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PIA Press Release
2006/10/12

DOE hails Senate approval of biofuels bill

Manila (12 October) -- The Biofuels Bill, a landmark legislation that is expected to liberate the country's transport sector from full dependence on imported fuel has been finally approved at the Senate.

Energy Secretary Raphael Lotilla welcomed the approval saying that the law will provide the needed environment for the development of our local biofuels industry. "We will attract more investors and we will be able to develop this new industry more rapidly as we shift to more indigenous fuels in response to the uncertainty of the world's energy supply. This bill will build new industries, new domestic markets, new investments, new local expertise", the Secretary said.

The House of Representatives earlier approved its version of the Biofuels Bill in November 2005. Both Houses of Congress are expected to convene the bicameral conference committee to reconcile each House's version once Congress resumes session on November 5.

Specifically, the Biofuels Bill mandates a minimum 1% biodiesel blend into all diesel engine fuels upon the approval of the implementing rules and a minimum 5% bioethanol blend into all gasoline fuel distributed and sold in the country within two years upon effectivity of the Act. The mandated blend will increase to 2% for biodiesel two years from the effectivity of the Act, and to 10% for bioethanol four years after the effectivity of the Act.

The bill also provides incentives for the producers and manufacturers of local biofuels for blending into petroleum fuels. For instance, biofuels producers are already assured of a mandated market for their product, specific tax exemption and financial assistance from government financial institutions.

The Secretary also stressed that it would not be difficult and costly to blend biofuels into gasoline and diesel since the bioethanol and biodiesel blends would not require engine modifications. The Chamber of Automotive Manufacturers of the Philippines, Inc. had earlier expressed support for the use of 1% biodiesel for automotive diesel engines without any engine modification. As much as 10% blended bioethanol is also already available in the market without engine modifications.

Blends of unleaded gasoline and ethanol may also be used in motorcycles, pump boats, hand tractors, and old vehicles without engine modification, provided that the ethanol content is not greater than 10%.

The bill imposes the penalty of imprisonment from one to five years with a fine of P1 million to P5 million for those selling substandard or underblended biofuels and mislabeled biofuels products.

Meanwhile, initial estimates show that a 1% displacement of petroleum based-diesel will earn foreign exchange savings for the country of about US$25 million while for bioethanol, a 5% blend will result in foreign exchange savings of about US$179 million and a 10% blend will mean gasoline displacement of some 565 million liters, approximately US$396 million of foreign exchange savings per year.

Secretary Lotilla expressed his gratitude to the Senate leadership especially to the Senate Committee on Energy Chaired by Senator Miriam Defensor Santiago who has been very supportive of the bill. He also cited the leadership at the House of Representatives for passing their version of the Biofuels Bill early on.

Legislators, private sector, environmentalists, farmers, research agencies, funding institutions and consumers see this bill as a crucial step in bringing radical changes to achieve energy self-sufficiency. (DOE/PIA-MMIO) [top]

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