THE Department of Energy (DOE) has step in to the growing conflict between local ethanol producers and oil companies concerning the implementation of the Biofuels Law.
DOE-Oil and Management Bureau chief Zenaida Monsada said they will ask Congress to intervene by clearing some provisions of the law, which mandates the 10 percent blending of ethanol in all gasoline by 2011.
Under the law, importations of ethanol are only allowed in the first four years. But by 2011, oil companies are mandated to source all their ethanol requirements domestically.
Monsada said our supply could not be sufficient to the demand since for this year we are only producing 83 million liters as compared to the 219 million liters requirement of the country.
It is further expected that with the implementation of the 10 percent blend next year, supply will not be sufficient.
Platts, a leading global provider of energy and metals information also said that the Philippines will still be short of 200 million liters in ethanol supply by next year.
Monsada noted that Congress should clear whether they should continue implementing the 10-percent blend or to mandate ethanol blending to the extent of what is available locally.
Another option, Monsada said, is to pursue the 10 percent blending and allow the oil companies to just import their ethanol requirements that cannot be supplied locally.
He said they will be presenting the proposal to Energy Secretary Jose Rene Almendras.
To recall, the Ethanol Producers Association of the Philippines claimed that oil companies refused to heed the Biofuels Law, which mandates all liquid fuels for motors and engines in the country to contain “locally-sourced” biofuels.
But the Independent Philippine Petroleum Companies Association (IPPCA) noted that sourcing the ethanol domestically would result in higher fuel prices.
“The local industry needs time to catch up before it can be competitive. We should therefore give it some time for the alternative feedstocks like the cassava plantations to begin operating in a couple of years,” said IPPCA president Fernando Martinez.
At present, there are only two ethanol plants in the country and these are the San Carlos Bionergy Inc., which has a capacity of 40 million liters per year and the Leyte Agri Corp., which produces nine million liters per year. (MSN/Sunnex)