The Philippine Coconut Authority (PCA) has rejected proposals to fully suspend the country’s biodiesel mandate, warning that such a policy shift could severely affect the local coconut sector and millions of farmers who depend on it.
The call for suspension comes amid efforts by President Ferdinand Marcos Jr. to pass legislation that would temporarily halt the mandatory use of locally sourced biofuels for one year. The proposal aims to ease the impact of rising global oil prices by allowing the importation of cheaper biofuel alternatives.
However, the PCA stressed that the current biodiesel program is a key source of demand for coconut oil in the domestic market. The agency cautioned that replacing locally produced coconut methyl ester (CME) with cheaper imported palm methyl ester (PME) could push excess coconut supply into export markets, leading to a sharp decline in local copra prices.
According to the PCA, this scenario would have serious consequences for coconut farmers, who are among the most vulnerable participants in the industry’s value chain.
The agency also warned that suspending the mandate could jeopardize 14 local production facilities and put thousands of jobs at risk.
Rather than a full suspension, the PCA recommended a “calibrated and prudent” adjustment of the policy. It reaffirmed its opposition to stopping the mandate, which currently requires a 3 percent CME blend in diesel fuel.
While some groups have suggested delaying the planned increase to a 5 percent blend, the PCA proposed that if market conditions deteriorate, the government could consider lowering the requirement to 2 percent instead of fully halting the program.
The authority added that domestic processors are capable of raising the blend level to as high as 7 percent, should policy direction allow it.
The PCA also emphasized that coconut-based biofuels are environmentally more sustainable compared to imported palm-based alternatives.
