The Department of Energy said Thursday it denied the proposal of the Federation of Philippine Industries to use palm oil in the country’s fuel mix.
It said in a statement “a thorough technical study should first be conducted, particularly on the development of standard specifications for biodiesel from palm oil.”
The agency also informed the FPI that under Republic Act 9367, or the Biofuels Act of 2006, only locally-sourced biofuel components should be used in the biodiesel-blend mandate.
FPI sent a letter to DOE last month recommending the export of coconut oil so that local farmers could reap the corresponding benefits of its current high price in the world market.
The DOE said FPI proposed to use the cheaper palm oil as an alternative for biodiesel production.
The department set a virtual meeting with the FPI to discuss the proposal in detail. The FPI suggested using cheaper palm oil as feedstock for a lower biodiesel price, and asked the Philippine National Standards to accommodate palm oil as biodiesel feedstock.
The DOE said the group’s proposal should be elevated to the National Biofuel Board through its biodiesel committee for a comprehensive evaluation and recommendation.
The NBB-BDC is composed of the DOE, Philippine Coconut Authority, Department of Science and Technology, Department of Labor and Employment and the Department of Trade and Industry.
“DOE still needs to validate the figures presented by the FPI, specifically the Rotterdam price comparison of crude palm oil and crude coconut oil,” the agency said.
FPI committed to provide the pertinent data to support its proposal, such as the latest historical price of CPO and CNO in the world market and the actual production of CPO and CNO in the Philippines, including exported CNO volume and imported CPO volume.
Rafael Diaz, managing director of the Asian Institute of Petroleum Studies Inc., said the spirit of the Biofuels Act is to lessen the Philippines’ dependence on imported fuel.
“If we allow palm oil, then it goes against the intent of the law because we substitute our domestic coconut oil with imported palm oil,” he said.
He said coco-methyl ester or coco-biodiesel is a much better quality fuel than palm-biodiesel and petro-diesel.
“Combustion of CME reduces pollution and improves mileage,” Diaz said.