Chemrez sees ramped up orders amid higher coconut blend in diesel

Chemrez Technologies Inc., a wholly owned unit of specialty chemicals and foods ingredients maker D&L Industries, is boosting the operations of its coco-diesel plant in Batangas amid increased orders following the government’s order to increase the coco methyl ester (CME) blend in biodiesel.

In a news release, Chemrez president Dean Lao Jr. said that the company’s recently completed P10.5-billion plant is already running at optimal capacity as it saw ramped orders from its clients to comply with the mandate of a 3% CME starting October 1, 2024.

To recall, in May, the Department of Energy (DOE) issued a circular which mandated the increase in CME blend to 3% from 2% in diesel fuels sold nationwide beginning this month.

“We also have to look into it to see if we can get a good return on investment,” Lao said, noting that Chemrez is “also ramping up production of higher margin coconut oil products.”

“We have to weigh carefully which will be more beneficial for us to expand,” he said.

The Chemrez chief added that demand for biodiesel is expected to continue growth as the government intends to increase the mandated CME blend to 4% next year and to 5% by 2026.

Laos said Chemrez is currently the country’s largest biodiesel manufacturer, adding that an increase in CME blend to 3% would lead to a 50% increase in biodiesel volumes which “may also result in better margins and profitability for the industry.”

“This directive from the DOE is a huge step towards progress and the development of the biodiesel and coconut industry in general,” he said.

“This should pave the way for a greater energy self-sufficiency while collectively reducing our CO2 footprint on the planet,” he added.

The Energy Department earlier said the move aims to decrease dependence on imported fuels, reduce greenhouse gas emissions, and support the local biodiesel and bioethanol sectors.

The Biofuels Act of 2006 mandates that all liquid fuels for motors and engines sold in the Philippines be blended with biofuels. —Ted Cordero/KG, GMA Integrated News