Sen. Gatchalian vows to look into bioethanol feedstock and pricing woes

July 14, 2019
Hannah Torregoza (Manila Bulletin) |

Senator Sherwin Gatchalian on Sunday vowed to convene the Joint Congressional Oversight Committee (JCOC) on Biofuels to inquire into the reported problems hounding the industry when the 18th Congress opens in July 22.

Gatchalian said he will dig deeper into the reported feedstock and pricing problems that continue to plague the biofuels industry, saying complaints of ethanol producers having a tough time sustaining the supply amid the skyrocketing prices of molasses have reached his office.

The Senate energy committee chair said these bioethanol producers claim that the high cost of molasses have rendered their production uneconomical.

“They say that they might soon be left without a choice but to stop the production of bioethanol since oil companies no longer buy from local ethanol plants if the price of bioethanol is too high,” Gatchalian said.

“In fact, they are saying that there’s already a plant that is no longer producing bioethanol because of high price of molasses,” he further said.

“This situation, if left unaddressed, is expected to worsen given the growing demand for bioethanol brought about by the climbing demand for gasoline,” he added.

The senator said the JCOC, together with the Department of Agriculture and other government agencies who are members of the National Biofuels Board, will look for ways on how to meet the demand for bioethanol.

This would include mechanisms on how to efficiently grow sugarcane production which will lead to an increase in domestic molasses production, then decrease in molasses prices, decrease in bioethanol prices, and ultimately a decreased pump price for consumers.

He also said the oversight panel will explore interim solutions to provide feedstock for existing ethanol plants and will reiterate the need for increased research and development for other feedstock for the long term.

The lawmaker attributed the rising feedstock prices on the limited availability of local molasses, which is used as feedstock for more than 90 percent of bioethanol plants in the country.

According to the senator, the current price of molasses stands at ₱11,500 per metric ton, which, resulted in the increased price of bioethanol to around ₱59 per liter or higher.

He further said that data from the Department of Energy (DOE) shows that operating bioethanol plants with 365 million liters of capacity only produce 270 million liters of bioethanol.

Gatchalian stressed this figure is below the 10 percent blend requirement of 550 million liters. The DOE also noted a shortfall in molasses production, prompting the government to import 50.91 percent of bioethanol.

He also estimated that around 78 percent of total molasses produced in the crop year 2017 to 2018 alone, was used as feedstock for bioethanol. This, resulted in the domestic production of 49.09 percent of bioethanol demand.

“We plan to convene the Joint Congressional Oversight Committee on Biofuels to look into the feedstock and pricing problem, and, in the end, come up with long term solutions to this perennial problem,” Gatchalian assured.