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Coconut Methyl Ester as an Alternative Fuel1

E.V. Carandang2

INTRODUCTIONW

hen I was invited to speak before you by the Society for the Advancement of Technology Management inthe Philippines (SATMP to discuss the recent developments and issues on the use of alternative fuels in thePhilippines! I accepted the invitation with some hesitation knowing full well I will be facing technologye"perts#

As I made my decision! I thought I would provide some insights on the coconut industry having hade"perience in the past $% years e"perience in the industry working not only with coconut oil but withcoconut methyl ester production and its use as an alternative fuel to petroleum diesel#

I was informed to limit my discussion in the ne"t $% to &' minutes to the following

state of research on )oconut Methyl *ster ()M* in the Philippines

anticipated problems+issues on the adoption of the )M* technology appraisal of efforts of government agencies and+or private sector to promote )M*

suggested measures to accelerate mass adoption of )M*

,efore proceeding to the main topic! please allow me to give you some background on the coconutindustry#

The present economic condition continues to adversely affect the withering coconut industry# -uringthe last $. months! copra prices traded at the lowest price in many years in March &''$# It has since veryslowly recovered# There was a time when coconut farmers would not even harvest their copra because

prices were not remunerative# At present! a kilo of copra could not provide a farmer with a kilo of rice#,ased on the consumers/ price inde"! a kilo of copra should have a purchasing power of P &%# Its currentvalue at farm gate! however! is only less than P %#''# 0ooking for a profitable alternative! farmers have

found a new business in coco lumber that provides outright income which copra could give them in $' to$% years#

In the global conte"t! the outlook is not any brighter either# America and *urope! our largest or ma1ormarkets! will not eliminate their trade distorting farm subsidies which give their farmers an edge over theirthird world counterparts# The *uropean 2nion has allotted 3&' billion oilseeds subsidy! enabling it to payfarmers better even with prevailing low farm prices to stockpile production and to sell at a loss# Whenthey drop their prices! other oils follow creating a distortion that has placed the price of coconut oil atunremunerative levels#

)anola! a new variety of rapeseed developed through biotechnology which is high in both oleic andstearic fatty acids is now commercially planted and marketed# Still! biotechnology has gone further in alater work by )algene that has genetically altered rapeseed to 4mimic5 coconut oil/s high laurate property#In a few years! when )algene/s high6laurate rapeseed variety becomes available in the world market!coconut oil could be tossed off the competition#

)oconut is the only agricultural crop and the only $''7 8ilipino product among the top five dollarearners of the country# Total land area in the country planted with coconut is estimated at 9#$'M hectares#0and utili:ed for coconut planting in year &''' stood at 9$#;97 of total agricultural area< productionrepresented $.#9%7 of total crops harvested< and with value representing .#=$7 of aggregate# )oconute"ports bring in 2S 3>'' M to more than 2S 3$ , a year# 8or many years! e"cept for the last $. months!coconut oil ()?@ which is the primary product of coconut en1oyed a premium price in the world fats andoils market#

$Paper presented in the Roundtable Discussion on the Current Development and Issues of Alternative Fuels in the Philippines, Society for theAdvancement of Technology anagement in the Philippines !SATP", April ##, $%%$, AI Conference Center, a&ati City, P'I(IPPI)*S+&Author is former *ecutive Director, Philippine Coconut Research and Development Foundation !PCRDF", -F PCRDF .ldg+ Pearl Drive, /rtigas

Center, Pasig City, #0%1 P'I(IPPI)*S+


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The high demand for coconut oil is due to its high lauric fatty acid content! the base material used fordetergent and cosmetic products# @f the total Philippine coconut oil production! ;'7 is e"ported! .'7 of

which is used for industrial application and the rest for food# owever! coconut oil has always been a pricetaker# Since coconut oil is only %#%.7 in $==. to less than %7 in &''' of the total world fats and oilsmarket and with only a handful of big users! it is the world market that dictates the price of coconut oil hereand abroad# 2nlike soybean and palm oil which supply more than >'7 of vegetable oils and fats trade!coconut oil is not traded in the commodity e"change# There are several factors that can influence the

pricing of coconut oil but generally it all boils down to supply and demand#

Price forecast and past prices for coconut oil, Phil., CIF Rott. (US$/MT)

July/June

FebMarAprMay

93/9494/9595/9696/9797/9898/9999/0000/012001200120012001

526634730731608743617328285289293295

Source: Oil orl! 2001

)hanges in political administration most often cause changes in policies# -uring the Marcos years!the industry started to go into the production of oleochemicals from 1ust being copra e"porter even whenthe industry was run by 1ust a few individuals# The ABuino years were known for the deregulation and free

market policy resulting to significant increase in processing capacity beyond what coconut productioncould supply# The Camos years were committed to the adherence to the World Trade @rgani:ation(W@ and A8TA! and to strengthening the small coconut farmer organi:ations! thus causingunprecedented increase in the number of coconut farmers from $#& million to more than 9 million# The*strada years had the unsettled issue on the coconut levy fund and the maunlad program trying toma"imi:e the use of the coconut land for other agricultural and marine pro1ects to increase farmers/income# The Arroyo administration is showing great interest in the development of the coconut industry byincreasing domestic consumption and creating a million 1obs# Several government agencies! especiallythose under the @ffice of the President! including private groups are being mobili:ed to think how torevitali:e the coconut industry# They were asked to come out with recommendations to help the ailingcoconut industry#

Causes of low prices for coconut oil


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The free market policy sometimes results in a glut of )?@ abroad# The uncontrollable sell and sellsyndrome created huge inventories that even when we want to sell more< buyers already refused to buy#This surely brings down prices# This situation happened during the late &''' when prices droppedsubstantially so that coconut farmers didn/t even bother and 1ust left the nuts to fall on the ground# Attimes! even if inventory abroad is low! news of an increase in coconut production due to good weather stillcould pull down prices# There were times when news like government+industry plan to supply ?ational

Power )orporation (?P) with coconut oil to be incorporated with bunker fuel created nervousness in theinternational market raising the price of coconut oil then# 0ow prices mean not only loss of dollars for thecountry! or less profit for the traders and manufacturers! but most of all losses in terms of coconut

producer/s income#

I! "# F"TS% &'' R! *+PRTS ( Share - coodit)

1998 2000

1" #al$ oil2" Soybean oil3" Sun%lo&er oil4" 'allo& an! (rea)e)

5" *ape)ee! oil6" +oconu, oil7" #al$ -ernel oil8" +orn oil9" .u,,er10" Olie oil11" Fi) oil12" +a),o .ean oil13" (roun! nu, oil14" +o,,on)ee! oil15" ar!16" in)ee! oil

34"38 24"42 8"70 7"06

6"68 5"58 3"23 2"44 1"74 1"37 1"16 0"83 0"79 0"66 0"53 0"36

30"34 2 30"45 1 8"16 4 4"40 5

9"50 3 4"34 6 2"44 7 1"53 10 1"31 11 1"04 12 1"66 8 0"59 15 1"64 9 0"86 13 0"40 16 0"78 14

Source2 3CAP Coconut Statistics #445 and $%%%+

hilippines search for alternative fuel usin! CME

D A big portion of the country/s dollar reserve is spent on rising costs of crude oil prices and petroleum! *ngr# 8rancisco ernande: of P?@)6*C-) reported the results

of their studies on the )M*#


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6 $==$! *ngr# Codolfo Seredrica of P?@)6*C-) reported results on their study of )M* as a diesel fuele"tender# They run a &%'6hour durability test for stationary engine using 9'+;' blend# The e"tent ofcarbon deposits< lube oil contamination and effects of early and late in1ection timing were included in hisreport#

6 The studies on passenger buses using &'+.' blends included their findings on the use of )M*

6 performance comparable with diesel fuel6 noticeable reduction in power6 increase in fuel consumption6 low carbon deposits6 mineral wear noted after &%' hr6 no lube contamination

RP Coconut il Mills% Capacit Utili0ation (in 1222 MT, Copra Ters)

Year Annual rated capacity Estimated copra crushed Estimated capacity utilized (%)

1966197019751980

1985198619871988198919901991199219931994199519961997199819992000

1 2051 2051 6983 325

3 6273 6384 6674 7844 8915 0635 0215 0215 3505 3215 2695 0694 8694 9435 0655 187

777640

1 2201 737

1 4592 5192 1531 7001 5942 2941 7981 8522 0711 8622 6701 8082 2372 3691 1762 132

64"562"471"852"2

40"269"246"135"532"645"335"836"938"735"050"735"745"947"923"241"1

Source2 3CAP Coconut Industry 6it $%%%+

6 8ebruary $=='! Philippine )oconut Cesearch and -evelopment 8oundation! Inc# (P)C-8 started using$''7 )M* (neat as diesel substitute completing $''! ''' kilometer run# Cesults showed that in theIS2G2 )&H'- diesel engine! $''7 )M* as fuel does not cause any engine trouble! no cavitations ofin1ection pumps! and no engine wear and tear# As e"pected! fuel consumption using )M* was higher by$&7 to $%7 depending on the load due to its low ,T2 as compared to diesel

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