D&L Industries, through its wholly owned subsidiary Chemrez Technologies Inc. (CTI), is studying the feasibility of building a second biodiesel plant to support the government’s plan to further increase the biodiesel blend to five percent (B5) by Oct. 1, 2026.
“The positive regulatory developments coupled with a greater recognition of the economic and environmental benefits of a higher biodiesel blend presents an opportune time to invest and capitalize on the industry’s potential,” the firm said in a statement.
It added that, “D&L sees this as a critical juncture in reinforcing and expanding its leadership in the industry.” Chemrez is currently the largest biodiesel manufacturer in the country.
With D&L’s Batangas plant now completed and no other major capital expenditures in the pipeline, the firm said it has the financial flexibility to potentially undertake the construction of a new biodiesel facility, which would require much smaller capital expenditure (capex) compared to the amount spent on the Batangas plant.
“While the company is cognizant of the risks, D&L believes that the essential nature of biodiesel alongside a favorable regulatory environment ensures consistent and growing demand, mitigating risks associated with economic fluctuations,” it noted.
D&L said it is currently in the final stages of evaluating the risks and returns of building a new biodiesel plant. The decision will be largely contingent on how well it aligns with the company’s strategic growth objectives and the goal of maximizing long-term shareholder value.
Shareholders will also need to approve any expansion plan requiring substantial capex.
D&L pioneered efforts to champion the local biodiesel industry. From 2002 to 2006, Chemrez funded technical research data on biodiesel’s fuel features from both local and foreign laboratories.
In 2006, Chemrez built Asia’s first continuous coconut biodiesel plant, boosting the feasibility of the Philippines developing its local biodiesel industry.
D&L said it maintains a positive long-term outlook on the local biodiesel sector, recognizing the significant benefits an increased biodiesel blend can offer the economy, environment, and consumers.
Several facets of the economy are set to benefit by developing the industry. With at least 20 percent of the Philippine population directly or indirectly benefiting from the coconut industry, the potential for economic value creation in the form of additional investments and jobs in both the agriculture and the manufacturing sectors is significant.
Moreover, the push towards biodiesel translates into more significant use of indigenous fuel, which reduces the country’s dependence on imported fossil fuels, supporting energy self-sufficiency.
With less reliance on imported fuels, the fluctuations in global oil prices would have a lesser impact on the country’s foreign exchange reserves. This stabilization can lead to a more predictable economic environment for currency management.
From a sustainability perspective, coco-biodiesel offers a meaningful avenue to cut carbon emissions collectively. According to a study by the University of the Philippines Los Baños (UPLB), coco-biodiesel emits a whopping 78 percent less emissions than petroleum diesel.
Furthermore, an increase in biodiesel blend from two percent (B2) to B5 is estimated to yield a 10 percent mileage increase, which directly translates to consumer savings.