Higher biofuel blend a win-win solution — Energy chief

The implementation of a higher biofuel blend of fuel sold at local pumps will create a twin impact of creating much-needed livelihood for coconut farmers and generating substantial savings for motorists.

“Implementing the higher biofuels blend is a win-win solution as we promote economic growth, uphold environmental stewardship, and strive for cleaner energy utilization. It is also about investing in a future where sustainability drives progress,” Energy Secretary Raphael P.M. Lotilla said on Tuesday.

According to the Department of Energy (DoE), a 30,000-kilometer on-road test using a higher coco methyl ester (CME) blend of 5 percent resulted in an approximately 10 percent increase in mileage, translating into an estimated net savings of P4.17 per liter of diesel.

Conversely, increasing the ethanol blend in gasoline to 20 percent could potentially lead to an estimated decrease of around P3.21 per liter at the gasoline pump.

Meanwhile, Sugar Regulatory Administration (SRA) CEO and Administrator Pablo Luis Azcona said the policy will bring more opportunities for millions of local sugarcane farmers.

"The increase in blend will also allow ethanol plants to maximize production using local feedstock. This will also bring down the average price of ethanol without lowering the price of locally produced ethanol, as more imported ethanol is added to the mix," Azcona said.

"Also the increase in blend through this will lower the price of gasoline and diesel, of which the 5m people dependent on the sugarcane industry use for their farming and their daily life," he added.

Based on the recommendations of the National Biofuels Board (NBB), the DoE has issued the Department Circular No. 2024-05-0014 outlining guidelines for downstream oil industry players to implement a 3 percent CME blend in all diesel fuel sold across the country starting in October.

The blend percentage will gradually increase to 4 percent by 1 October 2025, and further to 5 percent by October 2026.

The guidelines also emphasized that downstream oil industry players may also have the option to boost the ethanol blend in all gasoline fuel by 20 percent, up from the current 10 percent, to lower domestic pump prices.

With approximately 900 million additional nuts as feedstocks, it will be possible to create around 100 to 120 million liters of additional CME requirements, meeting a 1 percent mandatory increase in the CME blend.

To achieve a seamless and timely shift to higher biofuel percentages, the downstream oil industry needs to have adequate storage capacity, blending facilities, transportation systems, and dedicated storage tanks with dispensing pumps.

The Biofuels Act of 2006 mandates that all liquid fuels used in motors and engines sold in the Philippines must be mixed with biofuels.

The current ethanol blend for gasoline has been steady at 10 percent since 2012, while CME blending last increased to 2 percent in 2007.