Philippines to use Coconut oil to replace Diesel for ₱19.6Billion; 5% Biodiesel Blend mandate Q4 2013

 

With the approval of the National Biofuels Board (NBB) to increase the mandated biodiesel blend from 2% to 5%, the Philippine Coconut Authority (PCA), in collaboration with the University of the Philippines − National Center for Transportation Studies (UP−NCTS), PCA launched the road test of (B5) in public transport vehicles using 5% coconut oil Biodiesel blend  held on July 30, 2013.

 

The study will make use of seven (7) in−use jeepneys of operators belonging to transport groups identified by the PCA and Department of Energy (DOE). The tested jeepneys have undergone inspection at the North Motor Vehicle Inspection Center (NMVIC) of the Land Transportation Office (LTO) for assessment of roadworthiness and compliance to emission standards.

 

The duration of this on-road test was 25 days. For the first five days, the test jeepneys make used of the existing blend (B2). In the succeeding 20 days, these jeepneys were fuelled with the 5% − coco methyl ester (CME) biodiesel blend (B5). After the 25−day on−road test, the participating jeepneys were tested for fuel economy and power efficiency. Opacity tests were also conducted to compare emission performance of B2 and B5 biodiesel fuel blends.

 

PCA Administrator Euclides G. Forbes bared that mandated use of biofuels would strengthen the domestic market for coconut which will create a ₱19.6 Billion − income as B5 means greater demand for CNO. The country would also save as much as ₱15.5 Billion on fuel displacement.

 

"This aims to reduce the dependence on imported fuels with due regard to the protection of public health, the environment and the natural ecosystems consistent with the country's sustainable economic growth that would expand opportunities for livelihood, " he added. As the CME blend increases from 2% to 5%, about 1,099 CME plant workers, 13,183 coconut oil (CNO) milling workers and 23,070 farm workers will be hired. Moreover, coconut farmers will benefit ₱4.838 Million per year from the lien collected through the Social Amelioration and Welfare Program (SAWP).

 

Research and experiments on the use of coco biodiesel as fuel were pioneered by PCA in 1983 together with the other agencies such as Industrial Technology Development Institute (ITDI), Philippine National Oil Company (PNOC−ERDC), National Power Corporation (NPC), and the Department of Science and Technology (DOST). In May 2001, PCA together with the Department of Agriculture (DA) launched a Biodiesel Development Project to test the viability of coconut biodiesel as engine fuel wherein test results showed a reduction of around 50% on their smoke emissions.

 

"As to the B5 blend, the visible cloud of black smoke consisting of carbon and sulfur particulates is reduced by as much as 80%," Forbes added. Carbon dioxide (CO2) is a greenhouse gas dominant in automotive emissions which mainly contributes to global warming. In contrast, coco biodiesel has a neutral carbon footprint. Coconut tree, once planted, absorbs CO2 during growing stage (called carbon sink). Every liter of fossil diesel displaced by cocodiesel represents a CO2 reduction of 3.5 kg per liter of fuel used.

 

The Administrator ensures the increased productivity and sustainable supply of biofuel feedstock as PCA continues to implement its massive planting and replanting programs.

 

Philippines' bio-fuel thrust behind coconut oil surge

 

In April this year, coconut oil prices were ruling at a discount to crude palm oil in the global market.

 

Then, coconut oil ruled at $793 a ton and crude palm oil at $800 a ton.

 

But now, coconut oil prices are quoted at about $900 against $721 for crude palm oil.

 

In India, coconut oil prices have increased from Rs 61 a kg in April to Rs 78 now.

 

Prices of copra, from which coconut oil is derived, have increased to Rs 5,500 a quintal from Rs 4,200 in April.

 

During the same time, palm oil prices have ruled almost unchanged at Rs 55 a kg.

 

"The current premium that coconut oil enjoys over palm oil is not justified. It has to drop along with other oils," said Dorab Mistry, Director, Godrej International, at a global vegetable oil conference in Mumbai on Sunday.

 

According to Thomas Mielke, Editor-in-Chief, Oil World, coconut oil began to rise after the Philippine Government announced that it would increase the use of coconut oil as a bio-fuel.

 

The Benigno Aquino Government on September 20 said it has sought comments from the stakeholders.

 

The B5 or five per cent coconut oil blended diesel may be implemented before the year-end.

 

The Philippines had passed a Bio-fuels Act in 2006 making it compulsory to blend coconut methyl ester in diesel distributed locally.

 

It was aimed at making the country less dependent on fossil fuel.

 

Besides, it has abundant sources of alternative energy such as coconut oil.

 

In 2012, the Philippines exported 1.5 metric ton of copra, coconut oil, copra meal, desiccated coconut, coco shell charcoal, activated carbon and coco chemicals a 1.5% increase compared to volume exported in 2011..

 

This year, coconut oil exports from the Philippines increased to 10.23 lakh tonnes during January-May, more than double during the same period a year ago.

 

Exports have increased mainly because buyers feared they could be caught short by the increased use of coconut oil for bio-fuel.

 

"Coconut oil prices are surging since some buyers feel that they are not adequately covered in case of any shortage.

 

"But with the current peak production season on, we have to see how the seasonal support for it is," said Mielke.

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IMF Says Philippines Insulated From Eventual Fed Exit; Only Risk is Upside Growth, Thanks to OFWs

WASHINGTON—The Fed's eventual exit from easy-money policies will separate the emerging market wheat from the chaff.

 

One country that can handle the Fed exit is the Philippines, says the International Monetary Fund.

 

"When tapering does eventually begin, the Philippines' strong fundamentals…position the economy to adjust smoothly to the accompanying capital flow reversal and slowdown in regional growth," says Rachel van Elkan, the IMF's mission chief to the country.

 

Like many emerging markets, the Philippines took a hit earlier this year when Fed officials started talking about slowing down their large-scale asset purchases meant to spur the U.S. economy. Seeing a new interest-rate environment ahead in the U.S., investors pulled their capital out of emerging economies en masse, causing currency values to free fall and stock markets to plunge.

 

Although it has since somewhat recovered, the Philippines' peso depreciated 10% from early May to late August.

 

But Ms. van Elkan says the country's strong current account receipts, net creditor status, steady reductions in public debt and low foreign participation in government debt markets have helped insulate the economy against more capital flight. Manila's own Fed, Bangko Sentral ng Pilipinas, can also release funds from its Special Deposit Account to provide a cushion to growth, she said.

 

The fund expects the country's growth to only ease slightly next year, to 6% from its current rate of about 6.75% this year. Inflation isn't expected to be a problem, and the government's budget deficit is manageable.

 

In fact, Ms. van Elkin says risks to the country's growth are to upside.

 

"Absorbing the ample liquidity into productive sectors may prove challenging," she says, after an annual review of the country's economy.  "Part of the liquidity could finance credit that is used to fuel demand for real estate, potentially with a strong procyclical effect on the economy," she added.

 

The Wall Street Journal 

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