Chemrez Technologies, Inc., a wholly owned subsidiary of D&L Industries, reported that it is already operating its coco-biodiesel plant at optimal capacity after oil firms ramped up their orders to comply with the mandate of a three percent blend (B3) starting October.
In an interview during a media tour of D&L’s new P10.5 billion plant in Batangas, Chemrez President Dean A. Lao Jr. said that, while current capacity is adequate, they may consider repurposing some lines for other oleochemical products to produce coco-biodiesel once the mandated blend it increased further.
The demand for biodisel or coco- is seen to continue growing since the government intends to increase the mandated coco-biodiesel blend to four percent (B4) next year and to five percent (B5) by 2026.
If the repurposing the Quezon City facilities is still not enough to meet growing demand, Lao said they may add more lines in Batangas although there is still no plan and new lines will take longer to put up compared to repurposing existing lines.
“We also have to look into it to see if we can get a good return on investment,” said Lao who noted that they are also ramping up production of their higher margin coconut oil products such as Laurin MCT which is fast gaining popularity in both the domestic and export markets.
“We have to weigh carefully which will be more beneficial for us to expand,” said Lao noting that both products use the same raw material and similar production lines but the margin for food and other applications is higher while biodiesel has higher volume but a lower margin.
Chemrez is the country’s largest biodiesel manufacturer and an increase in blend to three percent should lead to a 50 percent increase in biodiesel volumes which may also result in better margins and profitability for the industry. There are about 14 biodiesel manufacturers in the country.
“This directive from the DOE is a huge step towards progress and the development of the biodiesel and coconut industry in general,” said Lao.
He added that, “This should pave the way for a greater energy self-sufficiency while collectively reducing our CO2 footprint on the planet.”
A higher biodiesel blend means displacing imported petrochemical fuel with locally produced, environmentally-friendly, and sustainable fuel.
With an annual diesel consumption of the Philippines at around 15 billion liters, an eventual hike to B5 from B2 means a 3 percent reduction in diesel volume which translates to about 450 million liters of diesel displaced by biodiesel annually.
With cars being one of the biggest contributors to global warming, the greater use of a more environmentally friendly biodiesel will result in a significant reduction in the Philippines’ greenhouse gas (GHG) emissions.
In addition, tests done by the DOE showed that a hike to B5 from B2 will result in a mileage improvement of around 10 percent which will further add up to the previously mentioned CO2 reduction.