THE Philippine Coconut Authority (PCA) is against proposals to suspend the government’s biodiesel blend program, saying either the current blend be maintained, or revert to the previous level.
Republic Act 9367 requires all diesel fuel sold in the country to contain a minimum percentage of biodiesel derived from coconut oil (coco methyl ester, or CME).
The government currently enforces a B3 level, or 3-percent biodiesel blended with 97-percent petroleum diesel. The previous baseline was B2 (2 percent) and B3 (3 percent in 2024).
The proposal to suspend the program is a price-control measure. There is concern that increasing biodiesel content in diesel would further raise fuel prices, which have already surged due to the war in Iran.
But the PCA said that holding off the prevailing blend level would harm coconut farmers, as well as long-term investments in the sector and the overall stability of the industry.
“While proposals have been raised to defer the scheduled increase to a 5-percent blend, the Authority supports maintaining the current biodiesel blend at 3 percent, or, if warranted, reverting to the previous 2 percent level as a calibrated and prudent response under prevailing market conditions,” the PCA said in a statement.
Consultations with industry processors show that there is existing capacity to increase the biodiesel blend up to 7 percent, subject to appropriate policy direction and market readiness, the PCA added.
The biodiesel blend program drives domestic demand for coconut oil, the PCA stressed, noting that the process involves coconut farmers selling copra to oil millers, who in turn supply coconut oil (CNO) to CME producers.
There are no specific pricing incentives for copra used for biodiesel production under current market practices, the PCA said, adding that direct income benefit for coconut farmers is still limited.
“Any suspension or displacement of CME in favor of imported palm methyl ester (PME) would likely redirect domestic supply to lower-priced export markets, thereby exerting downward pressure on local copra and CNO prices,” said the PCA, noting that the proposed changes may have negative implications, since CME is considered more environmentally friendly compared to imported PME.
“The Authority continues to engage with stakeholders and partner agencies to ensure that biofuels policy remains responsive, evidence-based and aligned with national development priorities, while safeguarding the welfare of Filipino coconut farmers,” said the agency, which is tasked to develop, regulate and promote the coconut industry, one of the country’s most important agricultural sectors.