MANILA, 4 November 2007— At least 15 local and foreign companies have expressed interest in investing in biofuel crops, an emerging industry that is expected to generate jobs for tens of thousands of Filipinos, according to the Department of Agriculture (DA).
Marriz Agbon, head of the DA’s Biofuel Feedstock project, said in a report to Agriculture Secretary Arthur Yap that the proposed deals will involve planting of biofuel feedstock such as sugarcane, cassava, jatropha, corn, oil palm and coconut.
Initially, a total of 725,300 hectares of land are needed for the project, which requires an investment of 34.085 billion pesos ($770 million), she said.
The report said it was still premature to name the 15 companies, but added that local groups are currently negotiating with foreign investors from Australia, Japan, the United States, China, United Kingdom, Germany and India.
It said a total investment of P19.185 billion has been projected for the agricultural side and P14.9 billion on the processing plant or infrastructure side.
Eyed as sites for these plants are the Ilocos, Cagayan Valley, Western Visayas, Zamboanga Peninsula, Northern and Southern Mindanao and the Davao regions, either through straight purchases, lease arrangements, contract growing or joint ventures.
Yap said that the global demand for crops-based alternative fuels stand to energize Philippine farms, increase the profitability of small stakeholders in the agriculture sector, and reduce the country’s dependence on imported energy sources. He said farmers would earn more through profit-sharing, guaranteed income packages or straight purchases of harvested crops, and benefit from new planting technologies that will create more jobs and boost production.
The DA is among the agencies tasked to promote the development of the new industry, as mandated by the Biofuels Act signed by President Gloria Macapagal Arroyo early this year “to ease the country’s addiction to imported, dollar-draining and pollution-generating petroleum products.”
Many other countries, notably China, India, Thailand, Indonesia and the United States, are also developing their biofuels industry in view of the rising price of oil, which reached $96 per barrel over the weekend.
The Biofuels Act requires the preblending over a specific period of one percent coco methyl esther (CME) or coco biodiesel in diesel-fed vehicles and five percent of ethanol in gasoline-fueled ones.
A report of the Asian Institute of Petroleum Studies Inc. said the Philippines in projected to save P17.3 billion a year in reduced fuel consumption as a result of the enactment of the Biofuels Act.
At the same time, the new industry is expected to result in high incomes especially for the country’s 3 million coconut farmers and 56,000 sugarcane farmers, with sales of coconut diesel to oil companies projected at P3.5 billion a year.
Studies by the Philippine Coconut Authority showed that with the local consumption of diesel pegged at seven billion liters a year, the Philippines will need at least 70 million liters of coconut biodiesel.
