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PHL biofuel consumption expected to rise this year — USDA

THE US Department of Agriculture (USDA) said Philippine biofuel consumption is expected to grow this year amid higher demand for ethanol and biodiesel.

“The primary driver of this growth will be increases in the fuel pool, with potential for greater growth if higher blending standards are fully adopted,” the USDA reported.

The USDA said ethanol fuel demand is expected to increase 8% to 682 million liters.

“The feedstock problems remain and imported ethanol will fill the gap, growing by 14% to 280 million liters in 2024,” it added, noting that the Philippines has no option but to continue to use molasses and sugarcane.

In a separate report the USDA is estimating that raw sugar production will be flat at 1.85 million metric tons (MT), while cane production is estimated at 21.6 million MT.

It said the sugarcane industry remains challenged in providing feedstock for the biofuel industry.

In 2024, fuel ethanol production is projected to increase to 395 million liters from 387 million liters the prior year, due to the increased capacity of some ethanol facilities.

“Fuel ethanol imports (will) increase to 280 million liters in 2024 due to the rise in gasoline pool consumption. Local ethanol remains the priority, but imports will continue to cover around 42% of the needed supply,” it added.

Additionally, biodiesel consumption is expected to rise 0.8% to 240 million liters in 2024. Production is projected to grow by 2% to 230 million liters amid the rise in consumption.

“Should the government mandate B5, the available biodiesel plant capacity is more than enough to supply the requirement,” the USDA said, referring to a 5% biodiesel — 95% diesel fuel blend.

At a meeting with President Ferdinand R. Marcos, Jr., the Department of Energy said it will start moving forward with plans to increase the biodiesel blend to B5 in the next three years.

The increase in biodiesel blend to B3 is set for October.

“Given that it would occur in the last quarter of 2024, any volume uptake that would take effect would be minimal and growth would still be attributed to an increase in the overall diesel pool,” the USDA said.

However, it added that the bulk of coconut oil goes to traditional exports, reducing the available supply for biodiesel producers. — Adrian H. Halili