Jatropha

International Symposium on Agricultural and Biofuel Policy – Presentation by the Philippines (Summary)

Date: 25 February 2008 Venue: Bangkok, Thailand

Ms. Mercedes S. Fernando, Senior Agriculturist, Department of Agriculture, Bureau of Soils and Water Management, Philippines Environmental issues have commanded top priority on the international agenda, escalating efforts in the search for renewable and alternative energy sources. Given the wild fluctuations in crude oil prices, the Philippine Government estimates it will save about US$22 million per year with the use of a 1% coco-methyl ester blend and US$179 million with a 5% ethanol blend. The Philippine National Standard for coco-diesel is scientifically proven to result in 30-60% lower diesel emissions. Carbon dioxide is likewise reduced by three kg for every liter of biodiesel use. Additional advantages of biodiesel are that it is safe to handle and transport, is biodegradable, and is 10 times less toxic than table salt. It is also cost effective. Even a 1% blend can result in substantial monetary savings while contributing to national energy conservation efforts. Additionally, a 1% biodiesel blend does not require engine modification for cars, motorcycles, pump boats and hand tractors. A bioethanol blend up to 10% is capable of operating without any engine modification. The Philippines is ideal for biodiesel production for several reasons. With more than 30 varieties of energy plants, trees and shrubs, in addition to idle lands and superior bioscience technology infrastructure, the domestic market is large enough to sustain a biofuel industry and its various byproducts. There are, however, hurdles that need to be overcome, in terms of available financing and lack of industry partnerships. At present, local demand for coco-biodiesel or Coco Methyl Ester (CME) in the Philippines is estimated at 980,000 liters per year while the existing capacity for producing coco-biodiesel is estimated at 256.9 million liters annually. These supplies come from six firms accredited by the Department of Energy and two firms with provisional accreditation to produce CME. Jatropha is the feedstock of choice for cultivation in identified areas of the country. In collaboration with the Philippine Army, the Philippine Fuel Corporation jointly established a plantation at Fort Magsaysay, Nueva Ecija and a nursery in Ligao, Albay in Southern Luzon. At present, there is no local production of bioethanol fuel, however

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the San Carlos Bioenergy Project is scheduled to be operational this year, which will have a capacity of 100,000 liters per day or 30 million liters per year. The Philippine Biofuels Act of 2006, approved by President Arroyo on January 12, 2007, mandates that all liquid fuels for motors and engines sold in the Philippines must contain locally sourced biofuel components: 5% bioethanol in gasoline fuel-fed engines within two years of affectivity of the Act, to rise to a minimum of 10% within four years, and 1% biodiesel by volume in diesel-fed engines within three months of affectivity of the Act. The law also provides incentives to investors, such as a zero-specific tax for local and imported biofuel components. Gasoline and diesel-fuel components shall remain subject to the prevailing tax rate. In addition, the sale of raw material used in the production of biofuel, such as, but not limited to, coconut, jatropha, sugarcane, cassava, corn and sweet sorghum, are exempt from the value-added tax (VAT). Biofuel development will be conducted on the two million hectares of idle lands to be identified for agribusiness development and job creation under the 2004-2010 Medium-Term Philippine Development Plan. This area will be culled from a total of six million hectares of idle lands that are rated highly suitable for biofuel development. Several areas of improvement and future development have been identified, including further assessment on the effects of using degraded lands on ecological, social and economic situations in different regions; consideration of the risk involving biomass production, such as the loss of biodiversity, increase in water consumption and potential water contamination; threat to wildlife species and deforestation; net greenhouse gases (GHG); emission gains and concern over the rights of the indigenous and local people. An internationally accepted standard for biomass production should be adopted to ensure the preservation of land, air, water and benefits to all of humanity. Following the presentation, a question was posed to Ms. Fernando regarding the difference between using coconut and jatropha to produce biodiesel in terms of cost effectiveness and the quality of biodiesel. She explained that similar to palm oil, all parts of the coconut are used in the production of coconut oil. An increase in the variety of uses, coupled with a decrease in production area have prompted the pursuit of additional sources of biodiesel. Jatropha is being recommended not only in the Philippines, but in other research institutions, including Icrisat.

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Concerning jatropha, a request for clarification on the collaboration with the Philippine Army was made. Ms. Fernando advised that there was a partnering scheme between the Philippine National Oil Corporation and the Army to establish an additional 1,000 hectares inside Fort Magsaysay Camp in Nueva Ecija. They invite interested parties from the private sector to participate, and provide technology and training on maintenance and management. A participant asked about property ownership rights for foreign corporations in the Philippines, particularly in the context of owning farmland for biofuels production. The speaker advised that only Philippine nationals could own property, so if a foreign corporation wanted to establish a business, they would need to lease the land, or form a partnership with a locally-based enterprise. The final question concerned restrictions on farmers’ production, noting that if the biodiesel industry became successful in the Philippines, perhaps all the farmers would convert their agricultural lands to produce biodiesel feedstocks. Ms. Fernando explained that there was a law mandating that only idle and marginal land could be used in the production of energy crops. No additional land previously allotted for agricultural production of food crops can be converted for biofuels development.

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