Republic of the Philippines

1. Republic of the Philippines IMPLEMENTATION OF THE BIOFUELS LAW IN THE PHILIPPINES

2. R.A. 9367 Biofuels Act of 2006 The Biofuels Bill signed into law on Jan 12, 2007 as RA9367 • Objectives • To reduce the Philippine’s dependence on imported oil • To increase the economic activity in the country and boost employment • To improve energy efficiency • To contribute in improving air quality • Mandates minimum blend into all diesel and gasoline fuels for as follows: • 1% biodiesel within 3 months from effectivity of the Act • 5% bioethanol within 2 years from effectivity of the Act • Future increase in mandatory blends to be determined by the Biofuels Board

3. Biofuels Implementation • Mandatory use of biofuel-blends • Export • Communal uses 2007 2008 2009 2010 2011 2012 2013 Nationwide Mandate 2% blend Biodiesel Nationwide 1% blend Bioethanol Nationwide 5% blend Nationwide Mandate 10% blend

4. NATIONAL BIOFUELS PROGRAM • Feedstock Development, Production, & Extension For Coconut, Sugarcane, Jatropha & Other Feedstocks: • Land use • - Survey • - Validation of existing plantations • Agriculture • - Propagation / Cultivation • - Fertilization • - Expansion • - Mechanization • Farmers’ Organization • Community Dev’t • Research, Development & Deployment • Varietal improvement &management • Process enhancement • By-products development • Protocol & standards development • Blend performance tests & standards development • Pilot plant & showcase projects • Industry Development • Biofuels road map • Plant construction, operation & expansion • Fuel storage & exchange • Transport & handling • Competitive Pricing • Distribution & sales • Application development • Standards and Quality Assurance • Covers technical & environmental compliance in the following areas: • Production Facilities • Utilities and services • Biofuels & blends • Utilization technologies • Enforcement: • Inspecting & monitoring • Penalizing Policy Formulation & Dissemination Pertains to additional Enabling Rules and Regulations that shall avoid and/or resolve conflicts during the implementation of the Law. This covers all major areas and strategies of the Program. • Investments, Incentives, & Promotions • Government financing • Credit facilitation services • Tax incentives • Market development services • Social amelioration • Manpower development • Seminars, conferences, & workshops • Tri-media info • Web access National Biofuels Program Framework

5. National Biofuels Feedstock Program Goal • To produce sufficient amount of feedstock to meet the demand for biofuels; • To augment farmers income; • To generate rural employment; and • To spur the development of idle and marginal lands

6. Department of Agriculture Biofuels Feedstock Intervention • IEC Activities (info support) • (DA-AFIS, PCA, SRA, BAR) • distribution of IEC materials • primers • audio visual aids • re-tooling and capacity building activities • media relations • press conference Produce sufficient amount of feedstock • Credit Facilitation • (Quedancor/ACPC, GFIs) • development of • financial packages • Policy Support and • General Supervision • (DA-Planning Service, PCA, SRA, • DOE, DOLE) • inclusion in the IPP • formulation of guidelines • Feedstock Supply Assurance • (PCA, SRA, PFC, PAFC, BSWM/DA-Goal 1 Program • DA-PADCC/Philippine Agribusiness Center) • rehabilitation • establishment of new plantations • identification of new lands • investment promotion/intermediation/facilitation • crop protection • irrigation • Infrastructure • (DA-FOS, DA-RFU’s, PCA, BPRE, AFC) • development of farm to market roads • provision of post harvest facilities • provision of hauling facilities • establishment of processing plants Augment income of farmers • Technical Assistance for Production • (PCA, SRA, BPI, NCPC,BPI, BAR, • UPLB, PFC, PCCARD, PCIERD) • research and development • regulatory

7. Identified Biofuel Feedstock Biodiesel:Coconut (Coconut Methyl Ester) Jatropha (Jatropha Methyl Ester) Bioethanol:Sugarcane Sweet Sorghum Cassava

8. Demand for Biofuels BIODIESEL • Processing Plant Requirement (30 MLi capacity): • 2007 – 3 refineries • 2010 – 6 to 7 refineries • 2015 – 7 to 8 refineries

9. Biodiesel Accounts as of September 30, 2008 Note: Number of plants required was derived using a 30 Mli/yr capacity (economic size of a biofuel plant) *Biodiesel will be sourced from existing CME producers

10. Demand for Biofuels BIOETHANOL • Processing Plant Requirement (30 MLi capacity): • 2009 – 9 distilleries • 2011 – 17 to 20 distilleries • 2015 – at least 25 distilleries

11. Bioethanol Accounts as of September 30, 2008 Note: Number of plants required was derived using a 30 Mli/yr capacity (economic size of a biofuel plant)

12. AGRIBUSINESS LANDS - BIOFUEL PROJECTS SUMMARY - AGREEMENTS As of September 30, 2008 NOTE: Bioethanolhectarage requirement is inclusive of existing and expansion areas.

13. CAR CAR CAR 3 3 3 3 3 3 3 3 3 NCR NCR NCR NCR NCR NCR NCR NCR NCR 5 5 5 5 5 5 5 5 5 4 4 4 4 4 4 4 4 4 8 8 8 8 8 8 8 8 8 6 6 6 6 6 6 6 6 6 7 7 7 7 7 7 7 7 7 4 4 4 4 4 4 4 4 4 CARAGA CARAGA CARAGA CARAGA CARAGA CARAGA CARAGA CARAGA CARAGA 10 10 10 10 10 10 9 9 9 9 9 9 10 10 10 9 9 9 ARMM ARMM ARMM 11 11 11 ARMM ARMM ARMM 11 11 11 ARMM ARMM ARMM 11 11 11 12 12 12 12 12 12 ARMM ARMM ARMM 12 12 12 ARMM ARMM ARMM ARMM ARMM ARMM DK Biofuels Jatropha for Biodiesel Tarlac Province 30,000 has PNOC-AFC Jatropha for Biodiesel Quezon Province 100,000 has Biodiesel Accounts as of September 30, 2008 CAR CAR CAR CAR CAR CAR BENLINC Coconut for CME production Magsinggal, Sto. Domingo, Kabugao (Ilocos Sur) 100,000 has 2 2 2 2 2 2 2 2 2 1 1 1 1 1 1 1 1 1 TIPCO Jatropha for Biodiesel Zambales 10,000 has Highlands Dev’t Coop Jatropha for Biodiesel Ifugao Province 20,000 has PNOC-AFC Jatropha for Biodiesel Bukidnon and Misamis Oriental 160,000 has PNOC-AFC/LGU ZAMBALES Jatropha for Biodiesel Botolan and Iba, Zambales 32,000 has KIBIO 2007 Jatropha for Biodiesel Negros Oriental 10,000 has GMC Oil Palm for Biodiesel Production Laak, Compostela Valley to San Isidro and Asuncion, Davao 30,000 has Bioenergy Farms Jatropha for Biodiesel Zambales 10,000 has HerminioTeves Group Jatropha for Biodiesel Negros Oriental 10,000 has ECO GLOBAL BIO OIL Jatropha for Biodiesel Provinces of Region 12 215,156 has ABUNDANT BIOFUELS CORPORATION Jatropha for Biodiesel Cagayan de Oro 100,000 has ALSONS POWER Jatropha for Biodiesel General Santos City 56,000 has CURCAS ENERGY AUSTRALIA Jatropha for Biodiesel Palawan 100,000 has SUMMARY: NLAQ: 220,000 Has LUB: 332, 100 Has CP: 35,000 Has AM: 731,000 Has TOTAL: 1,318,100 Has GMC Oil Palm for Biodiesel production Dalurong, Bukidnon down to Arakan Valley, Cotabato 30,000 has PNOC-AFC Jatropha for Biodiesel Bohol and Cebu 15,000 has TOBISHIMA CORPORATION Jatropha for Biodiesel Mindanao (TBI) 10,000 has PNOC-AFC Jatropha for Biodiesel Iwahig Puerto Princesa, Palawan 100,000 has PNOC-AFC Jatropha for Biodiesel Lanao del Norte 5,000 has PNOC-AFC Jatropha for Biodiesel General Santos City 30,000 has

14. Biodiesel Accounts as of September 30, 2008

15. Biodiesel Accounts as of September 30, 2008

16. CAR CAR CAR 3 3 3 3 3 3 3 3 3 NCR NCR NCR NCR NCR NCR NCR NCR NCR 5 5 5 5 5 5 5 5 5 4 4 4 4 4 4 4 4 4 8 8 8 8 8 8 8 8 8 6 6 6 6 6 6 6 6 6 7 7 7 7 7 7 7 7 7 4 4 4 4 4 4 4 4 4 CARAGA CARAGA CARAGA CARAGA CARAGA CARAGA CARAGA CARAGA CARAGA 10 10 10 10 10 10 9 9 9 9 9 9 10 10 10 9 9 9 ARMM ARMM ARMM 11 11 11 ARMM ARMM ARMM 11 11 11 ARMM ARMM ARMM 11 11 11 12 12 12 12 12 12 ARMM ARMM ARMM 12 12 12 ARMM ARMM ARMM ARMM ARMM ARMM JGC/ITOCHU San Mariano, Isabela Sugarcane for ethanol production 6,300 has Bioethanol Accounts as of September 30, 2008 CAR CAR CAR CAR CAR CAR CapazBioenergy Inc Sugarcane for bioethanol Capas, Tarlac FIRST PAMPANGA BIOFUELS CORP. Floridablanca, Pampanga Cassava for ethanol production (8,400has) Sweet Sorghum for ethanol production (5,000has) 2 2 2 2 2 2 2 2 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Cavite Biofuel Producers Inc Magallanes, Cavite Sugarcane and molasses for bioethanol Leyte Argi Corp. Ormoc, Leyte Molasses for bioethanol production Negros Biochem Sugarcane for bioethanol Bago City, Negros Occidental 10,000 has JG Summit Holdings Inc Kabankalan, Negros Occidental Molasses for bioethanol production FUELS Inc. Sugarcane for Bioethanol Negros Occidental SAN CARLOS BIOENERGY San Carlos City, Negros Occ. Sugarcane for ethanol production Central Azucarera Don Pedro Inc Molasses for Bioethanol Negros Occidental ALSONS POWER Cassava for bioethanol Misamis Oriental 8,000 has Roxol Bioenergy Corp Molasses for Bioethanol Negros Occidental ISABELA ALCOGAS CORP. Sugarcane for bioethanol Misamis Oriental 20,000 has BASIC ENERGY Sugarcane for bioethanol Zamboanga del Norte 10,000 has ALSONS POWER Cassava for bioethanol Saranggani 8,000 has Southern BukidnonBioenergy Sugarcane for bioethanol Bukidnon 2,000 has ROBSON AGRO VENTURES Cassava for bioethanol S Cotabato and Saranggani 25,000 has EASTERN PETROLEUM Cassava for Bioethanol Saranggani and General Santos City 50,000 has

17. Bioethanol Accounts as of September 30, 2008

18. Bioethanol Accounts as of September 30, 2008

19. CHALLENGES • Improving productivity, cultivation and diversification of feedstocks; • Accelerating development of alternative feedstock including economics of production; • R&D on second generation biofuels feedstock including economics of production; • Village-level processing for jatropha and sweet sorghum; • Developing cost-effective technologies, particularly of extracting and refining; • Extensive R&D efforts in the agricultural aspect for jatropha; • R&D for Jatropha Methyl Ester production; • R&D in production of bioethanol from sweet sorghum; • Presence of feedstock pests and diseases; • Monitoring of biofuel quality, quantity and price; capability-building modules in plantation management; • Assurance of manpower.

20. Incentives for Biofuels Projects • Under EO 226 Income tax holiday • New registered pioneer firms : 6 years from operations • New registered non-pioneer firms: 4 years from commercial • operations • Expanding firm: 3 years from commercial operations or • expansion Notes: Pioneer firms – biofuel projects with investments of over P1 billion Non-pioneer firms- biofuels projects with investments below P1 billion Additional deductions from taxable income for labor expense Source:DOE

21. Incentives for Biofuels Projects • Under EO 226 • Duty-exemption on imported capital equipment, spare parts and accessories • Exemption from contractor’s tax, whether national or local • Tax credit for taxes and duties paid on supplies, raw materials and semi-manufactured products used in the manufacture, processing or production of its export products • Exemption from wharfage dues and any export tax, duty impost and fee-for non traditional export products by registered enterprise Source:DOE

22. Incentives for Biofuels Projects • Under RA 7196 or the PEZA Law: • ITH or exemption from corporate income tax for 4 yrs • After the ITH period, option to pay 5% tax on gross income, in lieu of all national and local taxes • Exemption from duties and taxes on imported capital equipment, spare parts, supplies and raw materials • Domestic sales allowance equivalent to 30% of total sales • Exemption from wharfage dues and export taxes, imposts and fees • Other incentives under EO 226, as may be determined by PEZA Board • Under RA 9337 or R-VAT Law: • Zero percent (0%) Rate for Ethanol and CME Source:DOE

23. Financial Assistance for Biofuels Projects Government financial institutions, such as the following: a. Development Bank of the Philippines; b. Land Bank of the Philippines; c. Quedancor; and d. Other Government Institutions providing financial services Shall, in accordance with and to the extent allowed by the enabling provisions of their respective charters of applicable laws, accord high priority to extend financing to Filipino Citizens or Entities, at least sixty per cent (60%) of the capital stock of which belongs to citizens of the Philippines that shall engage in activities involving production, storage, handling, and transport of biofuel and biofuel feedstock, including blending of biofuels.

24. HIGHLIGHTS OF ACCREDITATION PROCEDURES The following criteria shall guide biofuels and biofuel feedstock producer relative to the identification of feedstock and the utilization of lands for feedstock production: • Cereals that can be used both for food and for biofuel production such as but not limited to corn, and wheat shall not be used for feedstock as biofuel; • The land to be used shall be consistent with the natural expansion of the municipality or locality, as contained in the approved physical framework and land use plan; • The area that will be used is not the only remaining food production area of the community;

25. HIGHLIGHTS OF ACCREDITATION PROCEDURES All agricultural areas classified hereunder shall not be utilized for biofuel production: • All areas covered by government-funded irrigation facilities, either national agency or LGU, designed to support rice and other crop production, and all irrigated lands where water is not available for rice and other crop production but are within areas programmed for irrigation facility rehabilitation by DA and NIA; • All irrigable lands already covered by irrigation projects with firm funding commitments as certified by NIA at the time of the application for land use conversion; • All privately irrigated alluvial plain lands utilized for rice and corn production; and • All agricultural lands that are ecologically fragile, the utilization of which will result in serious environmental degradation

26. EXEMPTIONS The Certification may be issued, except for areas identified above, under the following conditions: • Compliance with the SRA and PCA policy guidelines, as approved by DA, for the utilization of sugarcane and coconut areas; • The areas are evaluated by DA to be underutilized and marginal; and • The proposed project is supportive to agro-industrial development, and will generate additional and alternative livelihood opportunities for the affected community.

27. WHO SHALL APPLY FOR ACCREDITATION • Biofuel Producers: All biofuel producers shall declare their target source of feedstock and will be subjected to an evaluation of DA if the target production area is compliant with the prescribed criteria. • As used in the guidelines, an Independent Biofuel Feedstock Producer shall refer to a Biofuel Feedstock Producer who has no marketing or supply agreement with a Biofuel Producer. • a. Only an Independent Biofuel Feedstock Producer with an effective area exceeding twenty five (25) hectares, either contiguous or fragmented, shall be required to obtain a DA Certification. • b. An Independent Biofuel Feedstock Producer whose effective area is twenty five (25) hectares or less is exempted from securing the DA Certification. • c. A Biofuel Feedstock Producer who has a marketing or supply agreement with a Biofuel Producer shall not be required to secure a DA Certification; Provided, that the Biofuel Producer shall secure the DA Certification as provided in Chapter III, Section 2.4 of this Guidelines. .

28. REQUIREMENTS FOR DA CERTIFICATION The following documents and information are required to be submitted by the Applicant: a. Feasibility Study; b. List of Biofuel Feedstock supplier(s); and c. One (1) copy each of geo-referenced map, vicinity map and lot plan showing the feedstock production areas duly certified by the MPDC of the concerned LGU.

29. PROPOSED STEPS IN ACCREDITATION

30. PROPOSED MEMBERS OF EVALUATION TEAM Chairman: Focal Person (DA Biofuel Feedstock Program) Members: Representative from PCA Representative from SRA Representative from FOS Representative from the DA Agribusiness Lands Investment Center Representative from BSWM Representative from NIA Validating Team: DA-RFU SRA Regional Office PCA Regional Office Local NIA Representative from BSWM

31. DA BIOFUELS FEEDSTOCK PROGRAM TECHNICAL WORKING GROUP • Department of Energy • Department of Science and Technology • Philippine Coconut Authority • Sugar Regulatory Administration • Bureau of Agricultural Research • Bureau of Plant Industry • Bureau of Postharvest Research and Extension • Bureau of Soils and Water Management • University of the Philippines Los Baños • Bureau of Agricultural Statistics • National Agricultural and Fisheries Council • GMA Corn Program • DA – Planning Service • DA – Project Development Service • DA – Field Operations Service • DA – Agribusiness and Marketing Assistance Service • DA – Agricultural and Fisheries Information Service • DA – Goal 1/DA – Convergence • DA – Policy Research Service

32. Philippine Agricultural Development and Commercial Corporation Manages the Philippine Agribusiness Lands Investments Center • The Philippine Agribusiness Lands Investments Center (PhilAgriBiz Lands Center) is the brainchild of Agriculture Secretary ARTHUR C. YAP with the expressed mandate of consolidating basic information about available new agribusiness lands throughout the Philippines and the attendant agribusiness opportunities. • PhilAgriBiz Lands Center offers the following services to anyone seeking to explore the potentials of agribusiness in the Philippines’ new lands.

33. Philippine Agricultural Development and Commercial Corporation Extends general forms of assistance to biofuels investors for their projects’ basic requirements, namely: • Identification of possible plantation areas, which include: - assistance and provision of general support in the identification and evaluation of suitable agricultural lands - endorsement of the project to interested and qualified landowners - provision of complete data and information necessary in the implementation of the project • Consolidation, packaging, and contract negotiation with land owners • Facilitation of endorsements, accreditations, licenses, and permits from concerned government agencies

34. CONTACTS PHILIPPINE AGRIBUSINESS LANDS INVESTMENTS CENTER Department of Agriculture – Office of the Secretary Building Elliptical Road, Diliman, Quezon City MARRIZ B. AGBON President, Philippine Agriculture Development and Commercial Corporation (PADCC) Focal Person, DA Biofuels Feedstock Program Team Leader, Philippine Agribusiness Lands Investments Center Head, DA-DAR-DENR National Convergence Initiative Secretariat for New Agribusiness Land Tel. No.: (+63-2) 926-7976 Email Address: marriz.agbon@gmail.com

35. CONTACTS PHILIPPINE AGRIBUSINESS LANDS INVESTMENTS CENTER Department of Agriculture – Office of the Secretary Building Elliptical Road, Diliman, Quezon City RAINER D. PANTUA Program Manager, DA Biofuels Feedstock Program Senior Project Development Officer, Philippine Agribusiness Lands Investments Center Tel. No.: (+63-2) 926-5446 Email Address: rdpantua@yahoo.com BENJAMIN R. CUEVAS Project Development Officer IV- Biofuels Program Tel. No.: (+63-2) 928-8741 loc. 2121 Email Address: brcuevas@yahoo.com JUDITH ANN MAE M. LUNA Project Development Officer III -Biofuels Program Tel. No.: (+63-2) 926-5446 Email Address: jannchris13@yahoo.com TAMARA JEAN C. PALIS Project Development Officer III -Investment and Financing Tel. No.: (+63-2) 928-8741 loc. 2177 Email Address: tampalis@gmail.com

36. THANK YOU