BIOETHANOL producers are asking the government’s help to lower the cost of raw materials needed for the production of bioethanol.
The Center for Alcohol Research and Development Foundation (CARDF) is in talks with the Sugar Regulatory Administration (SRA) to revisit its regulation imposing levies on imported molasses in order for the alcohol and bioethanol industry to flourish.
The foundation is composed of distillers and bioethanol producers.
“We are now in exploratory talks with SRA to seek for a win-win solution on the issue of higher molasses cost,” CARD Foundation chairman Gerardo Tan Tee told reporters in a briefing.
Tee said that at present, the SRA has been charging P400 per ton of imported molasses.
“The import levy of P400 per ton is not needed anymore because molasses are now expensive even if imported,” he said.
Because of this, Tee said they are asking the SRA to scrap the P400 fee for every ton of imported molasses.
He explained that the levy was implemented in the past to protect local sugarcane farmers, who were selling molasses at the time in the range of P2,000 to P3,000 per ton, from the influx of cheap imported molasses.
Tee said expensive molasses would greatly affect motorists.
“What we don’t want is to add to the cost of fuel for motorists. They may not feel the burden so much now that oil prices are low overall, but that will not stay low forever. It is not sustainable,” he said.
Tee said the SRA already committed to conduct talks with sugarcane farmers to lower if not fully scrap the import levy on molasses.
Molasses, a viscous by-product of the refining of sugarcane or sugar beets into sugar, is a raw material for bioethanol and feedstock for alcohol production.
The Biofuels Act of 2006 mandates a 10-percent bioethanol blend in gasoline but at present, the country still enforces a 2-percent blend due to supply issues.
Tee said the country has a shortage of at least 600,000 tons of molasses.
“Our annual requirement for molasses is at 1.6 million tons, but local production is only at one million ton,” he said.