Sugar industry eyes expansion amid expected ethanol fuel boom

In May, all gasoline stations are required to sell pre-blended bio-diesel from coconut called coconut methyl ester (CME).

But in two years’ time, it will be ethanol, which is derived from sugarcane, that will be placed in the market based on the bio-diesel law, said Shiva Mehrabi, Philippine Fuel Ethanol Alliance spokesperson.

The implementation of the Bio-diesel Act is expected to help clean the environment and boost the economy.

She said fuel companies are required to sell gasoline mixed with five percent ethanol starting either 2008 or 2009, then upped 10 percent in four to five years.

Mehrabi spoke at a press conference Tuesday in line with the First National Bio-Fuels Caravan with the Department of Energy, the Philippine Health Cities Coalition and other advocates.

She said the alliance, an independent coalition of stakeholders of the country’s sugar industry, saw the necessary expansion of about 300,000 hectares in three to four years’ time.

Mehrabi said they are looking at areas such as Maguindanao and the Agusan and Misamis provinces. She said it is important to spread sugar production to other provinces in line with the expansion.

But she pointed out that the basis for the building of ethanol plants, such as that in Kibawe, Bukidnon, is their proximity to core production centers to cut transportation expenses.

The Bukidnon provincial government announced last year the ethanol plant in Kibawe will be operational by the second half of this year.

Mehrabi cited other ongoing construction projects of ethanol plants in San Carlos City in Negros Occidental; Tamlang Valley in Negros Oriental, and in the province of Cagayan Valley.

Once operational, the plant in San Carlos City will be the country’s first.

Mehrabi said ethanol investors are now scouting for areas of expansion with the capacity of the industry just enough for local demand for sugar.

She said existing ethanol producers are currently importing so as not to distort local supply of sugarcane.

She said for a plant to maximize its capacity, it must produce at least 100,000 liters of ethanol everyday, which requires at least 5,000 hectares of sugarcane plantation.

The government, however, should provide the infrastructure requirements like port facilities, Mehrabi stressed.

She said if the industry reaches its target expansion area, it can even afford to export surplus production to the world market.

Mehrabi said that instead of dumping surplus production to the world market where the price is low, it is better to direct it to local ethanol requirements. (Walter I. Balane / MindaNews)