The Philippines government has postponed its planned increase in the country’s biodiesel blend amid the high cost of coconut oil and the expected “significant impact” on petroleum product prices, the Business Enquirer reported.
In an advisory dated 17 July, the Department of Energy (DOE) informed all downstream oil industry players, biodiesel producers and stakeholders on the delayed introduction of the new biodiesel blending mandates planned for this year and next, of 4% (B4) and 5% (B5) respectively.
The move followed a proposal by the National Biofuels Board to delay the implementation of the new blend due to the rising costs of coconut oil, the main feedstock for coco methyl ester (CME), the 23 July report said.
“The decision was made because of the prevailing high cost of coconut oil which is the principal feedstock for our coco methyl ester, the biodiesel component in the diesel being sold in the Philippines,” Energy undersecretary Alessandro Sales said.
In June, Sales said the price of coconut oil globally had increased from about US$1,100/tonne at the beginning of 2024 to just below US$3,000/tonne.
Although prices had dropped a little since then, Sales told reporters: “It is a significant increase and … translates to higher cost of diesel at the pump (level) because of the mandate. Increasing the mandate now to B4 would add to this price pressure.”
Chemrez Technologies president Dean Lao Jr said although the industry was willing to meet the requirements for the increased CME blend in the future, the sector would need to prepare months in advance to ensure ample supply.
“The industry awaits a more definite date for the resumption of the B4 mandate from the NBB. It needs at least five months in advance to prepare for implementation,” Lao was quoted as saying.
Sales said the board would review if the blending mandates should be introduced in the future, with implementation dependent on feedstock availability.
The Philippines’ Biofuels Act of 2006 mandates blending regular fuels for cars and engines with locally produced biofuels to promote the country’s produce and address pollution and other environmental concerns.
The CME blend in diesel was raised from 2% to 3% on 1 October 2024.
