The Department of Energy (DOE) is pressing for the conduct of a comprehensive technical study before it will give any go-signal on plans to utilize palm oil as feedstock for the production of biofuel as a blend to diesel products.

The department clarified to the media that it has not approved yet the use of palm oil for biodiesel, contrary to the statements conveyed by the Federation of Philippine Industries (FPI), one of the major business organizations in the country.

“A thorough technical study should first be conducted – particularly on the development of standard specifications for biodiesel from palm oil,” the DOE stressed.

Beyond the required technical study, the agency similarly indicated that it will still need to elevate the proposal to the National Biofuel Board – via its Biodiesel Committee (NBB-BDC), “for a comprehensive evaluation and recommendation.”

Apart from DOE, the other members of the NBB-BDC are representatives from the Philippine Coconut Authority, Department of Science and Technology, Department of Labor and Employment and the Department of Trade and Industry.

The DOE explained that it informed FPI that “only locally sourced biofuel components shall be used in the biodiesel-blend mandate,” and that has been based on the prescriptions of Republic Act 9367 or the Biofuels Act of 2006.

The energy department acknowledged that it received a letter dated October 4, 2021 from FPI and it was in that correspondence wherein the business group recommended the use of palm oil for biodiesel, and this could be aligned as alternative to the prevailing coco methyl ester (CME) as blend to diesel products.

The department further narrated that in FPI’s view, the country can already export its coconut oil “so that local farmers could reap the corresponding benefits of its current high price in the world market,” and in lieu of that, palm oil could be tapped as a cheaper option.

In a virtual meeting between FPI and the DOE, the agency said “FPI suggested using cheaper palm oil as feedstock for a lower biodiesel price; and asked that the Philippine National Standards be prepared to accommodate palm oil as biodiesel feedstock.”

Nevertheless, the energy department specified that it will also need to validate first the figures presented by the business group — specifically the Rotterdam price comparison of crude palm oil (CPO) versus crude coconut oil (CNO).

Relative to that, the DOE stated that FPI “committed to provide the pertinent data to support its proposal,” including those on the historical prices of CPO and CNO in the world market, and the volume of actual production of CPO and CNO in the Philippines vis-à-vis exported CNO and imported CPO volumes.