D&L sees no material impact on plan to suspend biofuel blending

Chemicals manufacturer D&L Industries Inc., one of the country’s largest producers of coconut-based biodiesel through its unit Chemrez Technologies, on Tuesday said the proposed measure allowing the temporary suspension of mandatory biofuel blending will not result in any material impact on its business.

D&L issued the statement after President Ferdinand Marcos Jr. certified as urgent a measure seeking to amend the Biofuels Act of 2006, allowing the chief executive to suspend mandatory biofuel blending if the blended fuel prices are 5% higher than pure fuel to ease shocks amid volatile pump prices due to the Middle East conflict.

“Based on prevailing market conditions, the price differential between biodiesel-blended diesel and pure diesel remains well below the five percent threshold indicated in the proposed legislation. As such, we do not expect any material impact under current market conditions,” D&L president and CEO Alvin Lao said in a statement.

At current pricing dynamics, the differential is estimated at approximately 1.33% when diesel prices are around P90 per liter.

“The proposed measure is intended as a temporary price stabilization mechanism and does not repeal the Biofuels Act or alter the country’s long-term policy direction toward renewable fuels. We therefore expect the long-term fundamentals of the biodiesel industry to remain intact,” Lao said.

He said that D&L’s Chemrez has the flexibility to redirect production toward higher-value coconut-based oleochemical exports should domestic biodiesel demand temporarily soften.

“Global demand for sustainable specialty ingredients remains robust. The operational flexibility and resilience we have built over the years allow us to navigate evolving market conditions while continuing to deliver stable growth,” Lao said.

“We appreciate that policymakers recognize the importance of protecting the local biodiesel industry, which supports the livelihoods of millions of Filipino coconut farmers and contributes meaningfully to the country’s sustainability and energy security goals,” he added.

The D&L chief said that based on the current discussions, “there appears to be strong appreciation for ensuring that the domestic agro-industrial value chain for biofuels remains viable even as the government seeks to manage fuel price volatility.”

“We remain committed to engaging constructively with policymakers and industry stakeholders as discussions on the proposed measure progress,” Lao said. — BAP, GMA Integrated News