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Manila Bulletin devider Business devider Trade & Industry devider DOE: Biodiesel blend increase on hold due to coconut oil costs, supply

DOE: Biodiesel blend increase on hold due to coconut oil costs, supply

Published Jun 13, 2025 03:27 pm

The Department of Energy (DOE) said that the resumption of the biodiesel blend increase will be under evaluation by the National Biofuels Board (NBB), following the suspension of the blend over tight supply and higher costs of coconut oil.

In a briefing on Friday, June 13, Energy Undersecretary Alessandro Sales explained that there would be a periodic review of the biofuel increases to determine their feasibility.

According to Sales, the resumption of implementation will be “studied by the board on a regular basis because there are a lot of factors involved, not just the price of the feedstock, it's also the availability of the feedstock.”

He also noted that the feedstock has gained quite some competition, noting that “there are so many competitive friction and of course, in rolling out higher blends as we did experience when we rolled out to B3 there is also the adjustment to the logistics by both the manufacturers of coco methyl ester (CME) and the end-users which are the oil companies.”

Recently, the NBB sought to suspend the increase of the four percent (B4) biodiesel blend that was initially scheduled in October 2025, and the five percent blend (B5) by October 2026.

“This was decided because of the prevailing high cost of coconut oil, which is the principal feedstock for our coco methyl ester, the biodiesel component in the diesel being sold in the Philippines,” Sales explained.

He emphasized that pushing the B4 mandate given the current circumstances would add to the price pressure, but clarified that this would not mean a complete ban on the blend.

Outgoing Energy Secretary Raphael P.M. Lotilla added that despite the higher demand for coconut feedstock, local farmers are benefiting from higher coconut oil prices.

“In the meantime, we do recognize that the government has a big program to plant more coconuts and there will be additional volumes available in five to seven years,” he said.

“Therefore, we will have to make sure that our production meets the demand and that we both externally and internally… The bottom line is our [coconut farmers] are happy with the prices that they are getting right now for the price of coconut oil,” he added.

Meanwhile, Chemrez Technologies, Inc. further supported this action, stating that adverse effects of the weather have affected their production.

“Coconut is our feedstock for Biodiesel, and the El Niño of 2024 adversely affected supplies in 2025. The NBB and PCA have evaluated the supply situation and have given a sensible recommendation to postpone B4,” he said.

Chemrez, along with other members of the coconut industry, are awaiting a definite date to resume the B4 mandate, stating that it will take five months in advance to prepare for the implementation.

“The progression towards B5 remains a sound and sustainable solution for the Philippines to attain its economic, environmental, and health goals,” he added.

As per the Biofuels Act of 2006, all diesel fuel must incorporate a certain amount of CME to promote cleaner-burning fuels as well as support the local coconut industry.

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Department of Energy (DOE)
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