The Philippine Coconut Authority (PCA) has emphasized thet it does not support the full suspension of the biodiesel blend mandate, citing potential risks to coconut farmers, domestic industry stability, and long-term investments in the sector.
Instead, PCA said has called for a balanced and calibrated approach to the country’s biodiesel blending policy amid rising global fuel prices driven by ongoing geopolitical tensions in the Middle East.
The agency issued this statement in response to inquiries on whether it will recommend the suspension or adjustment of the biodiesel blending requirement in light of rising global fuel prices associated with ongoing geopolitical tensions in the Middle East.
“The PCA maintains that it is not amenable to the full suspension of the biodiesel blend mandate. While proposals have been raised to defer the scheduled increase to a 5 percent blend, the Authority supports maintaining the current biodiesel blend at 3 percent, or, if warranted, reverting to the previous 2 percent level as a calibrated and prudent response under prevailing market conditions,” PCA said.
Based on consultations with industry processors, PCA said there is also existing capacity to increase blending levels up to 7 percent, subject to appropriate policy direction and overall market readiness.
The biodiesel program continues to serve as the primary domestic driver of coconut oil (CNO) demand. In the domestic supply chain, coconut farmers sell copra to oil millers, who in turn supply coconut oil (CNO) to coconut methyl ester (CME) producers, some of whom are vertically integrated across these stages. Under current market practices, no specific pricing incentives are provided for copra utilized in biodiesel production, and the direct income impact on coconut farmers remains limited.
Notwithstanding this, PCA said, any suspension or displacement of coconut methyl ester (CME) in favor of imported palm methyl ester (PME) would likely redirect domestic supply to lower-priced export markets, thereby exerting downward pressure on local copra and CNO prices.
Such a scenario could have significant adverse implications for the livelihoods of coconut farmers, who remain the most vulnerable stakeholders in the value chain.
Moreover, replacing domestically produced CME with imported PME may jeopardize the viability of the country’s 14 CME production facilities, undermine years of industry investment, and place thousands of direct and indirect jobs at risk.
Additionally, such a shift may carry environmental implications, as CME is generally recognized to offer more favorable environmental benefits compared to imported PME.
In view of these considerations, the PCA reiterates its commitment to policies that ensure market stability, protect farmer welfare, sustain domestic industry capacity, and promote environmentally sound energy solutions.
The PCA reiterated that the biodiesel program remains a critical pillar of domestic coconut oil demand, helping stabilize the market and support the broader coconut value chain.
The Authority continues to engage with stakeholders and partner agencies to ensure that biofuels policy remains responsive, evidence-based, and aligned with national development priorities, while safeguarding the welfare of Filipino coconut farmers.
