Development of Bio-Diesel Industry in the Philippines Richard Torres, D1 Oils ADB Headquarters, Manila, 25 May 2006

Development of Bio-Development of Bio-Diesel Industry in the Diesel Industry in the

PhilippinesPhilippines

Richard Torres, D1 OilsRichard Torres, D1 Oils

ADB Headquarters, ADB Headquarters, Manila, 25 May 2006Manila, 25 May 2006

TopicsTopics

• Current SituationCurrent Situation

• Feed StockFeed Stock

• Nursery/Plantation Nursery/Plantation –Crushing/Oil/Expulsion/Refinery–Crushing/Oil/Expulsion/Refinery

• Social Economic EffectSocial Economic Effect

• TechnologyTechnology

Current SituationCurrent Situation

• Consumption of energy is increasing: Consumption of energy is increasing: – Power GenerationPower Generation– Industrial UseIndustrial Use– MarineMarine– VehicleVehicle

• Diesel Demand projected to increase Diesel Demand projected to increase from 41 MMBFOE 2004 to 59 MMBFOE from 41 MMBFOE 2004 to 59 MMBFOE 2014 (30% Increase) 2014 (30% Increase) (Source: PEP 2005)(Source: PEP 2005)

Current Situation; Current Situation; cont. cont. • Approximately 46% of Energy being Approximately 46% of Energy being

importedimported• Economic Dependency of Energy SourceEconomic Dependency of Energy Source• Growing effect of Greenhouse Gases on Growing effect of Greenhouse Gases on

the environment the environment • Fuel prices steadily increasing causing Fuel prices steadily increasing causing

public concernpublic concern

•Should we continue our course or Should we continue our course or identify and pursue alternatives identify and pursue alternatives through a Nation Wide Road Map through a Nation Wide Road Map to assure the continuous growth to assure the continuous growth of this industry.of this industry.

Current Situation; Current Situation; cont.cont.

• Determine the economic feasibility of the Determine the economic feasibility of the FeedstockFeedstock

• Growing demand for planting materialsGrowing demand for planting materials

• Awareness and interest in jatropha growing.Awareness and interest in jatropha growing.

• Need to create the agriculture infrastructure to Need to create the agriculture infrastructure to create a sustainable source of feedstockcreate a sustainable source of feedstock

1.1. Training on Planting MethodologyTraining on Planting Methodology

2.2. Nursery (Propagation)Nursery (Propagation)• SelectionSelection• SeedsSeeds• CuttingsCuttings• Tissue CultureTissue Culture• Ect.Ect.

3.3. PlantationsPlantations

4.4. Buying and Processing CentersBuying and Processing Centers

Current Situation; Current Situation; cont.cont.

• Chemrez, recently inaugurated CME plant Chemrez, recently inaugurated CME plant biodiesel plant in country. biodiesel plant in country.

• New investment ventures being heard of New investment ventures being heard of creating operations to produce Bio Diesel creating operations to produce Bio Diesel in the Philippines.in the Philippines.

• D1 Oils currently providing propagation D1 Oils currently providing propagation material to plant 22,500 hectares or the material to plant 22,500 hectares or the equivalent of 75,000 tons of CJO for 2007-equivalent of 75,000 tons of CJO for 2007-88

Bio Diesel Feed StockBio Diesel Feed Stock

• Jatropha Jatropha

• Karanja Karanja

• PalmPalm

• CoconutCoconut

• Rape SeedRape Seed

• SunflowerSunflower

• SoyaSoya


•Jatropha Jatropha •KaranjaKaranja • PalmPalm• CoconutCoconut• Rape SeedRape Seed• SunflowerSunflower• SoyaSoya


•Jatropha OilJatropha Oil


•Karanja OilKaranja Oil


•Palm OilPalm Oil


•CoconutCoconut OilOil


•Rapeseed OilRapeseed Oil


•Sunflower OilSunflower Oil


•Soya OilSoya Oil

Why JatrophaWhy Jatropha• Does not compete with price or demand of the Does not compete with price or demand of the

food marketfood market• Thrives on most soils in the PhilippinesThrives on most soils in the Philippines• Needs minimum maintenanceNeeds minimum maintenance• Can withstand droughtCan withstand drought• Very few pestsVery few pests• Not edible by animalsNot edible by animals• Easy Propagation with rapid growthEasy Propagation with rapid growth• Harvesting beginning 2Harvesting beginning 2ndnd year year• Average 30% Oil yield from seed crushingAverage 30% Oil yield from seed crushing• Excellent opportunities of income from by Excellent opportunities of income from by

products products • Most Cost Effect Seed StockMost Cost Effect Seed Stock

Pres GMA recently Pres GMA recently directed government directed government agencies to establish agencies to establish mechanism and funding mechanism and funding for development of JME for development of JME as biodiesel alternative.as biodiesel alternative.DOE establishing DOE establishing standards for JME and standards for JME and tapping D1 Oils as main tapping D1 Oils as main source of data.source of data.

Table 3. Area, production and value of production of five important crops, in 2003

Crop Area (‘000 ha)

Production(‘000 tons)

Value of production (M pesos)

Rice 4 006.4 13 499.9 117 989.0

Maize 2 409.8 4 615.6 32 540.1

Coconut 3 214.2 14 121.9 38 694.0

Sugarcane 389.4 23 981.3 21 823.0

Banana 409.8 5 369.0 30 066.2

Rice and corn occupy 41 and 24 percent, respectively, of the total agricultural area. Of the 4 million hectares grown

Table 1. Land utilization in the Philippines

Land UseArea (ha) Percentage

Agriculture 9 728 800 32.95

Forestry 19 062 600 64.56

Settlement 131 400 0.44

Mining and quarrying 8 700 0.029

Inland Fisheries 595 700 2.02

Open Land 1 100 0.004

Total 29 528 300 100.00

Administrative boundaries

PROJECT IMPLEMENTATIONN

ucl

eus

Ph

ase

2P

hase

1

10 Ha. NUCLEUS

0 to 6 months Development

Period

5,000 Hectares

15,000 Hectares12 to 24 months

Development Period

6 to 12 months Development

Period

Large Scale Plantation Large Scale Plantation

DevelopmentDevelopment

1 - hectare nucleus farm10 x

3 x

5 x

monocrop intercrop

5,000 - hectare plantation

monocrop intercrop

1,000 - hectare plantation

10 ha

5,000 ha

15,000 ha

IMPLEMENTATION – PHASE 312

TO

36

MO

NT

HS

5 Ha. Nucleus

5 Ha. Nucleus

5 Ha. Nucleus

5 Ha. Nucleus

5 Ha. Nucleus

5,00

0 H

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res

Exp

ansi

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5,00

0 H

ecta

res

Exp

ansi

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5,00

0 H

ecta

res

Exp

ansi

on

5,00

0 H

ecta

res

Exp

ansi

on

5,00

0 H

ecta

res

Exp

ansi

on

5 hectare nucleus

0 to 6 months Development priod

PHASE 1

5,000 HectaresPhase 2

6-12 months

15,000 hectares – Phase 312 – 24 months

5 hectare nucleus

5 hectare nucleus

5 hectare nucleus

5 hectare nucleus

5 hectare nucleus

5,0

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12 – 36 month

FULL IMPLEMENTATION

Current Nucleus Farms/Current Nucleus Farms/Projected productionProjected production

LocationLocationInitialInitialAreaArea Target AreaTarget Area

CJO/yrCJO/yr3 kg/shrub/yr3 kg/shrub/yr

CJO/yCJO/y6 kg/shrub/yr6 kg/shrub/yr

GEN. SANTOSGEN. SANTOS 5 ha5 ha 20,000 ha20,000 ha 40,000 mt40,000 mt 80,000 mt80,000 mt

PIKITPIKIT 1 ha1 ha 5,000 ha5,000 ha 10,000 mt10,000 mt 20,000 mt20,000 mt

DACONGCOGONDACONGCOGON 5 ha5 ha 20,000 ha20,000 ha 40,000 mt40,000 mt 80,000 mt80,000 mt

DIGOSDIGOS 5 ha5 ha 20,000 ha20,000 ha 40,000 mt40,000 mt 80,000 mt80,000 mt

Total:Total: 16 ha16 ha 65,000 ha65,000 ha 130,000 mt130,000 mt 260,000 mt260,000 mt

Social Economic EffectSocial Economic Effect• Lower fuel pricesLower fuel prices• Cheaper cooking heating oilCheaper cooking heating oil• Lighting oil Lighting oil • New crop source of income from Marginal and New crop source of income from Marginal and

Idle landIdle land• Additional Source of income to farmers of Additional Source of income to farmers of

traditional croptraditional crop• Provide a source of income to ex combatantsProvide a source of income to ex combatants• Provide jobs to womens groups (Nursery, Soap Provide jobs to womens groups (Nursery, Soap

Production)Production)• Create new business oportunities (bi-products)Create new business oportunities (bi-products)•

MULANAY QUEZONMULANAY QUEZON

Production Cost ItemsProduction Cost ItemsNursery Plantation Processing Refining

• seeds

• irrigation

• labor & overhead

• fertilizer

• land lease

• training

• seedlings

• irrigation


• fertilizer

• land preparation

• transport

• weeding/pruning

• training

• harvesting

• expelling

• building


• plant maintenance

• transport

• storage

• D1 20

• building

• overhead

• plant maintenance

• transport

•storage

Seedling: per piece Seeds: per ton CJO: per ton EN 14214: per ton

EARTH-TO-ENGINE SUPPLY CHAINEARTH-TO-ENGINE SUPPLY CHAIN

CoconutBiodieselrefining

Jatropha

Palm

Petroleum refining

Consumer &Industrial Markets

Biodiesel for Local and

Remote areas

Feedstock supply

Biodiesel Production Blending

Philipiines Biodiesel Pool

““Meeting Growing Global Demand for Meeting Growing Global Demand for BiodieselBiodiesel””

1.1.D1's objective is to become a global, sustainable D1's objective is to become a global, sustainable producer of competitively priced biodiesel. producer of competitively priced biodiesel.

2.2.We aim to meet the world's growing demand for We aim to meet the world's growing demand for more green transport fuel. more green transport fuel.

3.3.We intend to deliver a consistent high volume output We intend to deliver a consistent high volume output of sustainable vegetable feedstock oils and high of sustainable vegetable feedstock oils and high

quality biodiesel. quality biodiesel. 4.4.We are building a global portfolio of planting and We are building a global portfolio of planting and

refining operations and we believe production in refining operations and we believe production in volume for the long term is the most profitable way to volume for the long term is the most profitable way to

maintain our lead over competitors. maintain our lead over competitors. 5.5.D1 is commercially driven with a business model that D1 is commercially driven with a business model that

addresses the pressing global issues of fuel supply addresses the pressing global issues of fuel supply security, climate change and sustainable security, climate change and sustainable

development.”development.”6.6.With an Immediate Goal of planting 6,000 hectares With an Immediate Goal of planting 6,000 hectares

for 2006 for the Philippinesfor 2006 for the Philippines

Documents

Development of Bio-Diesel Industry in the Philippines Richard Torres, D1 Oils ADB Headquarters, Manila, 25 May 2006