The coconut industry is seeking the immediate increase in biodiesel blending to 5 percent after President Ferdinand Marcos Jr. issued directives to push value adding to coconut products.
United Coconut Association of the Philippines chairman Dean Lao Jr. said the push was directed to the Private Sector Advisory Council which was tasked to help the industry increase output and export potential.
“What they were thinking is to increase value adding by increasing the amount of biodiesel blending to 5 percent. At present we are at B2 [2-percent blend],”he said in a news briefing during the opening of the 2-day International Coconut Congress at the World Trade Center Wednesday.
Lao said the proposal would also mean foreign exchange savings for the Philippines.
“The B5 program is 280 million liters of CME additional volume on top of B2. The displaced diesel is the same volume. If the value of imported diesel is at P50/liter, then the forex savings will be P14 billion. This saving is also directed to our coconut industry,” he said.
Lao said the Philippine Coconut authority has, time and again, assured that the country has enough CNO to produce coconut methyl esther–a derivative of coconut oil, to support B5. However, the increase was pushed back several times because of the pandemic.
The PCA said it could support increased blending up to B12 or B15. The Biofuels Act or Republic Act 9367 allows biodiesel blending of up to 5-percent CME and 95-percent regular diesel.
CME is the ester derivative of coconut oil that has been converted to a diesel-like product after its glycerin content has been separated through the process of “transesterification”.
The PCA said the coconut industry needs to increase its production.
“We need to increase yield to maintain our standing as world’s top exporter. We are now overtaken by Indonesia and soon, if we don’t do anything, we might be overtaken by India, as well,” said PCA administrator Bernie Cruz.
Records show that coconut exports declined by more than half from $1.04 billion in the first four months of 2022 to $490.16 million in the same period in 2023.
The global coconut products market was valued at $20.24 billion in 2022 and was expected to expand at an annual growth of 8.4 percent from 2023 to 2030.
The Philippines produces about 15 billion coconuts, or 3 billion short of the ideal 18 billion nuts to increase value adding.
About 3.6 million hectares are planted to coconut, about 26 percent of the country’s total areas dedicated to agriculture. About 2.5 million farmers are dependent on coconut farming for livelihood.