Ethanol import terminal proposed at Subic Freeport

In case the apparent supply shortage stays unresolved, an alternative plan to establish an ethanol import terminal is being proposed at the Subic Freeport in Zambales.

The proposal came out in previous discussions among industry stakeholders as they fleshed out solutions to the lingering dilemma of ensuring domestic ethanol supply to meet demand jump during the prescribed full implementation timeframe for E10, or the 10-percent ethanol blend to gasoline.

Based on documents secured from the Department of Energy (DoE), it was indicated that “importation guidelines are being reviewed to consider Subic freeport as an import terminal.” No specific proposals as to how the project be carried out and if the undertaking will be government-underpinned or if it will be aligned as a private sector venture.

While the law stringently prescribes that oil companies must source at least 5.0 percent of their supply from local sources, they are still given leeway to secure the balance from importation for their E10 compliance if domestic ethanol production is scant.

Despite the edginess of the situation, it was nevertheless proposed that there must be “improvement on logistics… to make local ethanol competitive with imported.”

By next year, the government is only counting on three domestic ethanol facilities to meet part of the demand.

Without supply augmentation, the industry’s necessary recourse would be importation.

Currently identified as ethanol import sources are Brazil and Thailand. The local producers though are batting for a tariff shield to make ethanol venture in the country attractive to investors.

The National Biofuels Board (NBB) is currently reviewing forward policy directions as to the E10 mandate, which the law prescribes in place starting next year.

Beyond supply concerns, there are more problems that the government and industry stakeholders would need to resolve on the ethanol mandate.

One of the energy department’s responses would be to issue clear guidelines and housekeeping rules that the industry and end-users must adhere to, so that the implementation will not turn out awfully problematic.

For instance, there have been issues raised as to the lack of mechanisms and strategies to inform and assist the motoring public in coping with the negative effect of E10 gasoline on non-compliant vehicles.

The DoE acknowledged that more focused on information campaign is needed, especially since the wider E10 mandate is now just around the corner. Manila Bulletin