The Philippines Coconut Authority (PCA) is pushing to increase the country’s biodiesel mandate in transport to 5pc (B5) from 2pc currently.
B2 has been in place since 2009 but Covid-19 disruptions to the biodiesel supply chain meant the Philippines missed its target to achieve B5 in 2020. This was the second time the implementation was pushed back, having been forced to postpone the rollout in 2015 because of high coconut oil prices that would have pushed retail biodiesel prices higher without subsidy support.
The PCA is a government agency under the Department of Agriculture tasked with developing the nation’s coconut industry, from which the oil is used to make biodiesel.
Robust growth in international demand for coconut oil and industry inefficiencies have limited biodiesel expansion in the country where imports of the fuel are prohibited.
The United States Department of Agriculture estimated less than 30pc of the nation’s 608mn litres of biodiesel capacity was used in 2020 resulting in just 175mn l of output. Consumption was around 185mn l, which was 2.78pc of estimated on-road diesel demand of 6.65bn l.
Coconut methyl ester biodiesel prices averaged around 52.50 pesos/l ($1.10/l) during January-September last year compared with P32.36/l for regular diesel between January-October.
The PCA said it hopes the increase to B5 will lead to $284mn of foreign exchange savings on diesel imports.