FPI bats for inclusion of palm oil in biodiesel mix

Although there is enough supply of palm oil in the global mart, the Philippines only has 80,000 hectares of land allotted to palm plantations and can produce 100,000 tons of palm oil annually. (Photo by oneVillage Initiative/Flickr, CC BY-SA 2.0)

MANILA — The Federation of Philippine Industries (FPI) pushes for the inclusion of palm oil in the biodiesel additive provided for by the Biofuels Act.

FPI Chairman Jesus Arranza said in an interview Wednesday that the guidelines of the Biofuels Act prescribed a specific chemical formula that only coconut oil should serve as biodiesel mix.

Arranza said the business group had talks with the Technical Committee on Petroleum and Petroleum Additives under the Department of Energy to review the specification and add palm oil as biodiesel mix.

“Palm oil is cheaper [than coconut oil]. So we can use palm oil [as biodiesel mix]. There is a need to modify the specification and include palm oil, so that [oil companies] have choices either they want a high cost or a cheaper additive,” the FPI chair said in Filipino.

He said that coconut oil in the world market cost around USD1,500 per metric ton while palm oil prices at around USD725.

He added that coconut can only produce 450 kilograms of oil per hectare while palm oil can generate five tons, or about 4,536 kilograms of oil per hectare.

“We can use of palm oil in the formulation of biodiesel so it will bring down prices of diesel to the consumer, and at the same time allow the exportation of coconut for higher value products to foreign countries,” Arranza noted.

Arranza said the use of palm oil as biodiesel additive can also soften the impact of potential excise tax on oil under the comprehensive tax reform package.

Although there is enough supply of palm oil in the global mart, the Philippines only has 80,000 hectares of land allotted to palm plantations and can produce 100,000 tons of palm oil annually.

Alfredo Montecillo, director and chief operating officer of the country’s oldest palm oil company Kenram Palmoil Industries, Inc., said  there were only eight palm oil players in the Philippines — six in Mindanao, one in Bohol, and one in Palawan.