Bioethanol investments in Philippines may double next year

The Philippines' National Bioethanol Board (NBB) says the future of the bioethanol industry in the country looks promising, as local and foreign direct investments in the sector have grown from $206 million in 2012 to $386 million in 2015.

Investments are projected to double to $770 million in 2016.

‘When the policy guidelines on the utilization of locally-produced bioethanol was passed in 2011, bioethanol investments in the Philippines were reinvigorated,’ says Regina Martin, NBB vice-chairman on bioethanol concerns and Sugar Regulatory Administration (SRA) administrator.

Martin says investments in bioethanol are growing year on year and working capital in bioethanol operations has sustained the dynamic of the rural economy.  

‘Jobs are sustained, upstream and downstream small scale enterprises have emerged, giving new livelihood opportunities for the local community surrounding the bioethanol plant. Annual benefits are received by workers and their families through the social amelioration and welfare program,’ Martin says. 

According to the NBB, various policy changes, such as gasoline bioethanol mandates, the movements of investors and producers, and sourcing issues have affected the industry.

‘The biofuels law was enacted in the latter part of 2006 and became effective in 2007, but the 5% and 10% bioethanol mandates were implemented in 2009 and 2011, respectively, to give enough time for bioethanol investors to consolidate feedstock areas and construct the bioethanol plant,” Martin says.

‘Out of the roughly $2 billion (appr. €1.7bln) contribution of the sugarcane industry to the national economy, bioethanol sector stood at around $163 million or 6%. In 2014, savings of about $75 million were realised due to the displacement of fossil fuels with bioethanol, not counting their environmental contribution of reducing greenhouse gas emissions,’ she adds.

Martin says some 420,000 hectares of land are planted with sugarcane, benefitting more than 75,000 farmers and more than 700,000 workers, of which 20,000 are working for the bioethanol sector. 

Block farming has increased the yield of sugar with the consolidation of the management of small farms with an area of less than 5 hectares into a bigger but contiguous unit of at least 30 hectares to improve farm productivity while individual ownership is preserved.

The use of block farming has increased sugarcane production, which has in its turn boosted the income of small farmers by $580 per hectare.

The farmers’ income increase directly translates to a rise in economic activities in the countryside, and industry revenue has the potential to increase from the present $2 billion to about $2.3 billion.

Martin says the Filipino bioethanol industry may be as competitive as that of international biofuel giants, such as Brazil, which is the world’s second largest producer of ethanol fuel with 21.1 billion litres average annual production.