Large coconut biodiesel project in the Philippines with aim to export to Japan

Earlier we wrote a short overview of coconut power in the Pacific, showing that several countries are investing in the humble nut for the production of biofuels. Coconuts can be used as a feedstock for different fuels: its oil can be transesterified into biodiesel, whereas its woody shell makes for a solid biomass stock with a relatively high energy content that can be used to generate electricity (co-firing with coal or in dedicated biomass power plants).

Philippine company Bio-Energy NL Inc. announced [*cache] it is now planning to make a major investment of up to 15 billion pesos (€228/US$300 million) for an intensive coconut based biodiesel project in the country's Northern Luzon province. The biodiesel will be exported to Japan.

Industry sources report that Bio-Energy had requested the Japan Bank for International Cooperation (JBIC) to fund the project. In a letter to Bio-Energy president Arnold Caoili, JBIC director for policy and strategy coordination Kazuhiko Amakawa, said that the multilateral institution has approved the company’s request to fund the feasibility study for the multi-million dollar biodiesel project.

The feasibility study on the proposed biodiesel project is seen to be completed by August 2007 or after six months. If the feasibility study shows positive results, the project proponents will start planting coconut and construct a biodiesel refinery in Northern Luzon.

The coconut plantation will be established on not less than 500,000 hectares of idle land with the refinery expected to have a capacity of 300 million liters of biodiesel per year (roughly 1.9 million barrels of oil equivalent). It would take three years to construct the integrated coconut crushing and refinery plant. The new coconut plantation is expected to yield its first fruits within 4 years:
biodiesel :: biomass :: bioenergy :: biofuels :: energy :: sustainability :: coconut :: plantation :: biofuel trade :: Philippines :: Japan ::

According to sources, Bio-Energy has considered Northern Luzon as a potential site for the project since it is here that the best chances are found to integrate the project in a pro-poor program that will strengthen the livelihoods of the coconut farmers.

"This will be a new product for the province since the tobacco industry is dwindling. They will plant new coconut trees so that it would not compete with the local coconut producers. One of the requirements of the Ministry of Environment of Japan is for the plant owners not to get [fruits] from existing trees but plant new ones," the sources said.

The biodiesel is said be aimed for exports to Japan. "The capacity of the new plant will serve a little over 10 percent of the five percent biodiesel demand of Japan (2.5 billion liters)," the sources said. The five percent annual demand for biodiesel for Tokyo metropolitan alone is estimated to reach 300 million to 400 million liters.

Consistent with the World Trade Organization (WTO) rules, the Japanese government mandates for the use of a five percent blend of biodiesel by March 2007. This biodiesel blend is seen to increase to 20 percent in 2020.

Japan has limited potential for biofuel production of its own. This is why it is actively investing abroad. Earlier this year, Brazil started delivering ethanol to the country, under an agreement that will see Brazil satisfy 10% of all of Japan's biofuels by 2010.