Philippine legislature approves biofuels bill

The Philippines bicameral conference committee on November 23 approved a reconciled version of the proposed Biofuels Act of 2006 which will require blending 5% locally-sourced ethanol with gasoline within two years upon effectivity of the law and 1% biodiesel using coconut methyl ester to regular diesel fuel within three months. The mandated blend will increase to 2% for biodiesel two years from the effectivity of the law and to at least 10% for bio-ethanol four years after the effectivity of the law. The Department of Energy estimates that a 5% bioethanol blend and a 1% biodiesel blend will result in a combined foreign exchange savings of US$167 million annually. This is projected to go up to US$389 million when the blend is increased to 10% ethanol and 2% biodiesel. With an annual gasoline consumption of 4 billion liters, the 5% ethanol blend (E-5) will require a supply of 200 million liters of ethanol each year. Industry analysts say that while the country already has the capacity to meet the coconut oil biodiesel target, ethanol blending will require sizable capital investment as there is no production capacity in place yet. (November 24, 2006)