OPPORTUNITIES IN BIO FUEL PRODUCTION

With the prices of petroleum products breaching the $100 a barrel barrier, many of those in the fuel industry have started considering other alternatives. Our government had passed Republic Act 9367, the Biofuels Act, a law that mandates both the government and the private sector to lower dependence on imported fossil fuels and find alternative sources.

The law also states that diesel fuels should be blended with one percent bio-diesel, while gasoline fuels should be diluted with about five percent of bio ethanol. The blending will increase to two percent in diesel fuel by February 2009 and 10 percent of bio-ethanol by 2011.

Another intention of the law is to increase economic activity in the country considering that bio-diesel and bio-ethanol are both products of plants or agriculture activities.

Under this program, the Philippines is looking into becoming the global leader in the bio-fuels industry by 2011 through accelerating production of these products; as this will also result in self-sufficiency and at the same time protect the environment.

Based on the data from the Agribusiness Land Investment Center, blending one percent of bioethanol to gasoline fuels will result in $168 million in annual foreign exchange savings; while doubling the amount blended will mean $482 million in foreign exchange savings.

The same data also shows that blending diesel fuel with one percent biodiesel, usually the cocomethyl ester from coconut will result in $50 million annual savings; while doubling the amount blended will result in $133 million savings.

Under the implementing rules and regulation guidelines of the law, the Department of Agriculture, the lead agency in implementing the program; was tasked to identify and develop viable and quality feedstock; develop a national program for the production of crops for use as feedstock supply;ensure increased productivity and sustainable supply of biofuel feedstocks; publish information on available and suitable areas for cultivation and production of biofuels crops; and undertake the identification and publication of potential areas suitable for expansion.

Biofuel Production in Mindanao

What is notable is that the areas identified for the production of both products are Mindanao provinces.

The provinces of Agusan del Norte, Agusan del Sur, Basilan, Bukidnon, Cagayan de Oro, Camiguin, Compostela Valley, Davao City, Davao del Norte, Davao del Sur, Davao Oriental, Dinagat Islands, Isabela City, Lanao del Norte, Lanao del Sur, Maguindanao Misamis Occidental, Misamis Oriental, North Cotabato, Sarangani, Shariff Kabunsuan, South Cotabato, Sultan Kudarat, Sulu, Surigao del Norte, Surigao del sur, Tawi-tawi, Zamboanga City, Zamboanga del Norte, Zamboanga del Sur and Zamboanga Sibugay are the production centers for bio diesel. Majority of the areas that are part of the Autonomous Region of Muslim Mindanao (ARMM) are in this short list.

If one reviews the list, an obvious conclusion can be drawn that Mindanao is capable of producing the entire biodiesel requirements of the country. About 893,000 hectares in the whole region can be planted with jatropha, coconut and oil palm, the main sources of biodiesel.

Sources of Bio-ethanol

The same provinces can also be planted with cassava, sugarcane and sweet sorghum; the main raw materials for bioethanol. The Agriculture Department has identified about 701,000 hectares of land in Mindanao for these plants.

In Davao Oriental, for example, Gov. Corazon Malanyaon has pushed for both the production of cassava and oil palm and the rehabilitation of coconut considering that the province is the top producer of copra.

At present, six companies have already been accredited for biodiesel production with their total production of 252 million liters annually. Four other companies are also seeking accreditation.

On the bioethanol program, the country’s potential production could reach 794 million liters a year and that several companies have committed to buy locally-produced bioethanol.

To be able to produce the target, the existing sugarmills could be converted within 18 months; while the conversion of greenfield facilities will take between two years and 30 months.

Under the program, the target is to replace 10% of imported gasoline with bioethanol and this would result in P10.4 billion in saving within the next three years. The Philippine Fuel Ethanol Alliance estimates that bioethanol requirements for the next 10 years of 3.7 billion liters will be equivalent to 51.71 million metric tons of sugarcane.

At present, Mindanao accounts for 19.1% of the total sugarcane production in the country at 72,319 hectares of the total 377,182 hectares. This further validates the fact that Mindanao, with its vast agricultural land, can produce more than the country requirements.

Will we in Mindanao be able to capture these opportunities? Will we be able to translate these into jobs in the countryside? We all know that the answers are within ourselves.

(Joji Ilagan Bian is a strong and respected advocate for the development of the region. She is Chair of Joji Ilagan Foundation ( www.jojiilagancareercenter.com) ; President , Phil. Call Centers Alliance and Mindanao Tech Voc Schools Association; Mindanao Rep, Export Development Council. Email comments jojibian2@yahoo.com)