Philippines: Oil Companies Running Afoul of Biofuel Law
The Manila Times reports that local ethanol players are accusing oil companies of running afoul of the Philippines’ Biofuels Act of 2006, which requires that all liquid fuels for motors and engines contain locally sourced biofuels.
According to the ethanol industry, most oil firms continue to source most of their ethanol requirements from countries like Brazil because of limited local production.
Tetchi Cruz Capellan, Ethanol Producers Association of the Philippines (EPAP) executive director, explains:
If the department fails to control the importation of ethanol from Brazil, [then] we are simply replacing Middle East oil imports with Brazilian ethanol imports.
Capellan said that the uneven playing field slowed the entry of investments in the biofuels sector, consequently undermining the alternative fuels program of the government.
Brazil is the recognized global leader in ethanol production, exporting 3.5 billion liters of ethanol and has supplied the domestic market with approximately 14 billion liters in 2007. The South American country imposes a 30-percent import tax on ethanol to protect its industry whereas the Philippines only slaps a 1-percent duty on such imports.
To enforce compliance, the Philippines’ Department of Energy issued a circular that controls the importation of ethanol by requiring all oil companies to declare compliance to the Biofuels Act.
More on the oil companies’ non-compliance with the Biofuels Act.