MANILA, PHILIPPINES: A bill mandating the use of bioethanol fuel as an alternative transport fuel has been approved by the House energy committee.
Lanao del Norte Rep. Alipio V. Badelles, the committee chairman, said the proposed Bioethanol Fuel Act will go a long way in weaning the country away from overdependence on fossil fuels.
Bioethanol fuel is produced from bioethanol or ethanol. Ethanol, in turn, is produced from biomass or organic matter such as trees, crops, plant fibers, poultry litter and other animal wastes, industrial waste and the biodegradable component of municipal solid waste.
Under the bill, the Department of Energy (DoE) will adopt a National Bioethanol Fuel Program under which the blending bioethanol fuel with gasoline will be implemented.
The minimum blend will be 5% within the first two years of the measure's effectivity, increasing to 10% by the end of the fourth year of its effectivity.
The DoE is also directed to gradually phase out "harmful gasoline additives and oxygenates" within six months of the measure's effectivity.
Gasoline that will still contain these additives or oxygenates and gasohol (the gasoline-bioethanol blend) that do not follow the mandated mixture will be confiscated by the DoE.
The bill also provides fiscal incentives to encourage private enterprises to engage in bioethanol fuel production. These include exemption from paying tariff and duties on imports of inputs, machinery and equipment for 10 years, and a tax rating of bioethanol fuel equivalent to unleaded gasoline that shall remain for 10 years.
Producers of biomass sources such as sugarcane, cassava, sweet sorghum and corn will also be accorded priority when they access financing from government financial institutions such as the Land Bank of the Philippines, Development Bank of the Philippines and the Quedan and Rural Credit Guarantee Corp.
Mr. Badelles said the use of bioethanol fuel will not only be beneficial for the environment but will generate economic activity and employment in the rural areas. He noted, however, that these benefits will not be realized overnight considering the resistance among certain sectors against bioethanol fuel use.
For one, motorists will incur some cost as they will be required to retrofit their cars, he said. Two, oil firms are not likely to adopt bioethanol fuel use right away because its efficacy as alternative motor fuel is still in question.
Caltex (Phils.), Inc., in a position paper, said that "(g)iven the limited data and information about the use of ethanol as an alternative transport fuel, it is our recommendation that a more thorough study on the technical, financial and environmental aspects of a (National Bioethanaol Fuel Program) be conducted ..."
The bioethanol fuel bill has the support of the Energy department.