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Philippines
SENATE OKAYS BIO-FUELS BILL
Bill mandates 5 percent bioethanol fuel blend
by Butch Fernandez (Reporter)
12-October-2006 BusinessMirror
 

Beating its self-imposed deadline, the Senate passed by a 19-0 vote on third reading on Wednesday night its version of the Bio-Fuel Bill requiring a minimum 5 percent bio-ethanol fuel by volume to be blended in all gasoline sold in the country within two years upon its enactment into law.

It also mandates a 10 percent blend of bio-ethanol gas sold at pump stations within four years upon effectivity of the proposed law.

Senate President Manuel Villar said a bicameral conference committee will work on reconciling conflicting provisions in the Senate and the House-approved bio-fuel bills during the three-week recess in the hope that they could ratify the final version and submit this to President Arroyo for signing into law shortly after Congress resumes sessions on November 6.

In voting for the measure, Senate minority leader Aquilino Pimentel said studies by energy experts show that at a 10 percent mandated ethanol blend, the country can reduce its gasoline importation by as much as 100 million liters annually, that will translate into a $100-million savings in foreign exchange yearly or $1 billion in 10 years.

Under the Senate version of the bill, the importation of machinery and equipment to be used exclusively for the production of bio-fuels shall be exempt from import duties for a period of five years from the date the companies were accredited by the Department of Energy. Likewise, bio-fuels shall have a zero specific tax.

All investments in the production, blending and distribution of bio-fuels and adoption of bio-fuel compliant vehicle technologies shall enjoy the applicable fiscal and non-fiscal incentives as may be provided for under the Omnibus Investment Code. As provided in the bill, government financial institutions, such as the Development Bank of the Philippines, Land Bank of the Philippines, Quedancor and similar other government institutions shall accord high priority to extend financing to entities that shall engage in the production, storage, handling and transport of bio-fuel including the blending of biofuels with petroleum.

The Senate version of the proposed Biofuels Act will grant state incentives to manufacturers of ethanol, diesel and other forms of so-called green fuel that will lessen the country's dependence on oil and other fossil-based fuel. Incentives will also be granted to makers of flex-fuel vehicles. Noting that the country imports $3.9 billion worth of crude oil and petroleum products a year, Pimentel said the shift to biofuels will not only save enormous amounts of foreign exchange but also alleviate pollution and provide cleaner oil for the people to breathe.

Sen. Edgardo Angara, a cosponsor of the biofuels bill, pointed out that a country like the Philippines that imports 94 percent of its annual oil requirements is "one that is at the mercy of constant world price hikes."

Angara added that this year alone, domestic consumption of oil is expected to reach 126 million barrels. Based on Department of Energy figures, 52.2 percent of total energy supply comes from oil and coal; geothermal power 21.1 percent; biomass 16.8 percent; and natural gas 4 percent.

However, energy sourced from renewable sources like ethanol, coco-diesel, solar, wind and hydroelectricity accounts for only 0.8 percent.

Angara said not one country dominates the biofuels market. "This is all the more reason why we need to realize that increasing usage of bio-fuels, including diesel and ethanol, is feasible. It is inexhaustible, and the technology being developed for its utilization would allow conventional sources to be replaced in full across the entire range of energy sources."

"The Biofuels Act of 2006 is timely because it can serve as the official policy for alternative sources of energy in the transport sector, even if faced with a variety of challenges, like environmental concerns," Angara asserted.

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