The Department of Energy (DOE) will issue a circular to implement a 1-percent increase in biodiesel blend next year as part of the government’s mitigating measure to high fuel prices, an official said Friday.
“DOE plans to issue the circular by Jan. 1, 2024, but the effectivity is July 1, 2024 to give six months [of] transition period,” Department of Energy (DOE) director for the oil industry management bureau Rodela Romero said.
The planned transition period will give oil companies and the coco-methyl ester (CME) producers time to increase the blend to 3 percent from 2 percent.
Energy Secretary Raphael Lotilla announced in October that he received a directive from President Ferdinand Marcos Jr. to increase the CME blend which can be accommodated by the supply of feedstock.
Lotilla said national coconut production is 15 billion nuts, with the additional 1-percent blend requiring 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.
Chemrez Technologies Inc., the country’s biggest CME producer, welcomed the plan and assured feedstock availability.
“The feedstock is available and the capacities for making CME are ready to support the increase in mandate,” Chemrez president Dean Lao Jr. 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 taps into this valuable resource,” Lao said.