DOE CLARIFICATION ON THE FEDERATION OF PHILIPPINE INDUSTRIES' PROPOSAL TO INCLUDE PALM OIL IN THE COUNTRY'S FUEL MIX

December 2, 2021

The Department of Energy (DOE) would like to clarify that it has not approved the proposal of the Federation of Philippine Industries (FPI) allowing the use of palm oil in the country’s fuel mix, contrary to what has been published in a couple of news articles over the weekend.

In a letter to the DOE dated 4 October 2021, the FPI recommended exporting coconut oil so that local farmers could reap the corresponding benefits of its current high price in the world market. They likewise proposed for the country to use the cheaper palm oil as an alternative for biodiesel production.

The Department set a virtual meeting with the FPI to discuss their proposal in detail. During the meeting, the FPI suggested using cheaper palm oil as feedstock for a lower biodiesel price, and asked that the Philippine National Standards be prepared to accommodate palm oil as biodiesel feedstock.

For its part, the DOE emphasized that a thorough technical study should first be conducted, particularly on the development of standard specifications for biodiesel from palm oil. The DOE also informed the FPI that under Republic Act 9367 or the Biofuels Act of 2006, only locally-sourced biofuel components shall be used in the biodiesel-blend mandate.

The Department also stated that the group’s proposal shall be elevated to the National Biofuel Board, (NBB) through its Biodiesel Committee (NBB-BDC), for a comprehensive evaluation and recommendation. The NBB-BDC is composed of the DOE, Philippine Coconut Authority, Department of Science and Technology, Department of Labor and Employment, and the Department of Trade and Industry.

Furthermore, the DOE still needs to validate the figures presented by the FPI, specifically the Rotterdam price comparison of crude palm oil (CPO) and crude coconut oil (CNO). The FPI has committed to provide the pertinent data to support its proposal, such as the latest historical price of CPO and CNO in the world market, as well as the actual production of CPO and CNO in the Philippines, including exported CNO volume and imported CPO volume.

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