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PCA calls on NBB to raise CME content in Philippine diesel blend

The Philippine Coconut Authority (PCA) is calling on the National Biofuels Board (NBB) to raise the Coco Methyl Ester (CME) content of biodiesel currently sold in the domestic market from 2 percent to 5 percent.
“The increase could effectively support our coconut farmers and farm workers whose livelihoods are threatened by the declining prices of crude coconut oil (CNO) in the international market,” said Romulo J. de la Rosa, PCA Administrator.

Coconut (Cocos nucifera) is a large palm found throughout the humid tropics and is tolerant of saline and other conditions considered to be marginal for many other crops.

Coconut (Cocos nucifera) is a large palm found throughout the humid tropics and is tolerant of saline and other conditions considered to be marginal for many other crops.

The price of crude coconut oil (CNO has declined by over 40 percent in the last few months because of a glut in supply in the world market of vegetable oils. From a high of US$1 850 per tonne, it was selling at its 16-month low of US$1 100 per tonne last week.

According to De la Rosa, the weakening world prices for copra and CNO could further reduce the already low income of coconut farmers and farm workers in the country. The increase in the CME content of diesel can be undertaken on a staggered basis.

The first increase can be from two percent to three percent starting August 1 this year. This means that the biodiesel blend to be sold in the domestic market should have three percent CME and 97 percent regular diesel starting August 1, he said.

Philippine biodiesel has the lowest percentage of vegetable oil blended to regular diesel among Asean countries. Malaysia and Thailand mandate that the biodiesel sold in their markets should contain at least seven percent palm oil. Indonesia’s is much higher, at 20 percent.

The recommended August 1 deadline to increase the biodiesel CME content to three percent gives oil industry players ample time to procure their CME supplies and reset their blending ratios. The PCA is also pushing the NBB to decide before December 2018 whether to further increase the blend to five percent CME content or maintain the three percent until 2020.

Under the Philippine Energy Plan 2012-2030, Philippine biodiesel should contain at least five percent CME by 2020.

The higher CME content in our biodiesel could significantly increase the demand for copra and CNO, making their prices more buoyant, De la Rosa said.

He also assured oil industry players that the country has sufficient CME manufacturing capacity to support the proposed increase in the biodiesel blend. De la Rosa urged the NBB to act fast before copra and CNO prices further plummet to crisis level.

The coconut industry needs policy action now, De La Rosa stressed.

The PCA is a government agency that is tasked to develop the industry to its full potential in line with the new vision of a “united, globally competitive and efficient coconut industry.”

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