this legislation, a minimum of five percent bio-ethanol fuel by volume shall be blended into all gasoline distributed and sold in the country.
Blend
It mandates a 10-percent blend of bio-ethanol gas sold at pump stations within four years of effectivity of the proposed law.
Studies by energy experts show that with a 10-percent mandated ethanol blend, the country can reduce its gasoline importation by as much as 100 million liters annually, that will translate into a $100 million savings in foreign exchange yearly or $1 billion in 10 years.
Under the bill, the importation of machinery and equipment to be used exclusively for the production of bio-fuels shall be exempt from import duties for a period of five years from the date the companies were accredited by the Department of Energy. Likewise, bio-fuels shall have a zero specific tax.
All investments in the production, blending and distribution of bio-fuels and adoption of bio-fuel complaint vehicle technologies shall enjoy the applicable fiscal and non-fiscal incentives as may be provided for under the Omnibus Investment Code.
Government financial institutions, such as the Development Bank of the Philippines, Land Bank of the Philippines, Quedancor and similar other government institutions, shall accord high priority to extend financing to entities that will engage in the production, storage, handling and transport of bio-fuel, including the blending of bio-fuels with petroleum.
