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Special
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Written by Sabrina Deparine
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Monday, 19 July 2010 10:42 |
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Page views: 1100 |
Just a few weeks ago, Zenaida Monsada, Director for Oil Industry Management Bureau of the Department of Energy, has called the attention of the Congress to review the Biofuels Act of 2007. According to her statement, next year’s ethanol production will not be enough to address the local demand and as such, suggests that the Congress should amend the law to import more ethanol from other countries.
 The Ethanol Producer’s Association of the Philippines (EPAP) thought otherwise. In a statement released last week, EPAP stressed that there is nothing wrong with the provisions included in the Biofuels Act of 2007 so there is no need to make any amendments. Instead of calling the Congress’ attention to evaluate the law, EPAP says that the Philippine government should ensure the proper implementation of the provisions of the Biofuels Act of 2007.
EPAP’s recommendation is right and more agreeable. Heeding Monsada’s advice to amend the law will only result to the lifting of restrictions on importing ethanol. This will definitely not be helpful to local ethanol producers. For one, there will be no protection for local ethanol producers since oil companies can now opt to buy imported ethanol. Investors in the industry may have a hard time recovering billion of investments.
Aside from the concern for local ethanol producers, amending the Biofuels Act of 2007 will defeat the purpose of rolling out biofuels in the Philippine market. One of the main goals of the Biofuels Act was to wean the country’s dependence on petroleum products. If the importing restrictions on ethanol will be lifted then it seems that the country only shifts its dependence from imported oil to imported ethanol. This will hardly allow any savings.
Looking through the provisions of the Biofuels Act, one can say that these are already sufficient to support the local industry. What is lacking is the efficient, consistent and transparent implementation of the provisions. DOE should push through with the mandate on blending requirements so that local producers and interested investors will be enticed to build more plants and produce more volumes of ethanol. This will not only help the economy but will also help increase the investments and bring in more foreign capital into the local ethanol industry.
EPAP advises Monsada to submit the names of companies that failed to comply with the Biofuels Act to DOE Secretary Rene Almendras. This will inform the department on the current state of supply and distribution of ethanol in the market and from this, DOE will be able to plan their next steps.
It is quite early to judge how the Philippine ethanol industry will fare in the coming years. For one, it is still in its infantile stage and with stronger support, it will definitely grow and develop even more.
With the complete rollout of biofuels in the Philippines by next year, the Philippine Energy Plan estimates the demand for ethanol to be at 416 million liters. This is twice that of this year’s demand which is at 219 million liters. To date, total production from local producers is only 77 million liters which only addresses 35% of the total demand.
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