Advanced BioFuels USA

(U.S. Grains Council/Ethanol Producer Magazine)  The U.S. Grains Council recently led a delegation of industry leaders representing the USDA, Renewable Fuels Association, and Growth Energy to the Philippines to assess factors contributing to the large exports of U.S. ethanol to Southeast Asia and evaluate future opportunities for growth.
The Philippines represents one of the few markets in the world that is truly short on ethanol. Last year, the country imported 194 million liters (51 million gallons) of U.S. ethanol, making it the second largest market for the product after Canada.
The mission focused on three targets: local industry, commercial interests and government. The team met with private equity, oil companies, traders, ethanol plants and government officials to learn more about the dramatic increase in ethanol imports into the Philippines.
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The Philippines has a very functional and strictly enforced biofuel mandate, thanks to its National Biofuel Board, which meets once a quarter with gasoline companies and ethanol producers. In this system, the ethanol producers announce their production expectations, which are used to create their obligations for downstream gasoline distributors. Then the spread between the 10 percent mandate and local production is distributed across the industry based on historic market share, and blenders obtain import permits to make up the shortfall.
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Currently, molasses and sugar syrup are the feedstocks of choice for ethanol producers in the country, which are less cost effective for ethanol producers. As a result, locally-produced ethanol is actually sold at a premium to retail gasoline.
One Philippine ethanol producer told the team visiting this week he can sell his ethanol for around 49 pesos per liter ($4.13/gallon), FOB plant, while the nearby gas station is selling retail gasoline for 43 pesos per liter ($3.65/gallon). With imported ethanol at virtually half the price of locally-produced, there is remarkable leverage to maintain an import program and save the consumer money at the pump.
Additionally, the Philippine Department of Energy has ambitious plans to continue to ramp up ethanol blend rates to achieve E20 by 2020.
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This week’s ethanol mission and two earlier missions to Latin America, Japan and Korea were made possible when the USDA announced earlier this year that ethanol exports could be promoted under the Market Access Program. This program, part of the U.S. farm bill, provides cooperative funding for U.S. agricultural export promotion initiatives around the world.   READ MORE and MORE (BusinessWorldOnline) and MORE (Manila Standard Today)