First and largest coco-biodiesel plant in Asia opens

President Arroyo led yesterday’s opening of a new P650-million coco-biodiesel plant in Quezon
City, which is expected to boost the country’s energy independence agenda at a time when
world crude oil prices continue to surge.

Chemrez’s plant in Libis — the biggest and most modern coco-biodiesel facility in Asia — is
expected to produce 60 million liters of coco-biodiesel per year.

In her speech, the President promoted the use of Chemrez’s coco-biodiesel product, which is
marketed under the brand name BioActiv. She said if used regularly, the fuel enhancer could
guarantee a P1,000 savings on fuel consumption and vehicle maintenance per month.

"How does this reduce the cost of transport? By adding one liter of BioActiv fuel enhancer to
every 100 liters of diesel we reduce the transportation cost per kilometer," she added.

Mrs. Arroyo lauded Chemrez for its contribution to make diesel-fueled vehicles become fuel-
saving and environment friendly, for providing a source of livelihood for coconut farmers and for
producing a Philippine export product to first world countries.

"I want to congratulate Chemrez because we are now exporting biodiesel to Japan and
Germany, which have very high quality standards," Mrs. Arroyo said.

Aside from Japan and Germany, the President said the Americans, Australians and the Chinese
have also expressed confidence in the local coco-biodiesel.

The company is also looking at other European markets like France, the Netherlands and Italy
as potential market for Philippine coco-biodiesel.

Jun Lao, however, said that at this time they would concentrate first on the domestic market.
"We are already positioning in other markets but at this time, we want to focus on the Philippine
market," he said, adding that the expansion will come after the passage of the Biofuels Bill now
pending in Congress, which will mandate a one percent blend of coco-biodiesel to diesel
products.

The Philippines’ annual diesel demand is about six billion liters. If every diesel-run vehicle in the
country will use at least one percent blend of coco-biodiesel, diesel consumption will be reduced
by 540 million liters per year.

Mrs. Arroyo said this will free our people from uncertainties of an energy supply heavily
dependent on imported oil.

She noted that consumption of imported fuel products decreased by eight percent last year
because of the alternative fuel program.

"What we want is that by 2010 we are already 60 percent self-sufficient in fuel and energy
needs," she said.

Chemrez is one of the three coco-biodiesel manufacturers in the country accredited by the
Department of Energy. With the additional 60 million liters of coco-biodiesel it will be producing
per year, the country now produces a total of 110 million liters of coco-biodiesel per year. Of
this, 25 million liters are being produced by Senbel and 10 million liters by RI Chemicals.

Energy Secretary Raphael Lotilla said the use of coco-biodiesel may be one of the country’s
sustainable and long-term solutions to rising oil prices.

Chemrez operations manager Jun Lao said the coconut industry would benefit approximately
P2 billion in additional revenues per year from the sale of coconut oil. "This is the return benefit
in the use of locally-sourced fuel in contrast to imported fuel," Lao said.

Mrs. Arroyo said she had allotted P1 billion for agriculture and the agrarian reform program to
be able to develop one million hectares of land, which could include the development of the
coconut industry.

During the inauguration of the Chemrez plant, the President was accompanied by Lotilla,
Quezon City Mayor Feliciano Belmonte Jr. and several lawmakers whose provinces would
supply coconut to the coco-biodiesel company.
The coco-biodiesel advantage
Lotilla said apart from reducing actual cost of fuel, alternative transport fuels could also yield
savings in terms of mileage efficiency.

According to Chemrez, coco-biodiesel enhances combustion performance for better mileage

and restores fuel system and engine efficiency.

It is said that the inherent oxygen content of coco-biodiesel promotes better combustion in the
engine which translates to an increase in mileage by as much as 10 percent.

Earlier tests by the US Department of Energy’s National Renewable Energy Laboratory (NREL)
revealed that coco-biodiesel consistently yielded comparable or even better results than
conventional fuel.

Tests also showed that both diesel and coco-biodiesel fuels met existing Philippine National
Standards for diesel fuel quality. In fact CME scored better in terms of cetane number, flash
point, and sulfur content compared to diesel. This means that coco-biodiesel burns more
completely, resulting in more power, better engine performance, longer mileage and lower
emission for vehicles.

The President launched the coco-biodiesel program in April 2004 and issued an order
mandating the use of one percent coco-biodiesel in all government diesel-fueled vehicles.

She also signed as urgent the Biofuels bill pending in Congress.

Meanwhile, despite rising fuel costs, prices of basic commodities could not rise beyond a few
centavos, according to the Department of Trade and Industry (DTI).

Trade Undersecretary Zenaida Maglaya said the DTI and the private sector have conducted a
"sensitivity analysis" or the effect of movements in fuel prices on consumer prices.

The result of the analysis showed that for every 50 centavos per liter increase in fuel prices, an
increase of one to six centavos in the prices of processed food such as sardines, canned meat
and instant noodles was monitored.

In the case of agricultural and poultry products such as pork, fish and chicken, the same amount
of increase would only result in a price hike of one to four centavos per kilo, Maglaya said.

She added that the list of basic goods as determined by the DTI and the private sector has been
published and distributed to the media for dissemination to the public. — Aurea Calica,
Donnabelle Gatdula, Paolo Romero

List of Accredited Biodiesel Producers

Registered
Capacity
Producer Location Feedstock
(Million
Liters/Year)
Coconut
1. Phil. Biochem Products, Inc. 80.0 Brgy. Buli, Muntinlupa City
Oil
Bagumbayan, Quezon Coconut
2. Chemrez Technologies, Inc. 90.0
City Oil
Coconut
3. Mt. Holly Coco Industrial, Inc. 60.0 Lucena, Quezon
Oil
Coconut
4. Pure Essence International, Inc. 72.0 Bagong Ilog, Pasig City
Oil
Coconut
5. Golden Asia Oil International, Inc. 60.0 Bagong Ilog, Pasig City
Oil
Coconut
6. Bioenergy8 Corp. 30.0 Sasa, Davao City
Oil
Coconut
7. Tantuco Enterprises, Inc. 90.0 Tayabas, Quezon
Oil
Coconut
8. JNJ Oleochemicals, Inc. 63.3 Lucena, Quezon
Oil
Coconut
9. Freyvonne Milling Services 15.6 Toril, Davao City
Oil
10. Phoenix Petroleum Philippines, Villanueva, Misamis Coconut
24.0
Inc. Oriental Oil
Coconut
11. Econergy Corp. 30.0 General Santos City
Oil
TOTAL 614.9