The Joint Congressional Oversight Committee on Biofuels will dig deeper into the feedstock and pricing problems that continue to plague the biofuels industry in the country when the 18th Congress opens, Senator Win Gatchalian said.
Gatchalian, chairman of the Senate Committee on Energy, made the statement after hearing the complaints of ethanol producers who said they were now having a tough time supplying bioethanol as the skyrocketing prices 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.”
“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.
Gatchalian said the oversight committee, 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 efficiently grow sugarcane production leading to an increase in domestic molasses production, decrease in molasses prices, decrease in bioethanol prices, and ultimately a decreased pump price for consumers – all while meeting the demand for bioethanol.
The committee will also 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, he added.
The lawmaker blamed the rising feedstock prices on the limited availability of local molasses, which is used as feedstock for more than 90% of bioethanol plants in the country. The current price of molasses stands at ₱11,500 per metric ton, which, according to Gatchalian, resulted in the increased price of bioethanol to around ₱59 per liter or higher.
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% blend requirement of 550 million liters. The DOE also noted a shortfall in molasses production, prompting the government to import 50.91% of bioethanol.
In crop year 2017 to 2018 alone, Gatchalian estimated that around 78% of total molasses produced was used as feedstock for bioethanol and thus resulting in the domestic production of 49.09% 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,” the lawmaker said.
