Ethanol industry now ‘in limbo,’ exec says

BACOLOD CITY, Philippines—An official of a sugar millers’ group said the prospects of the country’s ethanol industry remained dim as sugar planters preferred to convert their crop to sugar, which provides them higher income.

“The country’s ethanol industry is in a limbo,” said Archimedes Amarra, executive director of the Philippine Sugar Millers Association Inc.

Amarra spoke on the sugar-industry prospects at the Negros Economic Summit held recently at the Nature’s Village Resort in Talisay City, Negros Occidental.

Amarra admitted that the ethanol industry had some potential but that its time has yet to come.

“It has some potential but it’s not today, in the future maybe,” he said in an interview on the sidelines of the summit.

Aside from facing competition from imported ethanol due to the failure of government to impose a 20-percent tariff on the product, Amarra said the industry was also hampered by the lack of supply as most cane was being processed into sugar.

He said the three firms built to produce ethanol were looking to produce other by-products of sugarcane.

The San Carlos Bioenergy Inc. (SCBI) in San Carlos City, the Roxol Bioenergy Corp. in La Carlota City, both in Negros Occidental, and the Leyte Agri Corp. have temporarily stopped producing ethanol, Amarra said.

The San Carlos and La Carlota plants have the potential to produce 30 million liters of ethanol each a year, while the Leyte plant can produce nine million liters, he disclosed.

Amarra also noted that the high cost of ethanol production has been brought about by the high prices of sugar cane, the “haphazard” implementation of the Biofuels Law and inadequate government support.

SCBI chairman Jose Ma. Zabaleta explained that the company could only buy sugarcane at P2,000 per 50-kilogram (LkG) to make ethanol production viable.

However, this price is P400 less than what farmers would get from converting cane into sugar, Zabaleta said.

Zabaleta announced recently that SCBI had ceased ethanol production because it would be losing P15 million to P20 million a month if it continued to produce ethanol.

Instead, he said, the SCBI had shifted to sugarcane processing although the company would go back to ethanol production when it becomes viable.

The Biofuels Law of 2006 calls for a mandatory mixing of 5 percent of ethanol in gasoline for the first four years, to be increased to 10 percent thereafter.

The bulk of the supply, however, comes from abroad. –Carla Gomez, Philippine Daily Inquirer