Metro Manila (CNN Philippines, November 30) — Listed D&L Industries Inc., a major player in the biodiesel industry through Chemrez, expects a strong bottom line once the Marcos administration pushes its plan to raise the biodiesel blend to 3%.
“The demand will go up automatically by 50%… So the effect on volume and margin, we expect it to be substantial,” D&L President and CEO Alvin Lao said Wednesday.
He told reporters the mandated biodiesel blend has been frozen for 14 years at 2%.
But manufacturers have already jacked up their capacities, making the biodiesel industry ready to provide even up to 5% of coco methyl ester (CME), which is derived from coconut oil.
“So what it means is the capacity to supply is 5%, but the actual demand is only at 2%,” he added. “Low utilization means margin is low and everyone is operating at lower capacity.”
While the increase may be gradual, the effect is still going to be significant, Lao said.
The industry expects to receive positive developments on this next year.
In October, Energy Secretary Raphael Lotilla said the government was eyeing to raise the coco biodiesel blend to curb soaring fuel prices.
Lotilla said the country would bank on robust coconut production, adding that increasing the blend by 1% will only require 2.6 billion nuts.
Refiners are directed to blend biofuels with regular gasoline and diesel to cut the importation of refined fuels while helping local farmers get higher income.
Aside from the biodiesel blend, the government is also looking at raising the voluntary ethanol blend to 20% from the current 10%.
