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Prospects for the Philippines' Fuel Ethanol Industry
Technical Pool
The Philippines has a wide pool of manpower available for the ethanol industry. The country produces 400,000 college graduates each year. Approximately 10 percent are engineering graduates, many of whom end up as construction or operations engineers in the Middle East and elsewhere. In addition, the country also produces agriculturists, microbiologists and chemists.
Furthermore, there are many technical personnel experienced in alcohol production because of the country's large number of distilleries. The Philippines has a robust alcohol industry, and one of the country's top corporations made its fortune in alcohol. In addition, a number of public institutions, such as the National Institute of Molecular Biology and Biotechnology, and the National Science Research Institute, maintain collections of yeasts and have new strains to optimize ethanol yields. A number of private and public institutions continue to develop technologies and manpower in support of the alcohol industry.
Incentives and Government Support
The Philippines' Board of Investments grants the fiscal and non-fiscal incentives to priority projects, such as those in biofuels. The law granted additional incentives to biofuels investors in addition to the existing investment incentives.
In addition to incentives, the Philippine government, through the Department of Agriculture, plans to provide additional support to biofuel producers and farmers, including PhP3.4 billion (US$73 million) over the next five years. The money will go into nursery development, crop protection, irrigation, training, information programs, information technology development, farm-to-market roads construction, market development, research and development, and general support for the program. The research and development program aims to continue the development of high-yielding varieties of sugarcane, test new crops and cellulosic ethanol production, improve quality assurance, and distillery waste and effluents management, and other projects to ensure the sustainability of the industry.
Conclusion
A number of factors are converging to make the Philippines an excellent biofuels investment site. Aside from providing a number of incentives for investors to put up distilleries, the government also plans to develop more infrastructure and support research and development to improve feedstock handling and productivity. Also, it has a large pool of technical manpower that can be tapped by the fuel ethanol industry. Finally, by mandating the blending of ethanol into all gasoline sold nationwide and imposing heavy penalties on oil companies that do not sell fuel with the minimum blend, the law assures investors of a large local market for ethanol.
Strong government support, a good technical base and a law on biofuels make the Philippines an ideal ethanol investment location.
2nd Gen Biofuel Technology now ready for use
Danish industry leaders say that the technology created to extract ethanol from non-edible sources has already moved beyond the research phase and is now ready for large-scale rollout in the biofuels industry. By far, the only thing that is hampering it from large-scale applications is the lack of support and incentives from policymakers.Special Written by Sabrina Deparine Monday, 18 October 2010
The term second-generation biofuel refers to alternative fuel made from ethanol that comes from plant wastes. These plant wastes include sugarcane bagasse, straw, and corn cobs. Second-generation biofuel is different from first-generation biofuel because the latter is made from edible crops like sugarcane and corn.
At the moment, production of second-generation biofuel is still considered to be in its infancy stage not because of the technology behind it but because policymakers are
still unable to formulate the right regulatory framework to support it. In Europe, for instance, Novozymes Head, Steen Riisgaard is pleading the government to create a suitable framework for the policies and incentives concerning the manufacture of second-generation biofuel. According to him, all technologies are now ready for deployment but they could not make use of it because the government does not have any policies to guide the operations.
One of the recent studies conducted showed that the European Union has the capacity to replace as much as 62% of its annual gasoline consumption with second-generation biofuels in ten years time.
The call to create suitable policies governing the production of second-generation biofuels is very timely as it coincides with the announcement that the United States Environmental Protection Agency will clear the way to raise the limit of ethanol on gasoline from 10% to 15% for new vehicles.
US can now sell E-15Feature Written by Sabrina Deparine Monday, 18 October 2010
Last October 13, the United States Environmental Agency (EPA) has released a statement, allowing all gas stations in the country to mix higher volumes of ethanol on the gasoline that they sell. From a 10% ethanol volume, gas stations can now sell E-15 gasoline which, as the nomenclature implies, has 15% ethanol. However, they can only sell this to those with vehicle models 2007 and above.
According to Lisa Jackson, EPA Administrator, the agency came up with this decision after the Department of Energy has concluded that a 15% ethanol gasoline mixture has better longevity and lower greenhouse gas emissions. Tests also show that the E-15 does not have any negative impact on the cars emission control equipment.
The rollout of E-15 in the U.S. market can contribute to the countrys efforts to meet its emission reduction targets as well as wean its dependence on petroleum products.
EPA is also currently proposing measures that will help motorists and car owners identify which type of fuel would be appropriate for their vehicle. Gasoline stations and retailers, on the other hand, will be surveyed and inspected quarterly to make sure that their gas pumps are properly labeled. EPA is still in close coordination with the DOE. They are now testing the feasibility of using E-15 on car models ranging from 2001 to 2006. Results are expected to be released in November.
G.E., Petrobas collaborate on Ethanol power plantSpecial Written by Sabrina Deparine
Monday, 11 October 2010
If you think ethanol is just for motor vehicles, think again. It can also be used to fuel power plants.
General Electric (G.E.) has recently notched a deal with leading Brazilian energy company, Petrobras to transform the latters simple-cycle natural gas plant to a sugarcane ethanol-based facility.
The said power plant currently has an output capacity of 87 megawatts and is serving the city of Juiz de Fora in Rio de Janeiro. Petrobras thought of collaborating with G.E. because the plant already includes equipment from this manufacturer. For instance, the plant has two units of G.E. LM6000 PC gas turbines installed.
According to the agreement signed by both parties, G.E. will be installing one of the two turbines with their modified combustors so that it will allow the use of either ethanol fuel or natural gas. The other gas turbine, on the other hand, will be restructured to consume ethanol. Hopefully, this will also be able to generate electricity on a commercial scale.
Prior to this project, Petrobras had conducted a 1,000-hour test and commercialization on the plants first unit last May. The demonstration, which lasted for about five months, showed that a power plant can run on both hydrous and anhydrous ethanol without any significant changes in performance, power and efficiency. The performance of an ethanol-based plant is the same as those running on natural gas. An ethanol-based power plant is even better as it cuts down the levels of oxide water usage from nitrogen oxide. It also reduces the aldehyde emissions.
The project involving the second unit is a clear indication of the companys initiative to try out different sources for power generation. Petrobras believes that this will promote greater flexibility among power plants all over the world.
In addition, the capability to utilize both ethanol and natural gas for its operations can contribute significantly to the improvement of the plants sustainability. It gives the plant an alternative fuel source.
If plans push through, the Juiz de Fora plant will be the first power-generating facility to run on ethanol fuel. It will bring new light to ethanol since the substance has never been used before in any electricity-generating operations.
Both G.E. and Petrobras ensures that this new type of ethanol-based power plant will not produce high volumes of emissions. Although emissions are inevitable from power plants, this new plant will definitely not go beyond the limit.
Ethanol complex to rise in Central ColombiaSpecial Written by Sabrina Deparine
Colombian renewable energy firm, to build an industrial complex that includes a production plant for bioethanol. The said plant will be utilizing sugarcane feedstock and has a processing capacity of 2.1 million tons of sugarcane per year. The contract likewise includes a 40-megawatt cogeneration plant that will utilize the bagasse or sugarcane waste for milling, distillation and production of vinasse.
The industrial complex will be located on the Meta Department of Colombia, an area usually used for cattle ranches and is now converted for agricultural purposes. Current plantation includes that of sugarcane.
The contract between Bioenergy and Isolux Corsan is worth USD 140 million and will start with the engineering works as soon as possible. Isolux Corsan was awarded the contract based on a tender process. By far, this is the first biofuel project for the company outside of Europe.
According to reliable sources, Colombia has very good potential to become a major exporter of ethanol in the global market. In a report conducted and submitted by the United States Department of Agriculture, it was stated that Colombias sugarcane ethanol industry is one of the most developed in the region. Given the right expansion projects, Colombia has the capacity to increase its daily ethanol production from 277,000 gallons in 2007 to as much as 1 million gallons in 2010. However, the U.S. Department of Agriculture thinks that Colombia is unlikely to export ethanol since current local production is not enough to meet the national demand.
Waste to Ethanol plants to rise in the USSpecial Written by Sabrina Deparine Monday, 27 September 2010
TMO Renewables Limited has recently signed a 20-year contract with Maryland-based Fiberight LLC. The said contract involves the construction of waste-to-ethanol plants in the United States in which both companies will be integrating their respective proprietary technologies. As the name implies, the plants will focus on converting solid and associated cellulosic wastes to ethanol. If estimations are correct, this will earn TMO and Fiberight around USD 25 million per annum during the term of the contract.
According to contract provisions, TMO is expected to build a total of 15 waste-to-ethanol plant in the next five years. Apart from the annual revenues, the company will also receive an initial, one-off design fee for each of the 15 plants.
TMO will begin construction of the first plant by next year. To date, five sites have already been identified for construction. Fiberight, for its part, has also agreed to commission some of the plants across the country every year.
Each waste-to-ethanol plant will combine the technologies from TMO and Fiberight. Fiberight utilizes fractionation and digestion techniques to sort non-recyclable municipal solid wastes and other associated cellulosic wastes for conversion to clean fibver stream. This clean fiber stream will then be fed directly to TMOs technology. This process can recover more than 80% of residential waste and convert them to biofuel without any requirement for external water and energy inputs. TMOs technology, on the other hand, uses a specialty bio-organism known as thermophilic microorganism to convert biomass to ethanol. The combined efforts from TMO and Fiberight is expected to give the waste-to-ethanol plants an edge in terms of ethanol producing technologies since this will allow their process to become more efficient and to produce less water emissions discharge.
TMO and Fiberight are now pilot testing the process in a demonstration facility in Britain. TMO has produced over 90 gallons per ton of ethanol from municipal waste coming from Fiberight. Fiberight receives revenues from 5 million gallons of ethanol produced from the demo plant in addition to tipping fees that they get from using municipal and commercial wastes.
Right now, half of the municipal waste feedstock is consumed for ethanol production while the remaining half is sold as recoverable plastic and metal materials.
Petrobas, KL Energy: Partners in Ethanol ProductionSpecial Written by Sabrina Deparine Tuesday, 31 September 2010
The Petrobras Group, national oil company in Brazil, has recently closed a deal with KL Energy Corporation, a U.S.-based biofuel company.
The said joint development agreement states that the two companies will collaborate on producing biofuels from sugarcane bagasse. This process will utilize KL Energys cellulosic ethanol technology. It covers a period of 18 months.
Petrobras will be represented by its U.S. subsidiary, Petrobras America Inc. The company will provide an estimated USD 11 million to optimize KL Energys demonstration facility in Wyoming. This demo facility was built in 2008 and currently utilizes ponderosa pine feedstock to produce ethanol. However, it can be modified to use other feedstock such as sugarcane bagasse. The main technology to be used for production is KL Energys proprietary technology called thermal-mechanical pre-treatment process. This breaks down the non-food wood and other herbaceous feedstock into components like cellulose, hemicelluloses and lignin.
Petrobras will still evaluate the optimized ethanol process. Test procedures will be conducted by manufacturing cellulosic ethanol and biolignin from bagasse using multiple process alterations. Once the process is proven successful and they are able to establish which process variation can optimize the feedstock and yield, Petrobras will submit it for licensing.
Petrobras and KL Energy will also join hands in building an industrial-scale cellulosic ethanol plant using bagasse feedstock. This plant will be integrated into the Petrobras sugarcane mill in Brazil. It is targeted to commence its operations by 2013.
RP, DOE to allow temporary ethanol importsSpecial Written by Sabrina Deparine Monday, 02 August 2010
The Philippines Department of Energy (DOE) might just heed the advice. Early last week, the DOE laid down its plan to allow the temporary importation of ethanol to address the demand for the 10% ethanol blend requirement of the Biofuels Act for next year.
Speaking before the delegates of the 28th Asean Ministers of Energy Meeting in Vietnam, DOE Secretary Jose Rene Almendras admitted that they currently do not have other options but to consider importing ethanol. Indeed, this is a sad reality. The Biofuels Act has been passed and implemented a few years ago and yet the local ethanol industry was unable to attract investors to help expand it. In addition, the initial rollout of 5% ethanol blend in the Philippine market was met with much criticism. These did not give the local ethanol industry a chance to grow bigger and stronger. Now, with the mandate to increase the blend to 10%, local industries do not have sufficient means to support the demand.
To address this problem, the DOE is considering a temporary importation scheme which will ensure enough supply of ethanol while waiting for the local industry to become stable. Almendras hastened to add that this temporary scheme will not change the governments goal to achieve independence from petroleum products.
Almendras assures the Filipinos that they just need time to further develop the local ethanol industry. As a matter of fact, the government will be offering incentives to feedstock farmers as well as intensify the infrastructures needed for the development.
Based on a report from the Ethanol Producers Association of the Philippines, only 80 million liters of local ethanol is expected to be produced next year. This is only about 30% of the total demand estimate of 240 million liters.
Petron seeks more EthanolFeature Written by Sabrina Deparine Monday, 31 July 2010
one of the major oil companies in the Philippines, is scouting for more ethanol.
According to Petron Chairman and CEO Ramon Ang, 60% of their ethanol requirement for the current 5% blend comes from imported ethanol. With the coming mandate for 2011 which requires 10% ethanol blend, Ang is concerned that local ethanol producers may not be able to address the demand. In this case, oil companies have no choice but to import ethanol from other countries, affecting the pump prices negatively. To help address this concern, Petron is considering off-take agreements to help augment the supply from local producers.
The Biofuels Act of 2008 was expected to encourage more investments for the local biofuel industry. However, current supply volume is still not enough for the demand. Petrons decision to pursue off-take agreements is an indication of their support for the local biofuel industry. In addition, Ang also said that this measure can help Filipinos by creating more jobs in rural areas and helping the country ease its dependence on imported oil.
For this year, statistics show that Philippine ethanol producers can only provide 38% of the total demand for ethanol.
Ethanol plant all set to begin operationsSpecial Written by Sabrina Deparine Tuesday, 08 June 2010
A new bioethanol plant in Negros Occidental is expected to begin its operations this month.
In a press release from Roxol Bioenergy Corp., Chairman Pedro Roxas said that they have already started the inspections and all other preparations last April. The company has likewise coordinated with the other members of the Ethanol Producers Association of the Philippines (EPAP) and the Department of Energy (DOE) regarding price mechanisms that are agreeable to all parties involved.
Roxols ethanol plant is located in La Carlota, Negros Occidental. It will be the first major distillery in the country that uses molasses as feedstock for ethanol production. The feedstock will come from the depots of Roxas Holdings, Inc. which is one of the major sugar producers in the country.
U.S to use novel yeast to improve ethanol productionSpecial Written by Sabrina Deparine Friday, 07 May 2010
Two American companies, Verdezyne Inc. and Lallemand Ethanol Technology, are working together to develop a new specie of genetically-enhanced yeast that can help produce higher volumes of ethanol.
Verdezyne Inc. will research on and conduct various metabolic engineering processes to enhance the industrial yeast strain produced by Lallemand. It will also receive the patent license fees as well as royalty payments for the project. Lallemand, on the other hand, will facilitate the process development, manufacturing and global commercialization of this new novel yeast. Both companies are expecting this new yeast to help produce higher volumes of ethanol per unit of glucose compared to existing yeast strains.
Basically, yeasts possess the natural ability to convert sugar to ethanol. In fact, biotechnology companies utilize yeast to produce ethanol fuel.
In general, the chemical process starts with the milling of feedstock such as sugarcane or corn. Fungal alpha amylase enzymes or diluted sulfuric acid is then added to this to break down the starches to sugar compounds. To further reduce these complex sugar compounds to simple sugars, glucose amylase is added. The resulting simple sugars are then converted to ethanol after the yeast has been added. This ethanol solution is then distilled to improve its concentration to up to 96%.
The development of the new yeast may also contribute to the production of cellulosic ethanol fuel from cheaper feedstock. This means that this new development can also help in making biofuels more affordable than regular gasoline.
Brazils Ethanol Producers Want to Scrap TariffsSpecial Written by Sabrina Deparine Monday, 15 April 2010
In the Philippines, ethanol enthusiasts and support groups are vying to increase the tariffs on imported ethanol. However, the exact opposite is now happening in Brazil.
The major producers of sugar and ethanol in Brazil are now urging the government to scrap the ethanol import tariff as soon as possible. According to them, this is for the benefit of Brazil.
Marcos Jank, President and CEO of the Brazilian Sugarcane Industry Association or Unica, said that the eradication of tariffs will eliminate the barriers and allow Brazil to pursue similar measures from countries that keep their markets heavily-protected.
The foreign trade chamber has earlier set aside a decision to remove the current 20% import duty on ethanol in Brazil. Unica says that removing this import duty will be strategically beneficial for the country. The current Brazilian tariff never discouraged imports but it is often criticized and cited as one of the culprits in opening up the global ethanol market.
The proposal to remove the 20% Brazilian tariff was submitted last October 2009 but the matter is still under discussion until now. This will be an important contributing factor to open new market, expand the use of ethanol as an alternative fuel and eventually transform this top a global commodity.
Unica recommends that the Brazilian foreign trade agency should make the announcement on removing the tariffs as soon as possible even if the implementation will not start yet in order to jumpstart or signal the opening of a more free global market.
Orange Peels Can Now be Converted to EthanolSpecial Written by Sabrina Deparine Monday, 08 March 2010
A research team from the University of Central Florida has recently made a breakthrough discovery: using tobacco to produce enzyme that can convert orange peels to alternative fuel.
The study was funded by the United States Department of Agriculture. Early as now, the team, headed by Professor Henry Daniell, is claiming that the method they had discovered is more environment-friendly than any of the current methods to produce ethanol. This is because they made use of plant-derived enzymes to break down the components of orange peels which are waste materials.
The process involves breaking down the orange peels into sugar compounds. The sugar is then fermented to ethanol. The same process can be used on other non-edible materials like straw, sugarcane and switchgrass.
Basically, the team identified the genes present in wood-rotting fungi or bacteria which produce the necessary enzymes to break down the waste materials. The team then isolated these genes and cloned them. They were then deposited on tobacco plants for cultivation. The tobacco plant has been selected for this study because it has the ideal facilitator and system to produce the enzyme. It is also non-edible. Every year, an estimated 40 metric tons of biomass are produced per acre of tobacco plants. In addition, using tobacco plants for enzyme production instead of for smoking is a more attractive alternative.
Tobacco-produced enzymes also offer higher probability of decreasing production cost which, in turn, also decreases the cost of ethanol production. This new method also consumes waste materials that are abundant so there is no need to reduce food supply. According to Prof. Daniell, in Florida alone, there are enough throwaway orange peels to generate 200 million gallons of ethanol annually.
Hopefully, the cheaper but greener method can boost the popularity of biofuel. To date, team are still working on further developments that can make it more viable on commercial scale.
Gas Turbines Can Also Run on Ethanol
SpecialWritten by Sabrina Deparine Monday, 08 February 2010 Brazil, one of the biggest ethanol exporters in the world, never runs out of ideas and usages for ethanol. Just recently, Brazilian energy company, Petrobras, and G.E. have experimented by using sugarcane-based ethanol to replace gas in running a turbine system. The said experiment was conducted in a plant that uses turbine to produce electricity in full commercial scale. 
The use of ethanol as fuel for turbine systems at the Juiz de Fora power plant is the first-ever use of sugarcane ethanol on an industrial scale; thus, it is another feather added to Brazils cap. The Juiz de Fora power plant is a natural gas plant that has an output capacity of 87 megawatts. It is fully-equipped with two G.E. gas turbines. One of the combustors was altered by G.E. to make it a dual-fuel system so it can run on ethanol. Technically, the dual-fuel system has enhanced the energy security and reliability of the plant as it adds options to possible fuel source.
The experiment period for using ethanol as an alternative fuel for the gas turbines is not yet through. It will run for the next five months to validate its effects and efficiency. So far, the outcome is satisfactory but the company is keeping tab on the emissions to ensure that these are within the acceptable range.
RP Might Import 150M Liters of Ethanol for 2010Feature Written by Sabrina Deparine
Tuesday, 26 January 2010
17:16 Page views: 11With the mandate to produce petroleum products with 5% ethanol blend, the National Biofuels Board (NBB) estimates that the Philippines would require 219 million liters of ethanol for 2010. However, local producers cannot supply all of these yet so the Philippine government has no other choice but to import ethanol from other countries like Brazil.
For 2010, the country may have to import as much as 150 million liters of ethanol, mostly from Brazil. This is in spite of projections that local production capacity may double up to 78 million liters as compared to last year. This is still quite far from the 219-million liter ethanol demand.
However, local producers do not have to worry about the competition with imported ethanol. According to Rafael Coscolluela, NBB Vice Chairperson, the estimated 150 million liters of ethanol to be imported is not yet final. This may change depending on local production and availability. NBB actually advises oil companies on the volume of ethanol that they can import to ensure that all domestic output is consumed. The exact volume of ethanol to be imported will be finalized by next week.
For 2009, NBB allowed oil companies to import 184 million liters of ethanol to address the demand of 208 million liters. Although the estimated volume of imported ethanol is lower this year than last year, Coscolluela is still apprehensive about the estimates because local ethanol producers are having difficulties in sourcing out sugarcane for feedstock due to the rising prices of sugar.
Most of us are probably aware that some sectors or retailers are pinpointing to the biofuels industry as the main culprit in the shortage of supply in sugar in the country, citing that sugarcanes are now being used as feedstock instead of processing it to sugar products. However, this report goes to show that the biofuel industry does not have anything to do with the shortage in sugar supply. In fact, local producers are also having a hard time getting enough sugarcane supply. Also, the shortage in sugar supply is not doing the biofuel industry any good as it prompts the government to import more volumes of ethanol from other countries which, in turn, contributes to higher pump prices for ethanol-blended gasoline.
2009 Recap: Biofuels Reduce Worldwide Greenhouse Gas Emissions by 57%
Special Written by Sabrina Deparine
Tuesday, 15 December 2009 09:58
Page views: 79
As the year comes to an end, radio stations and news teams are scampering around to gather the milestones for 2009. Here at BiofuelsHub, we are also doing the same. For 2009, weve got some great news for you.
The joint effort of countries around the globe to promote the use of biofuels has paid off. In a new report conducted by S&T Consultants Inc., an internationally-recognized energy and environmental consulting firm, it was revealed that the use of biofuels was able to reduce the worldwide greenhouse gas emissions by more than 50% this year.
The report indicates that biofuel production had reduced the global greenhouse gas emissions by as much as 123.5 million tons. This represents an average reduction of 57% based on the estimated emissions that would have occurred from the production and use of equal volumes of petroleum products.
In addition, it was estimated that for 2009, world ethanol production of 73.7 billion liters was able to reduce greenhouse gas emissions by 87.6 million tons. In terms of biodiesel, the worldwide production of 16.4 billion liters was able to cut down greenhouse gas emission by 35.9 million tons.
According to Bliss Baker of the Global Renewable Fuels Alliance, this goes to show that biofuel production and use indeed plays a crucial role in reducing harmful emission across the globe. As such, biofuels should be at the forefront of the fight against climate change.
We do hope that these figures would encourage more Filipinos to patronize biofuels. After all, this is the least that we can do to contribute to the reduction of emissions and to the fight against climate change.
NEW DISTILLERIES TO SECURE THE FUTURE OF RP BIOETHANOL INDUSTRY
Written by Sabrina Deparine
Tuesday, 08 December 2009 12:05
Page views: 43
Amidst all the recent talks on fuel shortage, it is good to know that new bioethanol distilleries will soon rise here in the Philippines. This is a clear sign that the country can very well ease its dependence on imported oil if only we have sufficient supply of ethanol to produce enough biofuel for national demand.
There are at least four distilleries in the pipeline as of November this year.
Roxol Bioenergy will start works on a bioethanol plant located in La Carlota City in Negros Occidental by the first quarter of next year. The target annual capacity for this is 30 million liters.
Cavite Biofuels Producers Inc. (CBPI) will go full blast in completing and starting operations in their bioethanol facility in Magallanes, Cavite. Target completion date will be 2011. The CBPI plant aims to generate 38 million liters of bioethanol, boosting the local production to 107 million liters.
Two other bioethanol projects are expected to push through between 2010 and 2012. The combined target capacity for these is about 100 million liters per year. The Green Futures Innovation distillery will be constructed in San Mariano, Isabela. It will have a capacity 54 million liters per annum. The other project is spearheaded by the Northern Mindanao Biofuels Corp. which will build their plant in Cagayan de Oro. It has a target capacity of 40 million liters.
Summing it up, the new distilleries will contribute additional 164 million liters to the current 39 million liters of bioethanol being produced by Leyte Agri Corp in Ormoc City and San Carlos Bioenergy in San Carlos, Negros Occidental.
Leyte Agri is currently producing 9 million liters while San Carlos produces 30 million liters. Leyte Agris Ormoc plant is the first bioethanol plant in the country, having started its operations mid-2008. It is followed by San Carlos which started operations March 2009. The San Carlos bioethanol plant exclusively supplies to Petron while Leyte Agri supplies to Shell, Chevron and other smaller players in the petroleum industry.
In spite of the total volume of 209 million liters of bioethanol produced by existing and planned distilleries per year, the production is still far behind the 461 million liters required by the country to comply with the Biofuels Law of 2006. According to the law, a 10-percent bioethanol blend across all types of gasoline should be sold in the Philippine market by 2011.
In order to reach the target of 461 million liters, around 14 distilleries are still needed, each having a target capacity of 30 million liters. To date, the country is lagging behind targets so the construction of new plants should already start by early 2010.
Other prospective bioethanol distilleries may rise in various locations like Tarlac, Bukidnon, Zamboanga del Norte, Misamis Oriental and Pangasinan. These distilleries will be utilizing sugarcane feedstock. Other distilleries will use molasses and may be constructed in areas like Negros Occidental and Bataan. Some distilleries opt for the use of cassava feedstock and will soon rise in areas like Zambales, Saranggani, Misamis Oriental and Sultan Kudarat.
Source: biofuelshub.com
FINANCING FOR BIOETHANOL PROJECTS
Written by Sabrina Deparine
Tuesday, 08 December 2009 12:00
The Philippines is obviously lagging behind in bioethanol production. Local production will not be able to supply all the requirements of the mandatory 10-percent biofuel blend that will take effect by 2011.
According to the Department of Energy, forecasts for 2011 say that the Philippines will be needing 460 million liters of ethanol in order to meet the demand. Assistant Secretary and Concurrent Director of the Renewable Energy Management Bureau Mario Marasigan confirmed that the country indeed lacks supply of ethanol to comply with the law. But in spite of this, the National Biofuels Board is not considering any reduction in the mandate because it is confident that the supply needs will eventually be met.
Frankly, the NBB is correct in its assumption that the ethanol supply needs of the country will be met. The lack of local ethanol supply is a temporary problem because the Philippine government can very well help in boosting ethanol production. For instance, there are a total of 19 ethanol-related projects in the pipeline but only four of these are in advanced stages and will be operational in the next four years. . The other projects are still in early stages, mostly focused on raising financing, which is the biggest challenge for any ethanol project. Feedstock, whether non-edible or edible, is not a problem since the Philippines is rich in agricultural resources. In a study conducted by the U.S. Agency for International Development (USAID), it was cited that the country has sufficient feedstock capacity to produce more than 1 billion liters of ethanol. This is much more than the required volume of 460 million liters for 2011.
While there is a long list of interested local and foreign investors, mostare very cautious to invest their money due to the perceived lack of firm and established policy support from the government. The construction and operation of a bioethanol plant is very challenging and expensive, costing on average about P3.5 billion to complete. Since previous policies called for lenient duty on imported ethanol, this, has made the competition a bit unfair for local producers. Imported ethanol currently has a duty of 1%, down from the original level of 10%.
It is good to hear that there are new incentives now in place to promote the bioethanol industry to investors. These incentives are: for include zero specific tax on locally produced bioethanol; VAT exemption; exemption from charges on wastewater effluents; financial assistance from government institutions; and pioneering status under the Board of Investements Investment Priorities Plan. There are also other additional benefits like duty-free important of machinery, equipment and materials during the first 10 years; seven-year tax holiday; corporate tax rates of 10 percent on net taxable income after the seven-year tax holiday; cash incentive of 50 percent of the universal charge for power needed to service missionary areas; net operating loss carry-over during the first three years of commercial operation deductible from gross income for the next seven years of operation; and special realty tax rates of not more than 1.5 percent on equipment and machinery, civil works and other improvements. Furthermore, there is a move to bring back the duty on imported ethanol to at least its original level of 10% if not increase it even further to 20%.
BiofuelsHub commends the government for these incentives. We know that the Philippine government does not have sufficient capital to help private entities construct and operate their bioethanol plants but the DOE can put its executive power into action so they can stimulate the market as well as attract foreign investors .
Source: Biofuelshub.com
THE AFTERMATH OF EXECUTIVE ORDER 839
Feature
Written by Sabrina Deparine
Monday, 16
November 2009 10:11
Page views: 111
In recent weeks, the Philippine oil industry as well as Filipino motorists went through what might have been described as a rollercoaster of emotions. As an aftermath of two calamities brought about by typhoons Ondoy and Pepeng, the government devised and implemented Executive Order 839 (EO 839).
EO 839: A Brief Overview
Executive Order 839 is an oil price freeze order that prevented oil companies from increasing their gas pump prices in Luzon and instead, maintained these at
October 15 levels. This move is supposedly an affirmation of the companies corporate social responsibility. Since it was an Executive Order, oil companies had no other choice but to follow even if the government had earlier said that compliance to EO 839 will be voluntary. According to Secretary Eduardo Ermita, EO 839 authorizes both Justice and Energy Departments to file charges
against stubborn oil firms which fail to comply with the order.
When this news first broke out, Shell Philippines Country Chairman Edgar Chua was already quoted by the Philippine daily Inquirer as saying that oil companies do not have any other option but to cut down their prices in the Luzon area back to their October 15 rates. While on the surface this seems like welcome news to Filipinos, EO 839 has had some serious implications both to investments and to the supply of petroleum products in the country.
The Impacts
All oil companies have warned the government of possible supply shortage since they had to cancel their oil imports which were purchased at higher prices. Last week saw this prediction coming true. Last Tuesday, reports of fuel shortages in three provinces started pouring in..
Gasoline stations from Lucena City in the Quezon Province to Albay in Bicol reportedly started to put up signs saying Out of Stock on their gas pumps. Even Batangas, where several oil companies have put up and maintain their depots, was not spared. Gas stations in the area are closing shop at around 10 p.m. to save up on their supply instead of going on their usual 20 to 24-hour operations.
Motorists were not the only ones affected by this fuel shortage. Farmers, who also rely on diesel to power their farm equipment, were also affected since they could not harvest their crops without the aid of these machineries.
Additionally, both businesspeople and employees in the oil industry also felt the unfavorable impact. Cutting down the prices affected the revenues of gasoline stations and oil companies and since they had to close shops due to
lack of supply, the salaries of gas station employees were also adjusted to cover shorter working hours. Hence, they also complained of not having enough income to take home to their families.
Government to Lift EO 839 on Monday
After giving much defense and conviction to continue implementing EO 839, the Philippine government has finally consented to lift this order on Monday,November 16.
ANCs Business Nightly ran some interviews with oil company officials last Friday who were asked about their plans as soon as the executive order was lifted. Ernst Wanten, President and Managing Director of Total Philippines, said that oil prices might increase by as much as PHP 5.00 per liter but they have committed to implement the increase on staggered basis.
Frankly, a lot of local and foreign investors had criticized EO 839 from the start but the government insisted that this was needed since the country, particularly Luzon, was declared under a state of calamity. As such, a price cap should be implemented on basic commodities including oil. Im sure a lot of Filipino motorists were also happy when the announcement on EO 839 was first made since this meant they could save on gas prices. However, based on the impacts that we have seen and experienced, was EO 839 really worth it? Was it helpful to the Filipinos, considering the fuel shortage experience that we had
last week? I personally dont think it was very helpful especially since we still have to shoulder huge price increases in the near future. We may have been able to save up on gas prices the past few weeks but with the impending increases, it seems that we would still end up spending the few pesos we saved
on fuel in the next few days.
Source: Biofuelshub.com
Ethanols Future Looks Bright in the PhilippinesWritten by Sabrina Deparine
Monday, 12 October 2009
The future of ethanol in the Philippines looks bright after all in spite of the various bad publicities that the E10 gasoline has been receiving in the past few weeks.
Based on the forecasts made by the Ethanol Producers Association of the Philippines (EPAP), the local ethanol supply is expected to reach as much as 83 million liters by 2010. This figure is more than 50% higher than the government estimate of only 50 million liters.
According to EPAP Director Tetchi Capellan, the supply is expected to come from local ethanol producers like San Carlos Bioenergy Inc. which can produce 40 million liters per year; Leyte Agri Corp. which manufactures 10 million liters per year; and Roxol Bioenergy which has a capacity to produce 33 million liters per year. Another producer, Cavite Biofuel Producers, Inc is expected to start commercial operations by 2011.
EPAP’s move to clarify the estimated ethanol supply for 2010 is commendable. It is important to make the right forecast on the supply of ethanol for next year because this will form the basis for the volume of imports that the National Biofuels Board (NBB) will permit in order to comply withthe mandate of the Biofuels Act of 2006. This, in an indirect way, gives protection to local ethanol producers.
By 2010, the Philippine market will still be offering 10% ethanol-blended gasoline (E10)alongside regular gasoline. Initial estimate of the country’s requirement for 2010 is at around 219 million liters. Following the estimate given by EPAP, the NBB should only allow an import volume of at most 147 million liters of ethanol. However, if the NBB follows the estimate given by the government, they will allow an import volume of as much as 180 million liters, to the detriment of locally produced ethanol, especially since oil companies may prefer to purchase imported ethanol rather than local ethanol if the price difference is insignificant.
EPAP is intensifying its campaign to push the government to immediately review and make the necessary changes in the policies governing ethanol trade. Through transparent, proactive and fair policies, the government can give the necessary support that will ensure a stable and strong
NipaTech Employees get Relief Fund
October 2009
In times of emergency, the employees of NipaTech Energy are able to use a special internal program to help them get through a time of crisis. Any employee with a life threatening or urgent need for funds, can apply for immediate assistance from the relief fund set aside for these special needs.
During the recent floods in Manila, the CEO and founder, HR Paddock, set a fund set aside to give relief to the members of the NipaTech family of employees who suffer unexpected consequences. The money is loaned at no interest to the borrower and is repayable according to the ability of the individual.
Some success stories so far:
A female employee whose three year old son contracted Rabies after being bitten by a stray dog needed money for hospitalization but was denied admission for financial reasons. Her son was already showing symptoms of the disease and was becoming critical. NTE’s assistance program stepped in immediately after finding out what was happening and got the small boy the care he needed to survive. He is now well and fully recovered.
The daughter of another employee who lived in Manila was devastated by the recent Typhoon Ondoy where the whole family lost everything and they were stuck on the roof of their home for a week with no food or water. When NTE management learned of this, the relief fund was immediately used to get the family out of the area and to safety in Davao City.
This from the founder on creating the fund; “We are proud to employ the best people in the world, we will do everything we can to protect and enrich the lives of those around us and those of our NTE family. This relief fund will set our minds at ease knowing there is a way to get through the tough times so we can enjoy the good times with all our loved ones around us.”
NTE Staff
To the Flood Victims and the Filipino People
The tragedy that has befallen the Filipino people especially in the typhoon-affected areas in Metro Manila and other parts of Luzon has been noted with great sadness and a deep sense of disbelief.
On behalf of the NipaTech Energy (NTE) family, we wish to convey our deepest condolences and heartfelt sympathy to all the families with members whose lives have been so tragically cut short. Our prayers are with the Filipino people and the Philippines during this sad and difficult time.
the NipaTech Energy Team
PHILIPPINES: Sugar Regulatory Administration drafts plan to allocate sugar to be used as ethanol
09 November 2008
Sector: Policy
A plan has already been drafted by the Sugar Regulatory Administration to allocate sugar for bioethanol production, Business World reported on its online site.
According to SRA Administrator Rafael Coscolluela, selling raw sugar to biofuel producers is one of the options to make use of surplus sugar.
According to the plan, SRA will match biofuel producers with sugar millers and planters for the purchase of sugar as feedstock.
The plan, to be finished by yearend, will be implemented next year, Mr. Coscolluela added.PHILIPPINES: Law that would identify idle lands being pushed by the Agriculture Secretary
08 November 2008
Sector: Policy
The immediate passage of the Land Use act that would identify areas to be planted with biofuel crops has been pushed by Agriculture Secretary Arthur Yap, Business World reported.
According to him, this is something that must be prioritized to identify millions of hectares of underutilized or idle lands that will be planted with jatropha, cassava and sugarcane.
Earlier this year, the House of Representatives together with the Department of Interior and Local Government and the University of the Philippines, agreed to join forces to work for the ultimate enactment of a Land Use Code. The code will serve as a guide for the judicious and appropriate utilization of the country’s land resources.
The law will recognize lands for protection, production, settlements development, and infrastructure development.PHILIPPINES: Senator Zubiri foresees good market for biofuels in 2009
21 November 2008
Sector: Market
Biofuels could turn up to be more profitable for farmers than selling raw sugar, Sen. Juan Miguel Zubiri urged sugar planters in Western Visayas, an online site posted.
Zubiri wants farmers to focus exclusively on sugar production saying that sugar cane producers and planters should go into biofuels production.
Zubiri foresees that by next year, a 300 million liter demand for biofuel derived from sugar and urged them to form cooperatives and put up biofuel plants.
Zubiri stressed that the challenge which farmers in Capiz and Iloilo is to produce enough biofuels and forestall the scenario wherein the country still has to import biofuels from other developing countries like Brazil and Thailand which have made strides in biofuel production.PHILIPPINES: Seaoil sees growth in biofuels sales on 2009
11 November 2008
Sector: Market
Anticipating the growth in local demand for biofuel, Seaoil Philippines Inc. said it will increase its total number of filling stations from 114 to 500 units by 2011, an executive said.
Biofuel is an alternative fuel that blends natural substances like ethanol from sugar cane and coco methyl ester (CME) from coconut to regular gasoline and diesel.
Seaoil Philippines expects to grow their number of stations by 300 percent because of the anticipated increasing local demand following the signing of the Biofuels Act in 2006, which will become effective in February 2007, said Art Cruz, marketing director of Seaoil Philippines.
The Biofuels Act mandates that 5 percent of the annual volume of gasoline fuel sold and distributed by each gasoline company in the country will comprise bioethanol. This will be required two years after the effectivity of the law or starting February 2009.
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