Biofuel consumption in the country is expected to partially recover this year with demand for ethanol and biodiesel continuing to rise due to the easing of COVID-19 quarantine restrictions.
A report published by the United States Department of Agriculture’s (USDA) Foreign Agricultural Service noted that ethanol demand in the Philippines is projected to grow nine percent to 570 million liters by the end of the year.
“Following the strict movement restrictions placed to contain the spread of COVID-19 in 2020, the loosening of such measures in 2021 have resulted in a rebound that does not yet return consumption to pre-pandemic levels,” the USDA report said.
“The Philippines’ capacity of 707.9 million liters per year is a result of industry expanding in anticipation of the B5 blend,” it added.
The B5 blend refers to the Department of Energy’s (DOE) earlier proposal to increase the biodiesel blend in petroleum products to 5.0-percent from the current 2.0-percent. The ethanol blend, meanwhile, stands at 10-percent.
Ethanol production is seen to increase by 17.9% to 330 million liters this year from 280 million in 2020, while ethanol imports are projected to slightly decrease to 241 million liters from 240 million previously.
Biodiesel production, meanwhile, may decline to 180 million liters from 188 million previously, taking into consideration 122 million liters in existing stocks.
“With the increased mandate not yet implemented, the capacity is more than enough to cover the required blending for 12 billion liters of diesel per year,” the USDA said.
Prior to the USDA report, the International Energy Agency released a study saying that the Philippines may become a top biofuel importer by 2026. This is despite the existence of Republic Act 9367 or the Biofuels Act of 2006, which pushes for the usage of indigenous ethanol sources.
Business group Federation of Philippine Industries also recently called on the DOE to include palm oil as a form of biodiesel, but the department wants to conduct a thorough study on the proposal first.