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Biofuels facility gets BoI perks


REPORT FROM BUSINESSWORLD THE BOARD of Investments (BoI) has granted tax perks to a P4.08-billion integrated bioethanol production facility in Bukidnon. Data from the BoI showed the new project will be undertaken by South Bukidnon Bioenergy, Inc., joint venture between renewable energy firm Bronzeoak Philippines, Inc. and Green Renewable Holdings, Inc. Bronzeoak Philippines is jointly owned by Zabaleta & Co. (Philippines) and British firm Bronzeoak Ltd. It was established in 2003 for the purpose of developing renewable energy projects in the Philippines. The integrated production facility will be composed of a sugar cane mill to produce ethanol distillery, as well as a 10-megawatt (MW) co-generation plant and carbon dioxide (CO2) recovery facility. "The bioethanol to be produced will be sold to a petrochemical firm. Excess of the power to be used for internal needs would be sold to the local electricity distributor while CO2 which is a by product of ethanol fermentation would be sold to beverage and refrigeration firms," a BoI official said. The facility is expected to produce 45.75 million liters of bioethanol a year. The Department of Energy in July said it had received nine applications from investors eyeing to build ethanol plants in the country. Five of these applications have been endorsed to the BoI. Bronzeoak had intended to establish two plants — one in San Carlos, Negros Occidental and one in Bukidnon. Launched in 2005, the San Carlos facility is being built at the Agro-Industrial Export Processing Zone of the province. It will produce 100,000 liters of ethanol per day. It can also produce 9 MW of electricity and another 5 MW for export to the grid. Other investors are targeting Cagayan, Pampanga, Batangas, Southern Leyte, Negros and Panay. Last January, President Gloria Macapagal-Arroyo signed Republic Act 9367, or the Biofuels Act. The law requires gasoline-fed vehicles to use a minimum of 5% bioethanol blend within two years of its effectivity, rising to 10% within four years. The law also states that investments on biofuels like ethanol plants may enjoy pioneering project status, including a six-year tax holiday, which can be extended to eight years if the project uses indigenous raw materials at rates set by the BoI and if the net foreign exchange savings or earnings amount to at least $500,000 annually in the first three years of operation. Pioneering investments include enterprises that produce non-conventional fuels or manufacture equipment which uses non-conventional sources of energy. As this developed, the Agriculture department said Thursday that more investors have expressed interest in building biofuel facilities all over the Philippines. Investors are looking to set up plants in the Ilocos region, Cagayan Valley, Western Visayas, Zamboanga Peninsula, Northern and Central Mindanao and Davao, said Agriculture Secretary Arthur C. Yap, in a statement. Mr. Yap said that the transactions would be done through straight purchases, lease arrangements, contact growing or joint ventures. He added that the Agriculture department is identifying specific locations for agriculture sites amounting to 400,000 hectares. About 90,000 hectares will be located in the North Luzon Agribusiness Quadrangle, 10,000 hectares in Central Philippines, and 300,000 in Agribusiness Mindanao. Mr. Yap also said that 78% of the 600,000-hectare target for this year are now being processed for planting the crops. Crops used as biofuel feedstock include cassava, oil palm, coconut oil, sugar cane and jatropha. — BSSD and MFMB/BusinessWorld
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