STATUS OF BIOFUELS IN THE

PHILIPPINES

Biofuels: Trends and Updates

Astoria Plaza Hotel
November 17, 2009

Ruby B. de Guzman
OIC-Chief, Biomass Energy Management Division
Department of Energy

RA 9367: Biofuels Act of 2006

Provides fiscal incentives

and mandates the use of
biofuel-blended gasoline
and diesel fuels

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 Republic Act No. 9367
 It mandates the use of biofuels
- blending a minimum of 1% biodiesel by volume into all diesel
engine fuel distributed and sold in the country from effectivity of the
Law, and increasing blend if feasible; minimum biodiesel blend to
2% beginning February 6, 2009.
- blending of 5% bioethanol in total gasoline volume beginning
February 6, 2009

 It provides incentives in the production, distribution

and use of locally-
locally-produced biofuels

 It creates the National Biofuels Board that shall

monitor and evaluate the implementation of the
National Biofuels Program

Incentives under the Biofuels Law

 Tax incentives
 Specific Tax per liter of volume capacity, is zero (0) for
biofuels component;
 Water effluents from the production will not be covered
by RA9275 or Clean Water act.
 High priority from Government Financial Institutions to
entities that will engage in production, storage, handling
and transport of biofuel and biofuel feedstock, including
the blending with petroleum as certified by DOE,

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 Biofuels Implementation Plan

2004 2007 2009 2011

Biofuels Law:
Use of B1 in mandatory use of
Biofuels Law: Biofuels Law:
Government biofuels:
2% biodiesel >2% biodiesel
Vehicles To Start at
5% bioethanol 10% bioethanol
(M.C. 55) 1% biodiesel
(B1)

RA 9367 Effectivity

BIOFUELS REQUIREMENTS
 BIODIESEL  BIOETHANOL
Minimum Blends:
Minimum Blends: @ 5% (2009) = 208.11 M liters
@ 1% (2007) = 62.10 M liters @ 5% (2010) = 218.93 M liters
@ 2% (2009) = 133.68 M liters @ 10% (2011) = 460.63 M liters
@ 2% (2010) = 138.70 M liters @ 10% (2014) = 536.29 M liters

@ 2% (2014) = 160.70 M liters

Bioethanol Supply:
 2 Accredited Producers with
Biodiesel Supply: annual total capacity of 39 million
liters
 12 Accredited Producers  2 production facilities to be on-
on-
with annual total capacity of stream between 2010-
2010-2011 with
395.62 million liters additional capacity of 68 million
liters/year
 Additional capacities totaling to
Feedstocks used: about 100 million liters/year by
2012
 Coconut oil (current)
 Jatropha ( under study)
Feedstocks used:
 Sugar Cane, Molasses (current)
 Sweet sorghum, cassava ( under
study)

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 Biofuels Law Implementation Update

Formulated Philippine National Standards for biodiesel (B100)

& CME blends (B1/B2), anhydrous bioethanol and blended
bioethanol (E10)

Accredited 12 Biodiesel producers and 2 Bioethanol producers

including monitoring and compliance to PNS

Monitored Compliance of Oil Companies’ blending facility

capability build-up, handling and storage facilities/procedures
& biofuel sourcing

Conducted inspection and sampling of depots to determine

biodiesel blend conformance to PNS and oil companies’
compliance to the mandate was validated

Biofuels Law Implementation Update

 Ensured the availability of E10 (10

10%
% bioethanol
bioethanol)) in gasoline stations
and B2 in all diesel fuels
 Prepared the National Biofuels Program and same was approved by
the National Biofuels Board on September 19
19,, 2008
 Published JAO No. 2008
2008--1, Series of 2008 providing the “Guidelines
Governing the Biofuel Feedstocks Production, and Biofuels and Biofuel
Blends Production, Distribution and Sale under Republic Act No. 9367
9367””
which took effect on March 20
20,, 2009
 Issued Department Circular No. 2009
2009--02
02--0002 “Mandating a Minimum
of 2% Blend of Biodiesel in all Diesel and 5% Bioethanol in Annual
Total Volume of Gasoline”effective May 6, 2009
 Issuance of Memorandum Circular No. 184 “Directing all Departments,
Bureaus, Offices and Instrumentalities of the Government, Including
Government--Owned and ontrolled Corporations to Use Ten Percent
Government
(10
10%)
%) by Volume Bioethanol in their Gasoline Requirements” on
October 26
26,, 2009
 Conducted IEC campaigns

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 RA No. 9513 - Renewable Energy Act of 2008

Accelerate the development of the country’s renewable

energy resources by providing fiscal and non non--fiscal
incentives to private sector investors and equipment
manufacturers / suppliers
suppliers..

RE Developers (New & Existing)
7 year Income Tax Holiday (ITH)
10 year Duty-free Importation of RE Machinery,
Equipment and Materials
RE Suppliers, Fabricators,
Manufacturers
7 year Income Tax Holiday (ITH)
10 year Tax and Duty-free Importation of
Components, Parts and Materials

1.5% Special Realty Tax Rates on Equipment

and Machinery
7 year Net Operating Loss Carry-Over
10 % Corporate Tax Rate after ITH
Accelerated Depreciation
Zero Percent Value-Added Tax Rate Zero-rated value added tax transactions
Cash Incentive of Renewable Energy Developers
for Missionary Electrification
Tax Exemption of Carbon Credits
100% Tax Credit on Domestic Capital Equipment 100% Tax Credit on Domestic Capital
and Services Components, Parts and Materials
Exemption from the Universal Charge
Payment of Transmission Charge
Hybrid and Cogeneration Systems Financial Assistance program

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 Other Incentives
 Incentives for Farmers Engaged in the Plantation
of Biomass Resources
• All individuals and entities engaged in the plantation of
crops and trees used as biomass resources such as but
not limited to jatropha
jatropha,, coconut, and sugarcane, as
certified by the Department of Energy;
• Within ten (10) years from the effectivity of the Act,
duty
uty--free importation and be exempted from Value-
Value-
Added Tax (VAT) on all types of agricultural inputs,
equipment and machinery;
 fertilizer, insecticide, pesticide, tractor, trailers, trucks, farm
implements and machinery, harvesters, threshers, hybrid seeds,
genetic materials, sprayers, packaging machinery and
materials, bulk handling facilities, such as conveyors and mini- mini-
loaders, weighing scales, harvesting equipment, and spare
parts of all agricultural equipment

CHALLENGES AND
CONCERNS
 Development of other locally grown non-
non-food
feedstock
 Cost effective and efficient technologies to reduce
production cost of biofuels
 Investments for bioethanol production facilities
 Sustained communication plan

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Thank you ! ! !
www.doe.gov.ph