Importation reliance and minimized shock price vulnerability are expected as the biofuel blend is set to increase this year, according to the Department of Energy (DOE).

Michael Sinocruz, DOE Director for Energy Policy and Planning explained that because biofuel is locally produced, the country will not only have to import but also project a significant exportation of its excess supply.

“We have a policy to increase [biofuel blend] to 5 percent [by 2026]. We’re at 2 percent which would now go up to three,” Sinocruz said on Tuesday, May 21.

“Since oil has a higher price per liter, [the DOE’s decision] would make biofuel competitive,” he added.

The DOE last Monday issued the necessary guidelines for the implementation of the higher biodiesel blend in diesel and bioethanol mix in gasoline.

The energy sector recently laid down the policy framework for a higher biofuel blend which would begin in October. This would benefit consumers because it would reduce diesel and gasoline prices.

While there is only a one percent increment set out for this year, Sinocruz stated, “this new blend would reduce pollution, we can even promote additional jobs, and get rid of our excess capacity.”

The DOE director also shared that there had been an old energy plan which targeted a 20 percent increase in biofuel but had been turned down because of the high price per liter compared to oil. 

Effect on farmers

Meanwhile, the Sugar Regulatory Administration (SRA) also welcomed the biofuel increase, as it expressed more opportunities for local farmers.

“This policy is a welcome policy for the sugarcane industry as it will bring more opportunity for our local sugarcane farmer, as there will be bigger demand for his sugarcane and/or his molasses, depending on the type of Ethanol plant, as some ethanol plants use sugarcane as feedstock, and some use molasses,” SRA Administator Pablo Azcona said.

Additionally, Azcona sees ethanol plants as a chance to maximize production through local feedstock.