THE Department of Energy (DoE) said it suspended the planned increase in the coco methyl ester (CME) component of biodiesel, citing the potential impact on pump prices.
In an advisory dated July 17, the DoE informed the downstream oil industry, biodiesel producers, and other stakeholders of the suspension of the CME hike in the biodiesel blend.
The increase to 4% biodiesel blend (B4) was due to be implemented on Oct. 1, going to B5 a year later.
National Biofuels Board (NBB) issued a resolution in May to suspend changes to the biodiesel blend due to “anticipated significant impact on pump prices and the potential inflationary effects on the national economy.”
Energy Undersecretary Alessandro O. Sales said last month cited the current high cost of coconut oil, a primary feedstock for CME.
Mr. Sales said that the global price of coconut oil at the start of the year was about $1,100 per metric ton. This increased to over $3,000 per metric ton at the time of the NBB decision.
“Moving forward, the NBB shall regularly assess and recommend appropriate market interventions to help stabilize the price of biodiesel and its feedstock,” the DoE said.
The DoE will issue a directive to resume the upward adjustments once the NBB gives its approval.
The Biofuels Act of 2006 requires that all liquid fuels for motors and engines contain locally sourced biofuel components.
Under the law, the NBB is tasked with monitoring the implementation of the National Biofuel Program as well as the supply and usage of biofuels and biofuel blends.
The CME blend in diesel was raised to 3% on Oct. 1, 2024 from 2% previously. The blending of biofuels was originally intended to decrease dependence on imported fuel, reduce greenhouse gas emissions, and support the biodiesel industry. — Sheldeen Joy Talavera