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Zubiri to propose 20% import tariff on ethanol
By Paul Anthony A. Isla
BusinessMirror
December 11, 2007
AMID a foreseeable delay in the start of commercial production of local ethanol plants, Sen. Miguel Zubiri, author of the Biofuels Act of 2006, said the law itself has safety measures that will sort of provide a buffer should local supply of ethanol be insufficient.
"The Biofuels Act of 2006 has a safety measure that when you do not have enough ethanol to supply the 5-percent mandated blend, the National Biofuels Board can recommend the lowering of the mandated blend to as low as 3 percent," the legislator told reporters in an interview.
Zubiri reasoned that what the government does not want to happen is that oil players get used to importing ethanol.
"We do not want them to just keep on importing ethanol, as it will only be suppliers from Brazil who will get rich," said Zubiri.
He added that importing ethanol will also defeat the purpose of having a mandate.
As protection for the local biofuels industry players, Zubiri said he will also propose an increase in the import tariffs of ethanol to 20 percent should local production be commercially available.
Zubiri said that a 1-percent import tariff on ethanol is imposed to jump-start the government's biofuels program.
"Importing ethanol is one of the hindrances investors see right now. They remain wary that imported ethanol is cheaper and will make their return on investments take longer route," said Zubiri.
He added that he assured prospective local ethanol producers that he will propose a 20-percent tariff on imported ethanol to protect local producers.
Zubiri noted that the Biofuels Act of 2006 mandates the use of indigenous sources as much as possible, but added that it is not a permanent provision that says an oil company must blend locally sourced ethanol.
Zubiri said that, as much as possible, the National Biofuels Board will source locally produced biofuels.
Zubiri earlier challenged the Department of Energy (DOE) to implement the law, while legislators will fully utilize their oversight functions and invite the secretary of the DOE and all the people involved for question-hour to give us a full briefing on renewable-energies program either for power or fuel, saying that there seems to have no direction on their part.
Zubiri said the failure of being able to come up with 300 million liters by 2009 is a failure of the program.
Zubiri also urged investors (who have expressed interest to put up ethanol plant) to put their money where their mouths are. "And I don't seem to understand why with the demand for 300 million by 2009 to about 600 million liters a year in 2011, they still seem to slowly drag their feet," he said.
Zubiri challenged these investors to take the plants out of their drawing boards and into their respective construction phases.
"After asking me to pass a law for them to invest, and yet now where are their investments?" he asked.
The investors have admitted difficulty in raising needed capital of P2 billion for an ethanol plant, but Zubiri said that funding is available and all they just have to do is to put everything altogether.
He added that investors have to put the financing, the production for the feedstock and the technical know-how altogether. "It's a habit for Filipinos to wait-and-see, wanting to initially see if a plant will make profit before they start investing," he said.
Zubiri said the law mandates an annual demand of 300 million liters of ethanol by 2009.
"And if there are only two plants, namely, the San Carlos plant with 30 million liters a year and the Bronzeoaks's proposed plant in Bukidnon with 45 million liters a year, that will only total to 75 million. The local ethanol industry can actually catapult the Philippines into a developed nation, and yet I don't understand why there is lack of support from the DOE in selling this program and just finding them focusing their efforts on jatropha instead of ethanol," Zubiri said.
