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Special
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Written by Sabrina Deparine
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Monday, 01 June 2009 12:26 |
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Page views: 1578 |
The Biofuels Act of 2006 (RA 9367), which took effect in May 2007, mandates that all gasoline fuel products distributed and sold by oil companies in the Philippine market should have at least 5% bioethanol blend by volume by 2009 increasing to at least 10% by 2011. According to the Department of Energy (DOE), this mandate will result to a demand for 230 million liters of bioethanol this year. This figure is expected to double in two years when the 10% mandate takes effect.
 The law guarantees the industry that there will be a market for bioethanol. But more than the guaranteed demand, there are other good reasons why it makes sense to invest in the Philippine ethanol industry. The Philippines is primarily an agricultural country. It is blessed in terms of potential areas for ethanol feedstock (sugarcane) production. The Sugar Regulatory Administration (SRA) has identified a total of 377,182 hectares of land suitable for planting sugar, more than enough to supply the feedstock requirement for a 10% blend and without affecting current sugarcane for sugar production. SRA likewise said that 17.2 percent of these are in Luzon, 53.3 percent in Negros Island, 6.9 percent in Panay Island, 4.4 percent in the Eastern Visayas region, and 19.1 percent in Mindanao.
More than availability, the land is also suitable for growing not just sugarcane but a wide variety of other crops that can be used as feedstock, namely: corn, cassava, and sweet sorghum.
Another reason is that the ethanol industry supports the national interests as well as addresses certain global issues. For instance, the use of ethanol-blended fuel in vehicles and industries can reduce the volume of air pollution and address the concern over global warming. It does not only comply with the Biofuels Act of 2006 but also complies with the Philippine Clean Air Act.
In terms of national interests, the Philippine ethanol industry can pave the way for energy security initiatives that can wean the market away from its high dependence on imported oil and fossil fuel. The Philippines currently imports 118.4 million barrels of oil (based on 2008 annual figures) and with the bioethanol mandate in place, it is expected that there will be about PhP 7.8 billion in forex savings from just a 10% blend. Aside from the forex savings, the industry provides a buffer from the fluctuations and volatility of oil prices in the global market.
The ethanol industry also contributes to sustainable development particularly in the countryside. This is due to the inflow of new investments and new job opportunities. Additionally, it can also contribute to the increase of income for local farmers as well as encourage more economic activities. The Department of Agriculture (DA) estimates that the lives of about 55,000 workers in the sugarcane industry will improve with the development of the ethanol industry in the country.
We will be featuring more detailed discussions of each of these reasons in the next few weeks. Stay tuned.
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0 a.m. about 30 points,