(STAR) By Paolo Romero - The Philippines aims to become the biofuels capital in the region as it gears up for a full-blast production of clean fuels in two years following the enactment of the biofuels law.

President Arroyo performed a ceremonial signing of Republic Act No. 9367, also known as the Biofuels Act of 2006, at Malacañang.

Mrs. Arroyo actually signed RA 9367 last Jan. 12.

The law promotes the use of alternative transport fuels, which is in accordance with the Declaration on East Asian Energy Security ratified by the 16 heads of state of the Association of Southeast Asian Nations and its dialogue partners during the just-concluded 12th ASEAN Summit in Cebu.

The biofuels law seeks to reduce the country’s dependence on imported oil which is expensive and environmentally-harmful. The use of biofuels and other renewable energy sources like geothermal, hydropower, wind, and solar is expected to help reduce or even eliminate global warming.

The law also mandates that within two years from its effectivity, all liquid fuels for vehicles in the Philippines shall contain locally-sourced biofuels components of at least five percent.

Sen. Miriam Santiago, Senate committee on energy chair, said the new measure will entail huge savings for the country which is consuming around P280 billion worth of oil yearly.

"Definitely, we can save at least 10 percent or P28 billion a year with this Act. Our environment would become greener and cleaner since oil pollutants would be eliminated from our atmosphere. There would be more income for farmers while for the consumers, it will mean eventually lower prices, whether gasoline or diesel," she said. "The day of the biofuel has finally arrived in Southeast Asia. The benefits of biofuels are enormous and the fiscal costs are limited," Santiago said.

"Biofuel-compliant vehicle technologies have been extensively applied to protect car owners. Thus, every consumer who uses biofuels will be helping to ensure energy security, reduce damage to the environment and improve the lives of farmers," Santiago said.

Santiago witnessed yesterday’s signing ceremony.

Ford Group Philippines chairman Henry Co also expressed full support for the mandatory use of biofuel.

Energy Secretary Raphael Lotilla said facilities are being put up to produce bioethanol from sugar cane, cassava and coconut in the country. He said the facilities are expected to be fully functional in one to two years.

He said that with the Philippines being the number one coconut producer in the world, it would not be farfetched to see the country become the number one producer of biofuels in the region.

He said Japan would mandate the use of biofuels by 2009 and by that time, the Philippines would be already producing alternative fuels.

"The law mandates a domestic market that would start up the (biofuels) industry. Once you have an industry, you just don’t go for the domestic market, you aspire to conquer the world," Lotilla said.

He said consultations with various stakeholders would begin next week for the drafting of the implementing rules and regulations (IRR) for the biofuel measure.

One of the authors of biofuels law , Rep. Miguel Zubiri, said the enactment of the law will not push up fuel prices, particularly diesel.

"I spoke with President Arroyo to address the concern of the transport group on fears of diesel prices going up because of the imposition of the new Biofuels Act," Zubiri said.

The transport sector claimed that prices of diesel would go up by as much as P1 per liter once the Bill’s provision on one percent blend of coco-methyl ester in diesel products is implemented.

Zubiri cited Arroyo’s commitment that she "will make sure that this program worked and we make sure that the program will not increase and make sure that the transport sector will not suffer."

Meanwhile, Seaoil Philippines Inc. president Glenn Yu said that the price of pre-blended gasoline with bioethanol will drop further to P1 per liter once the biofuel law fully takes effect.

Yu said Seaoil’s bioethanol-blended product is now selling at 50 centavos less than unleaded gasoline.

More jobs to come

Senate Minority Leader Aquilino Pimentel Jr., one of the principal authors of the bill, said the country stands to benefit immensely from the measure, particularly in terms of additional jobs.

Pimentel said the implementation of the bill would also boost the biofuel industry.

He pointed out that 12 companies are now in the process of putting up ethanol refineries in Negros island and other parts of the country.

Since the biofuels are plant-based, Pimentel noted that it would also help cleanse the environment of toxic fumes.

"Given the tremendous advantages from the production and use of environmentally-safe green fuel, the Bio-Fuels Act may be considered as the most important piece of legislation passed by the 13th Congress," he said.

The Bio-Fuels Act mandates the granting of government incentives to companies that will invest in the development and production of ethanol, bio-diesel and other plant-based fuels.

These incentives are in the form of tax exemptions and concessional loans from government financing institutions.

Chemrez Technologies Inc., which owns the only operational bio-diesel plant in the country, is confident of having more than enough operational capacity to meet the demand for international quality bio-diesel.

Chemrez chief operating officer Dean Lao Jr. said the firm’s bio-diesel plant, which was completed and commissioned in June 2006, has a capacity of 60,000 metric tons of BioActiv premium biodiesel per annum. This translates to 68.18 million liters at the rate of 1,136.4 liters per ton.

The bio-diesel giant also has an older plant which has a capacity of 15,000 tons a year or 17.05 million liters.

Domestic consumption of bio-diesel is seen to reach close to 70 million liters a year once the mandated blend of one percent bio-diesel into all domestic diesel fuel is implemented. The ratio increases to five percent in two years.

Industry figures show that petro-diesel consumption in the country averaged 6.85 billion liters per annum in the last five years (2001-2005), with about 7 billion liters consumed in 2005. This figure is projected to increase at an annual rate of between three and four percent over the next five years.

Aside from Mrs. Arroyo, Senate President Manuel Villar and Speaker Jose de Venecia Jr. signed the law. Other lawmakers who witnessed the signing were House Energy Committee Chairman Alipio Badelles, Senior Deputy Majority Leader Arthur Defensor and Bacolod City Rep. Monico Puentebella. Execuitve Secretary Eduardo Ermita was also present during the signing. — With Donnabelle Gatdula and Marvin Sy

Chief News Editor: Sol Jose Vanzi

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