Ethanol production in the Philippines expected to increase

By Matt Thompson | January 31, 2020

The USDA’s Foreign Agriculture Service’s annual biofuels report for the Philippines says the country is poised to produce more ethanol in 2019 and 2020 than it did in 2018. The increase, the report says, is due to more efficient utilization of the country’s production capacity. It also notes there are two plants currently under construction in the Philippines that are expected to begin operations this year.

One of the challenge’s for the ethanol industry in the Philippines, the report notes, is the availability of feedstock. Much of the country’s ethanol is produced using sugarcane, and according to the report, the country “has one of the lowest average sugarcane yields in Asia.” The country’s ethanol industry has been in transition to using molasses, however an increase in sugar prices—and consequently molasses prices—can be an issue for producers. “Close to 80 percent of total molasses in the country is used for ethanol production,” the report says. “A proposal to import molasses to augment local feedstock supply is being studied at the Philippine Senate as local ethanol producers can only import molasses when approved by the [Sugar Regulatory Administration].””

The country’s 10 percent ethanol blend is mandated by federal law. The goal was to move to an E20 blend by 2020, however that effort has been stymied by limited investment in new production facilities and infrastructure, among other issues. The report says the DOE’s Philippine Energy Plan recommends maintain the E10 mandate for 2019, and reviewing long-term plans, taking into account feedstock availability.

“The quota allocation scheme of locally produced ethanol, domestic feedstock limitation for local fuel ethanol production, and efforts to maintain E10 combine to make the Philippines one of the most open economies for ethanol imports,” the report says. FAS says it expects the Philippines to import more ethanol than it did in 2018. While 2018’s imports were all from the U.S., the report says it expects more ethanol to be imported from other countries like Korea in 2019.