PCA urges increase in coco methyl ester content of diesel

The Philippine Coconut Authority (PCA) is calling for the increase of coco methyl ester (CME) content of biodiesel to boost domestic utilization of coconut oil amid declining global prices.

PCA administrator Romulo dela Rosa urged the National Biofuels Board (NBB) to raise to five percent the CME content of biodiesel currently sold in the domestic market.

The current diesel blend in the country consists only of two percent CME and 98 percent regular diesel.

“The increase could effectively support our coconut farmers and farmworkers whose livelihoods are threatened by the declining prices of crude coconut oil (CNO) in the international market,” dela Rosa said.

He said the increase in the CME content of biodiesel could be undertaken on a staggered basis, where the first increase could be from two percent to three percent starting Aug. 1.

“The recommended Aug. 1 deadline to increase the biodiesel CME content to three percent gives oil industry players ample time to procure their CME supplies and reset their blending ratios,” dela Rosa said.

Furthermore, the PCA is urging NBB to decide before the year ends whether to further increase the blend to five percent CME content or maintain the three percent until 2020.

Under the Philippine Energy Plan 2012-2030, Philippine biodiesel should contain at least five percent CME by 2020.

“The higher CME content in our biodiesel could significantly increase the demand for copra and CNO, making their prices more buoyant,” dela Rosa said.

He assured oil industry players that the country has sufficient CME manufacturing capacity to support the proposed increase in the biodiesel blend.

“We are urging the NBB to act fast before copra and CNO prices further plummet to crisis level. The coconut industry needs policy action now,” he said.

The price of CNO has declined by over 40 percent in the last few months because of a glut in supply in the world market of vegetable oils. CNO is now selling at its 16-month low of $1,100 per MT from a high of $1,850 per MT.

“The weakening copra and CNO world prices could further reduce the already low income of coconut farmers and farmworkers in the country,” he said.

Philippine biodiesel has the lowest percentage of vegetable oil blended to regular diesel among ASEAN countries.

For instance, Malaysia and Thailand mandate that the biodiesel sold in their markets should contain at least seven percent palm oil while Indonesia is much higher at 20 percent.