Philippines to boost ethanol blending

Manila: Increasing the ethanol blend in gasoline from 10 per cent to 20 per cent could reduce fuel prices by up to four per cent, potentially saving Filipino vehicle owners as much as P16 billion annually, according to a report by the United States Department of Agriculture-Foreign Agricultural Service (USDA-FAS), reported Philstar Global.

The US government agency highlighted that incorporating E15 (15 per cent ethanol) and E20 (20 per cent ethanol) blends into gasoline products could cut fuel prices by two per cent and four per cent, respectively. The report from the USDA-FAS Global Agricultural Information Network detailed that the E15 blend could result in annual savings of approximately P7.947 billion, while the E20 blend could lead to savings of around P15.893 billion.

“This initiative would also present an opportunity to share a portion of the consumer savings with local fuel ethanol producers through higher prices for domestically produced fuel ethanol, thereby encouraging local producers to maximize their output,” the report stated.

Currently, the Philippines uses an E10 blend in its gasoline. Government regulators have expressed interest in increasing this to a voluntary E20 mix, although the Department of Energy has yet to issue the necessary regulations to support the discretionary use of higher ethanol blends in gasoline.

Driven by increased car purchases, the demand for ethanol in the Philippines is projected to recover this year, growing by 8.42 per cent year-on-year to 682 million litres. The USDA-FAS attributed this rise in consumption to an anticipated increase in fuel supply for higher gasoline blends, as well as an expansion in the capacity of fuel ethanol plants.

“The expected growth is linked to the rising number of car purchases, which saw double-digit growth in 2023, continuing to drive up gasoline consumption,” the USDA-FAS report noted.

The report also pointed out that the current “overcapacity” of fuel ethanol plants resulted from seven potable alcohol producers shifting to fuel ethanol production following the implementation of a 22 per cent excise tax on potable alcohol.

Local fuel ethanol production is projected to meet nearly 58 per cent of the country’s total requirement. The USDA-FAS forecasted that domestic biofuel output would reach a record 395 million litres this year, up two per cent from last year’s 387 million litres. Meanwhile, the country’s fuel ethanol imports are expected to rise by 14 per cent annually to 280 million litres, from 246 million litres last year.

The Ethanol Producers Association of the Philippines has been advocating for an increase in the ethanol blend from 10 per cent to 15 or 20 percent to further reduce gasoline prices and achieve more savings from avoided greenhouse gas emissions.


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