The Confederation of Sugar Producers Associations (CONFED) warned on Thursday, March 19, against a proposed Senate measure that would allow the unchecked importation of biofuels.
The move would bypass local supply protections and devastate a sugar industry already reeling from low millgate prices and rising production costs, a CONFED statement said.
Their opposition centers on a substitute Senate bill proposing an amendment to the Biofuels Act of 2006.
The measure seeks to “allow the importation of biofuel components such as bioethanol and biodiesel regardless of the supply level of locally produced biofuel components, if the price of blended gasoline and/or diesel engine fuels is higher by at least 5 percent compared to pure gasoline and/or diesel engine fuels.”
The approval of the amendment will cause additional damage to the sugar industry, which at present is suffering from the effects of low millgate prices, CONFED President Aurelio Gerardo J. Valderrama said in a letter sent to Senate President Vicente Sotto III on Wednesday, March 18.
“CONFED maintains that no importation should be done for as long as there is local supply,” he said.
Under the Biofuels Act, “all liquid fuels for motors and vehicles sold in the Philippines shall contain locally-sourced biofuels components” at an initial blend of 5 percent bioethanol for gasoline and 1 percent biodiesel for diesel, subject to increase in blend percentage upon recommendation from the National Biofuels Board, Valderrama said.
Presently, the mandated blends are 10 percent for bioethanol and 3 percent for biodiesel, he added.
CONFED already submitted its earlier position on proposed amendments contained in Senate Bill No. 1485 and Senate Bill No. 1965, he said.
These bills seek to empower the President “to suspend the implementation of the mandatory biofuels blend for not longer than one year, if the price of blended gasoline and/or diesel fuels will be higher by more than 5 percent compared to the price of pure gasoline and/or diesel,” Valderrama said.
CONFED reiterated its opposition to both the suspension of the mandatory blend and the new amendment allowing oil companies to import biofuel components regardless of local supply levels.
The Biofuels Act currently states that oil companies may only import in the case of a shortage of locally-produced bioethanol, and only to the extent of that shortage. Uncontrolled importation, CONFED stressed, would result in a loss of demand for molasses—the main feedstock for local bioethanol—and a corresponding loss of substantial income for already beleaguered sugarcane farmers.
CONFED also objected to a proposed amendment that would transfer the management of tariffs and taxes earmarked for social amelioration programs from the Department of Labor and Employment (DOLE) to the Department of Social Welfare and Development (DSWD). DOLE presently oversees these programs, which are designed to benefit workers and farmers within the industry.*
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