Seaoil solidifies plans to put up ethanol plant

Seaoil solidifies plans to put up ethanol plant

FOLLOWING the passage of the Biofuels Bill at both houses of Congress, independent oil firm Seaoil Petroleum Corp. has firmed up plans to put up an ethanol plant.

In an interview, Seaoil president Glenn Yu said the passage of the bill was the only thing that the oil firm was waiting for before drafting a more concrete plan to put up its own refining plant that can produce 100,000 liters a day of ethanol.

The ethanol produced from either sugarcane or cassava is blended with gasoline to produce cleaner fuel.

Earlier in the year, Yu said Seaoil’s plan to establish its own ethanol production facility was contingent on the passage of the Biofuels Bill into a law, as this would create a market for ethanol-blended gasoline.

Under the Biofuels Act of 2006, all gasoline products should have an ethanol content of at least 5 percent within two years of the effectivity of the law.

All diesel-fed vehicles, on the other hand, should use a minimum 1-percent biodiesel blend within three months of the law’s effectivity.

The mandated blend will rise to 2 percent for biodiesel after two years, and to at least 10 percent for bio-ethanol after four years.

Apart from the ready market for biofuels that the law creates, the Biofuels Act of 2006 also provides incentives for the production, distribution and use of locally produced biofuels.

These include exemptions from the specific and value-added taxes, as well as financial assistance from government financial institutions.

Even without a law on biofuels in place, Seaoil in August last year became the first oil firm in the country to sell gasoline pre-blended with ethanol directly from its pumps.

Because it had no local ethanol facility in place, Seaoil sourced its requirements from Brazil, the world’s most cost-efficient ethanol producer.

British firm Bronzeoak Ltd., through local arm Bronzeoak Philippines Ltd., has tied up with National Development Corp. to establish the San Carlos Bio-Energy Inc. plant, an integrated facility that will produce some 100,000 liters of bio-ethanol a day.

It will also have a cane milling plant with a throughput capacity of 1,500 metric tons of cane daily, as well as a co-generation power plant that will produce around 9 megawatts (MW) of power, of which 4 MW will be sold to the grid.

It should start commercial operations by next year or early 2008.

According to the Philippines Fuel Ethanol Alliance, the passage of the Biofuels Bill will generate a guaranteed annual demand of between 200 million and 400 million liters of ethanol.

To meet this expected ethanol demand, the group said at least 14 ethanol production facilities with capacities of at least 100,000 liters a day had to be established.

Copyright 2006 Inquirer. All rights reserved.

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