SAN CARLOS CITY -- Ethanol producers in the country, including those in Negros Occidental, are asking the government to allow them to import feedstock particularly molasses to address the dwindling supply of raw materials.
Roxas Holdings Inc. (RHI) president and chief executive officer Hubert Tubio, in an interview at the San Carlos Bioenergy Inc. (SCBI) in this northern Negros Occidental city Tuesday, said the challenge on lack of feedstock is currently confronting the local ethanol production industry.
Tubio said ethanol plants, like SCBI, need feedstock to be able to operate continuously. Prices of feedstock like sugarcane and molasses are very high nowadays.
“Well, this is due to weather conditions thus, farms are not producing enough tonnage,” he said, adding that with the press mild El Niño effects farms in the province are expected to be more productive in the next crop year.
SCBI is an ethanol subsidiary of RHI located in 25.7-hectare property at San Carlos Ecozone in Barangay Punao.
Started its operation in 2009, the Philippine Economic Zone Authority (Peza) registered facility is the first integrated fuel ethanol distillery and cogeneration plant in Southeast Asia.
In terms of capacity, it produces 135,000 liters of anhydrous alcohol per day. With its multi-million Anaerobic Digesters which was unveiled last November, the plant’s improved daily production capacity increased to 150,000 liters.
However, like other ethanol-producing firms in the country, SCBI is also challenged by the deficit in feedstock, which has been a trend since the past three years.
Luis Villa-Abrille, SCBI consultant and past president, said the Philippines is only producing an average of about 1.1 million tons of molasses annually.
Villa-Abrille the demand for gasoline in the country is now at 500 million liters so the demand for ethanol being supplied has grown.
“The 1.1 million tons of molasses is not enough to supply 50 or 60 percent of the ethanol that’s going to be produced so we resort to importation of ethanol,” he said, adding that “but, why not allow us to import molasses then we will produce the ethanol and sell it.”
Villa-Abrille pointed out that it would be for the greater good because ethanol now is sold at P60 per liter, it could easily be brought down to P50 or P48 if molasses will be brought down back to the level of P8,000 to P9,000 per metric ton.
In fact, such proposal to import molasses was already brought to the attention of House Speaker Gloria Macapagal-Arroyo, who was the principal advocate of the Biofuels Act of 2006.
In a meeting with Macapagal-Arroyo in their plant Tuesday, SCBI officials presented to the legislator the challenges confronting the ethanol industry.
The house speaker then scheduled for a Visayas Development Oversight Committee meeting in the Congress on April 25 to be attended by the Department of Energy (DOE) and Sugar Regulatory Administration (SRA), among other concerned agencies.
It will be presided by First District Representative Melecio Yap, who was also present during the meeting.
Also present at the meeting were Negros Occidental Governor Alfredo Marañon Jr. and San Carlos City Mayor Gerardo Valmayor Jr.
Tubio said the importation would allow several “good things” to happen. For one, it will enable producers to operate the facility at the capacity that is being built.
Second, it will alleviate the prices of molasses because “we will not be pushing hard for the volume that we need to do. We will not be competing that hard.”
“Aside from alleviating the pricing, it will also ensure continuous works for the employees,” Tubio said, adding that if they have the capacity to spend, then business in the area will also be improving.
He noted that this is a situation where regulators like the DOE and SRA will also consider the general good and “allow us to make the business more sustainable for everyone.”
As this developed, the Ethanol Producers Association of the Philippines (Epap) has drafted a letter requesting the DOE to allow importation of feedstock or molasses on a “controlled” or regulated basis to make sure that the pricing in the domestic molasses production won’t be disrupted.
Epap president Jose Villanueva, also the chief manufacturing officer of RHI, said the growth in capacity was not augmented by the availability of raw material supply especially the feedstock.
So what the association wants now is to identify and bridge the gap in a controlled process to still protect the planters, Villanueva said.
“We are not importing because only of income generation,” he said, adding that “instead, it’s to cope up with the utilization of the plants because we don’t want to stop due to the absence of raw materials.”