Zubiri urges putting up of ethanol plants in Iloilo, Capiz
Senator Juan Miguel Zubiri has urged the putting up of ethanol plants on Panay Island as he called amid the continued drop in the price of sugar and to offset the expected slack in foreign investments due to the global economic crisis.
Zubiri said stakeholders in the sugar industry especially the sugar planters should invest more in putting up ethanol plants because there are many sites in the country that are favorable for the putting up of bioethanol plants including in Iloilo and Capiz provinces on Panay Island.
Sugarcane is one of the main sources of ethanol, which is considered as a cheaper and cleaner substitute to imported fuel and other fossilized energy sources like diesel and coal.
"I hope more (local investors) will put up bioethanol plants," Zubiri told reporters at the Western Visayas Renewable Energy Congress held in Iloilo City on Friday.
The Panay Federation of Sugarcane Farmers, Inc. (PFSFI), which groups around 15,000 sugar planters on Panay Island, had earlier voiced their support to the ethanol law to encourage investors to put up plants on the island.
The ethanol plants could be built in Iloilo and Capiz, where most of the 25,000-30,000 hectares currently planted with sugarcane are located.
There are three sugar mills in Panay--one in Capiz and two in Iloilo--which can easily supply two ethanol plants.
The ethanol plants would benefit thousands of sugar cane farmers especially those owning from two to three hectares of land who compromised 70 percent of the sugar cane farmers in Panay, according to the PSFI.
Zubiri said sugar planters should group together and pour in investments on ethanol plants because of the need to boost production as mandated by the Republic Act 9367 or the Philippine Biofuels Act of 2006 which he authored.
He said there would be a big problem in producing the needed volume next year and the succeeding years.
The law provides that by February 2009, at least 5 percent ethanol shall comprise the annual total volume of gasoline fuel sold and distributed by each oil company in the country.
By February 2011, the minimum requirement for gasoline fuel sold by oil companies is a 10 percent blend.
Zubiri said this would require 300 million liters of ethanol blend by next year and 600 million liters by 2011.
But he said ethanol plants in San Carlos City in Negros Occidental and in Ormoc City can only produce a total of 40 million liters annually.
"We (still) lack 260 million liters," said Zubiri.
He said production should be increased significantly to avoid the importation of biofuel from Brazil and Thailand.
"That is completely opposite of what I wanted (in pushing for the law). Filipino farmers should benefit," said Zubiri.
A complete ethanol plant costs around P1.5 billion but existing sugar mills could be converted with an investment of P500 million.
He said sugar planters should also consider bioethanol production as an alternative because of the slump in sugar prices in the world market now pegged from P500 to P600 per 50-kilo bag.
He said the continued slump in sugar prices could result to more unemployment of sugar planters.
Local investors should also pick up the expected slack in foreign investments due to the global economic crisis, according to Zubiri.
He said at around three ethanol plant projects have been affected by the pullout of funders from New York because of the crisis.
Zubiri said they are currently negotiating with local banks to help with the financing of projects in the biofuel industry.
He pointed out that investments in the industry would be sound because of the expected large domestic demand in the coming years.
Locally-produced ethanol is also competitive with gasoline because it is cheaper than unblended fuel.
He said the availability of Flex-Fuel Vehicle (FFV), which could use both blended and unblended fuel, could also hasten market growth for ethanol.
Prospects are also bright for export of ethanol to Japan, China and India, according to Zubiri.