Press Release
May 23, 2006


The Biofuels Act will require some 5.2 million registered vehicle owners to use biofuel before the yearend, said Sen. Miriam Defensor Santiago, chair of the Senate energy committee in her sponsorship speech yesterday.

Two Kinds of Biofuel

The bill makes it mandatory for vehicle owners to use two kinds of biofuel:

  • Bioethanol or E10 from sugarcane, as an additive to gasoline; and

  • Biodiesel or B1 from coconuts, as an additive to diesel.

Santiago said that the bill orders immediate compulsory use, because the two fuel blends require no engine modification for either diesel or gasoline engines.

Biofuel Blends

Biofuels are simply blended with regular fuel, in the same way that additives are now being added to existing fuel, she said.

On the one hand, bioethanol will be blended at five percent per volume into all gasoline fuels, within two years from the effectivity of the Act. Further, bio-ethanol will be blended at ten percent within four years from effectivity of the Act.

On the other hand, biodiesel will be blended to one percent volume into all diesel fuels, immediately upon effectivity of the Implementing Rules and Regulations, to be issued by the Department of Energy, through the Biofuel Board.

Within two years from the effectivity of the Act, the Biofuel Board will mandate a two percent blend of biodiesel by volume.

Bioethanol Price

On the one hand, unleaded gasoline costs P37.24 per liter, and bioethanol or E10 costs about the same at P32 to P34, but the latter has a higher octane rating.

In Brazil, U.S. and Europe, fuel ethanol costs P12 P46 per liter. Ethanol production cost in our country, depending on feedstock, is P16 P56 per liter, compared with the estimated cost of unleaded gasoline at around P32.

Santiago said the mandatory five percent blend of bioethanol will save the country $160 million annually; while the 10 percent blend in the fourth year will save us $354 million.

Biodiesel Price

On the other hand, regular diesel costs P32.24 per liter, and biodiesel sells for the same price at Flying V gasoline stations.

However, the price per liter of bottled B1 is higher than that for regular diesel, at P80 to P120 per bottle.

Biodiesel costs higher, because of higher production costs, but the price difference is offset by the savings generated from the increase in mileage, which translates to P2.82 per liter, Santiago said.

Bioethanol Tests

Santiago said that in the prewar period, bioethanol was used extensively in Germany, Brazil, the Philippines, and the United States.

She added that the top three bioethanol producers in the world are Brazil, U.S., and Japan; further, it is used in India and Thailand.

Biodiesel Tests

In February 2004, President Arroyo issued Memorandum Circular No. 55 making it compulsory for government agencies to use one percent coco-biodiesel.

The Arroyo circular was implanted in July 2004, covering 1,100 government vehicles. There has been positive feedback on engine performance. So biodiesel has already been tested for nearly two years, with good results, Santiago said.

Santiago said nearly all countries in the world are now using biodiesel, notably Australia, Malaysia, Indonesia, Thailand, India, and Japan.

The senator said biodiesel studies have been made in our country by the U.S. Department of Energy, in cooperation with DOE, and by Nihon University of Japan, in cooperation with Technology University of the Philippines.

Various coco-diesel producers have also conducted a number of separate studies.

Product Liability and Manufacturers Guarantee

The senator said that in March 2006, the Chamber of Automobile Manufacturers of the Philippines, Inc. (CAMPI) said that it is prepared for a one percent biodiesel mandate.

CAMPI is a member of the World Wide Fuel Charter Committee, which represents automobile and engine manufacturers worldwide. The world organization has issued the World Wide Charter (WWC).

Santiago said that the WWC has been signed by over 40 automobile manufacturers around the world, who guarantee that engines will work well with the WWC blend of up to 10 percent bioethanol and up to five percent biodiesel.

Liability for product quality will be assumed by biofuel producers and oil companies who shall be monitored by DOE for compliance with the Philippine National Standard crafted by a committee composed of executive departments, oil companies, CAMPI, and academe.

Main Benefits

Santiago said the Biofuels Act will produce the following main benefits:

  • Promote the use of indigenous renewable fuels, thus reducing our dependence on imported oil and increasing our energy self-sufficiency;

  • Reduce negative environmental impact caused by fossil fuels; and

  • Support the agricultural sector.

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