The dependence on imported oil is highlighted by the total importation rate of 96% to cope up with the demand.

With the rapid depletion of supply and unstable petroleum product prices, the government has started to lay the foundation for alternative sources of energy that are homegrown.

This is through the biofuels program, which is being spear-headed by the Department of Energy. A key component of the program is bioethanol, a blending of ethanol and gasoline to produce an alternative fuel called gasohol.

To fast-track the implementation of the scheme, President Gloria Arroyo launched the National Bioethanol Program in May.

For its legal framework, the proposed Bioethanol Act -- currently pending in the House of Representatives (House Bill no. 4629) and in the Senate -- has been certified by the President as urgent.

Upon its enactment, it will mandate the blending of gasoline with bioethanol as motor fuel. Within two years from its effectivity, a minimum of 5% bioethanol by volume shall be blended into all gasoline to be distributed, sold and used as motor fuel. After which, the blending will go up to 10% in the succeeding years.

To date, however, there are already a few service stations selling gasoline mixed with ethanol at 10%.

According to the Philippine Fuel Ethanol Alliance, "with the phasing in of gasoline displacement under the National Bioethanol Program starting from the use of 5% blend of ethanol in gasoline from year 2007 to 2010 and 10% blend from 2010 to 2017, a total of 3.7 billion liters of gasoline will be displaced by an equal volume of ethanol over a 10-year period. From this, a total savings in foreign exchange of $825 million over 10 years or $82 million per year will be achieved."

The Ethanol Alliance is an organization established in August 2004 to coordinate efforts of the stakeholder industries by way of information sharing and regular dialogues on ethanol.

The country needs 25 ethanol-producing plants to meet projected demand. Each plant will require P1.5 billion in investments. To entice investors, the government, through the Development Bank of the Philippines, is offering at least a P50-billion financing portfolio for renewable and indigenous-based energy projects.

The bioethanol bill also proposes fiscal and non-fiscal incentives. Fiscal incentives include a duty of 1% of all inputs, machinery, and equipment for ethanol production and a tax at a rate not more than prevailing rate for unleaded gasoline. Investors will enjoy these for 10 years from the effectivity of the new law.

CORN ETHANOL EFFICIENCY
Ethanol or ethyl alcohol can be produced from diversified carbohydrate-containing materials. To achieve sustainable energy production, agricultural products that are rich in starch or carbohydrate must be utilized as raw materials.

Corn, having 65%-70% starch/carbohydrate content, is one of the best and most efficient sources of ethanol.

Brazil and the United States are the top ethanol producers in the world. In the US, ethanol is primarily from the starch in corn grains through a fermentation and distillation process that converts sugars to alcohol. In Brazil, ethanol is primarily derived from sugar cane through the same process that converts the sugar to alcohol.

Corn has the highest ethanol yield based in the conversion factor. From 1 metric ton (MT) of corn, 398 liters of ethanol can be produced. Sugar cane comes in second with an ethanol yield of 85.05 liters for every metric ton.

Ethanol production from corn also gives important by-products. One of which is called dried distiller grains with solubles (DDGS), which is sold as a protein supplement in livestock feed.

For every metric ton of corn, 318 kg of DDGS can be derived. In the US, 318 kg of DDGS will cost a total of $25.47.

Another by-product of corn ethanol is liquid CO2. During ethanol production process, 1 MT of corn could produce 318 kg of liquid CO2, which can be collected and sold to beverage companies.

In the US, there are certain corn varieties that give higher ethanol yield than others. Pioneer Hi-Bred International, Inc. -- a major world producer and distributor of high-quality hybrid seed corn -- introduced an innovative evaluation tool that helps identify its best corn hybrids for ethanol production to help farmers and enduse markets maximize product value and profit margins.

The Pioneer whole-grain near infrared rapid assay, or testing method, is the first-ever analytical tool specifically designed to quickly quantify the ethanol yield potential of corn grain.

The rapid assay, combined with Pioneer's extensive hybrid evaluation program, enables Pioneer to identify corn genetics -- such as high total fermentables or HTF hybrids -- that are better suited for dry-grind ethanol production.

Using this information, Pioneer can recommend to customers which of its high-performing elite hybrids has potential to result in above-average ethanol production -- which may result in higher returns for its customers.

ECONOMIC BENEFITS
In general, bioethanol will benefit consumers. Bukidnon Rep. Juan Miguel F. Zubiri said the price of bioethanol will not be more than P25 a liter. This will mean that the higher percentage of ethanol blending with gasoline, the higher is the savings of motor vehicle users.

Mr. Zubiri and Reps. Alfredo D. Marañon III (Negros Occidental), Jacinto V. Paras (Negros Oriental), Ignacio T. Arroyo (Negros Occidental) and Monico O. Puentevella (Bacolod City) authored the proposed Bioethanol Fuel Act.

For the agriculture sector, production will grow the market for agricultural output.

Utilization of corn as ethanol raw material will benefit a broad economic base consisting of thousands of corn-farming families and rural-based businesses. High demand of corn grains would also help raise or stabilize its price.

This could consequently trigger an expansion of the hybrid areas in the major corn locations -- a government and private sector undertaking that has been attempted for decades with little success.

SUPPORT FOR CORN ETHANOL
On Sept. 1, the Philippine Seed Industry Association, which has 18 members coming from vegetable and corn seed companies, supported the National Bioethanol Program.

The group is also seeking for representation in the National Bioethanol Board, which will be formed once the bioethanol bill is enacted into law.

From the private sector, Pioneer Hi-Bred Philippines, Inc., a member of the association, has been actively promoting for the support of corn ethanol both within the corn industry and the government sector.

To ensure that the country meets its targeted ethanol supply in the next five to 10 years, the agriculture sector must come up with the level of productivity needed to meet local demand and at the same time provide surplus for ethanol production.

At a hybridization rate of 15% per year, there will be enough corn supply by 2008 to cope up with local demand as well as supply for ethanol production. -- Pioneer®, a DuPont Co.