USDA flags potential biodiesel shortage due to rising coconut oil exports
The USDA has raised concerns about a potential biodiesel shortage in the Philippines due to shrinking local supplies of coco methyl ester (CME), driven by rising coconut oil exports. With CME prices increasing and coconut oil output expected to drop by 15% for the 2024/2025 season, biodiesel costs are rising. The Philippine Department of Energy has mandated an increase in biodiesel blends, further boosting demand. The Philippine Coconut Authority aims to expand coconut farming to address the feedstock shortfall.
The United States Department of Agriculture (USDA) has expressed concerns about a possible biodiesel shortage in the Philippines, which may result in higher fuel prices.
In a report by Manila Bulletin, the USDA Foreign Agricultural Service (FAS) revealed that the local supply of coco methyl ester (CME), an essential biodiesel component, is shrinking due to rising coconut oil (CNO) exports.
The USDA FAS noted that CNO producers are prioritizing overseas markets where they can fetch better prices, leading to a reduced domestic supply.
This has pushed CME prices from Php 57 per liter in 2021 to between Php 90 and Php 95 per liter in 2024, driving up biodiesel costs.
The USDA FAS also predicted a 15% decrease in coconut oil output for the 2024/2025 season, further limiting CME availability.
The Department of Energy (DOE) has already mandated a gradual rise in the biodiesel blend for diesel fuel.
Starting on October 1, 2024, diesel must contain at least 3% CME (B3), up from the previous 2% (B2).
Industry estimates show that the new mandate will raise biofuel demand, requiring an additional 450 million liters.
The mandate is set to increase to 4% (B4) in October 2025 and 5% (B5) in October 2026.
The USDA FAS said that an additional 900 million coconuts would be needed to produce around 100-120 million liters (88,000-105,000 MT) of CME to meet a 1% increase in the blend requirement.
In response, the Philippine Coconut Authority (PCA) has outlined several strategies to address the biodiesel feedstock shortfall, including expanding coconut farms, which currently cover 3.6 million hectares and house about 300 million trees.
Source Link : https://powerphilippines.com/usda-flags-potential-biodiesel-shortage-due-to-rising-coconut-oil-exports/
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