Chemical manufacturer D&L Industries Inc. said the government’s plan to mandate the increase in coco-biodiesel blend to 3 percent presents “huge growth opportunities” for the company.
In an interview, D&L President Alvin D. Lao said the increase would mean that demand would go up automatically by 50 percent.
“So the effect on volume and margin, we expect that it will be substantial.”
The Biodiesel Law was passed in 2006 and the mandated blend of B1 was imposed in 2007 then raised to B2 in 2009. The law mandated the use of only biodiesel using coconut oil as feed stock for the production of coco-methyl ester (CME) or coco-biodiesel.
“Everyone in the industry expected the planned increase to 5 percent to proceed as scheduled but the blend was frozen at 2 percent from 2009 until today. However, biodiesel manufacturers like us had already increased capacity in preparation for the B5 blend,” he said.
“So, if you look at the biodiesel industry, we’re actually ready to provide even up to the 5 percent blend. What that means is the capacity to supply is the 5 percent blend, but the actual demand is only a 2 percent. So you have roughly 40 percent utilization,” he said.
The government is reportedly planning to implement the increase in biodiesel blend to 3 percent or B3 by July next year and to increase this further by 1 percent per year until it reaches B5 by 2026.
D&L, through its subsidiary Chemrez, is the biggest player in the biodiesel industry with a biodiesel plant that produces consistently high-quality CME.
Benefits of a higher biodiesel blend include lower pollution, import substitution, value adding of coconut oil and mileage improvement.