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Tuesday, July 23, 2024

Chemrez backs plan to increase biodiesel blend

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Chemrez Technologies Inc., the country’s biggest coco methyl ester (CME) producer, welcomed the government’s decision to increase biodiesel blend by one percent as a mitigating measure to high fuel prices.

Chemrez president Dean Lao Jr. lauded President Ferdinand Marcos Jr.’s decision and assured there is available capacity to meet the increase in biodiesel blend from two percent (B2) to three percent (B3).

“The feedstock is available and the capacities for making CME are ready to support the increase in mandate,” Lao said.

Energy Secretary Raphael Lotilla received the directive from the President on Wednesday to increase the CME or coco-biodiesel blend from 2 percent to 3 percent which could be accommodated by the supply of feedstock.

Lotilla said total coconut production is 15 billion nuts, and the additional one percent blend would need only 2.6 billion nuts.

“The increase in the blend can also drive down the cost of coco methyl ester because there will be a bigger market for CME. Right now, we expect at least pure diesel landed price to be at parity with coco methyl ester per liter,” he said.

Lao said consumers could expect many benefits with the B3 mandate such as mileage improvement, lower pollution, import substitution and value adding of coconut oil.

“These benefits will come with no practical cost to the government, yet have extensive benefits to the country. It’s about time the country tap into this valuable resource,” Lao said.

Meanwhile, the President also approved the voluntary implementation of the 20-percent ethanol blend for gasoline which is targeted for approval by the end of 2023. There is currently a mandatory 10-percent blend of ethanol in gasoline.

“The new policy we will be implementing is voluntary and raising it to 20 percent. This is primarily a price mitigation measure because ethanol, especially imported ethanol, is cheaper than the price of gasoline,” Lotilla said.

Lotilla said local ethanol price per liter is P79.49, higher than imported ethanol at P41.84, but local production could only support 48 percent of the 10-percent blend.

“Therefore, the utilization of the higher share of ethanol will result in lower pump prices because of the increased blend,” he said.

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