Energy seeks Congress intervention on bioethanol blend

The Energy Department wants Congress to intervene on how to meet the required concentration of bioethanol in local gasoline, noting that local production might not meet demands next year. "It's either Congress will tell us to implement the 10-percent mandated blend, or maybe one option also is [to] use all the local [production]," Energy director Zenaida Monsada said. "You can still have pure gasoline then blended to the extent of what is available locally, or pursue the 10-percent mandate and import the difference," Monsada said. Philippine oil companies are required to mix 10 percent bioethanol with gasoline starting 2011, from the current 5 percent blend that took effect in 2009 via the Biofuels Law that promotes the use of cleaner energy sources for vehicles. Monsada pointed out that local ethanol production might not be able to meet the new requirement. "Even the 5 percent blend cannot be met by local production. So we really need guidance from Congress," she said. The Ethanol Producers Association of the Philippines earlier reported that ethanol production would only amount to 80 million liters this year, against the demand forecast of 240 million liters. Congress might have to amend the Biofuels Law because of the industry's inability to meet the mandate, Monsada said. "Effectively it's like an amendment because we cannot implement it even if we look at other options," she said, noting that the National Biofuels Board can determine the level of the ethanol blend but not reduce the existing 5 percent blend. She added that the department is already conducting actual test runs on old vehicles using the 10-percent blend, especially those without warranty. "We are finalizing the test protocol. You have a lot of consumers that are afraid to use blended fuels," Monsada said. Ethanol producers and the small oil players have been at loggerheads on whether oil companies should purchase the entire production of the local ethanol producers before importing cheaper ethanol from other countries. If the industry is forced to purchase from local producers, gasoline prices are likely to go up, the Independent Philippine Petroleum Companies Association had warned. But the producers association said that around 10 of the investors have put their plans on hold in the absence of a firm commitment that oil firms would buy domestic ethanol. Bronzeoak Philippines, an ethanol producer, recently shelved its P8-billion expansion project due to volatile prices in the world market. —Nikka Corsino/VS, GMANews.TV