DOE mandates higher biodiesel blend beginning October 2024

Following the recommendations by the National Biofuels Board (NBB), the Department of Energy has released guidelines for adopting a higher biofuels blend. This move aims to decrease dependence on imported fuels, reduce greenhouse gas emissions, and bolster the local biodiesel and bioethanol sectors.

Under the new guidelines outlined in Department Circular No. 2024-05-0014, downstream oil industry participants are required to implement a 3% coco methyl ester (CME) blend in all diesel fuel sold nationwide, beginning 01 October 2024. This percentage will gradually increase to 4% by 01 October 2025, and further to 5% by 01 October 2026.

The increase in the CME blend is expected to create additional market for coconut farmers, biodiesel producers, and other stakeholders in the coconut industry, with around 900 million additional nuts as feedstocks to produce around 100-120 million liters of additional CME requirements to satisfy a 1% mandatory increase in CME blend.

Moreover, based on a 30,000-kilometer on-road test with a higher CME blend of 5%, an increase of around 10% in mileage corresponds to an estimated net savings of PhP4.17 per liter of diesel.

Meanwhile, downstream oil industry participants may have the option to raise the ethanol blend in all gasoline fuel by 20%, from the current 10%, to reduce domestic pump prices. Increasing the ethanol blend to 20% could bring about an estimated decrease of approximately PhP3.21 per liter in the gasoline pump price.

"Implementing the higher biofuels blend is a win-win solution as we promote economic growth, uphold environmental stewardship, and strive for cleaner energy utilization. It is also about investing in a future where sustainability drives progress,” Energy Secretary Raphael P.M. Lotilla said.

To ensure a smooth and timely transition to higher biofuel blend percentages, the downstream oil industry must maintain sufficient storage capacity, blending facilities, transport systems, and dedicated storage tanks and dispensing pumps.

The Biofuels Act of 2006 mandates that all liquid fuels for motors and engines sold in the Philippines be blended with biofuels. The current ethanol blend for gasoline has remained at 10% since 2012, while the CME blending last increased to 2% in 2007. ###