QuestionsQuestions (Republic Act No. 9367)
It aims to reduce dependence on imported fuels while protecting public health and the environment; mitigate toxic and greenhouse gas emissions; increase rural employment and income; and ensure alternative renewable energy without detriment to natural ecosystems, biodiversity, and food reserves—by mandating the use of biofuels and establishing a biofuel program.
“Biofuel” refers to bioethanol, biodiesel, and other fuels made from biomass for motive/thermal/power generation, with quality specs per the PNS. “Bioethanol” is ethanol (hydrous/anhydrous) suitably denatured for motor fuel, conforming to PNS. “Biodiesel” is Fatty Acid Methyl Ester (FAME) derived from vegetable oils or animal fats and other biomass-derived oils, technically proven and approved by the DOE, and conforming to PNS.
Bioethanol: (1) within 2 years from effectivity, at least 5% bioethanol must comprise the annual total gasoline volume sold/distributed by each oil company; blends must contain at least 5% by volume and conform to PNS. (2) within 4 years, the NBB may recommend to DOE a minimum of 10% blend (DOE to mandate), subject to feasibility and supply; during the 4-year period, imports are allowed only to the extent of shortage as determined by the NBB. Biodiesel: (1) within 3 months from effectivity, minimum 1% biodiesel by volume must be blended into all diesel fuels sold, conforming to PNS. (2) within 2 years, the NBB may recommend to DOE a minimum 2% blend, possibly increased based on domestic supply/availability.
The NBB monitors implementation and evaluates expansion of the National Biofuel Program. It monitors biofuel supply/utilization and can require reports from producers/blenders/distributors. It determines availability of locally-sourced biofuels and recommends to DOE the appropriate locally-sourced level/percentage. It reviews and recommends adjustments to the minimum mandated blends; however, after the first four years, the minimum mandated blends (5% bioethanol and 2% biodiesel) cannot be decreased.
During the 4-year period, oil companies may be allowed to import bioethanol only to the extent of any supply shortage of locally-produced bioethanol, as determined by the NBB.
Within six months from effectivity, the DOE must gradually phase out harmful gasoline additives such as MTBE, following duly accepted international standards.
Prohibited acts include: (1) diversion of biofuels to purposes other than those envisioned; (2) sale of biofuel-blended gasoline/diesel that fails to meet the minimum biofuel blend by volume; (3) distribution/sale/use of automotive fuel with harmful additives (e.g., MTBE) exceeding limits determined by the NBB; (4) noncompliance with PNS and DOE guidelines; and (5) false labeling of fuels and blends. Common theme: mandatory compliance with blend requirements, quality/spec standards, and truthful labeling.
Upon conviction, the penalty is imprisonment of one (1) to five (5) years and a fine from PHP 1,000,000 to PHP 5,000,000. DOE can confiscate nonconforming products and determine their disposal/utilization, stop/suspend business operations for refusal to comply with DOE orders, and impose administrative fines/penalties for violations of the Act, its IRR, and related issuances.
For associations/partnerships/corporations, the penalty is imposed on the partner, president, chief operating officer, chief executive officer, directors, or officers responsible for the violation.
Within three months from effectivity, DOE must: (1) formulate IRR; (2) prepare the Philippine Biofuel Program consistent with the Philippine Energy Plan and existing biofuels programs; (3) establish technical fuel quality standards and ensure compliance with PNS; (4) establish guidelines for transport/storage/handling of biofuels; (5) impose fines/penalties for certain prohibited acts; (6) stop sale of nonconforming fuels; and (7) conduct an information campaign promoting biofuels.
Biofuel component specific tax is zero (0) per liter for local/imported biofuel components, while gasoline/diesel components remain subject to prevailing specific tax rates. VAT exemption applies to sale of raw materials used in biofuel production (e.g., coconut, jatropha, sugarcane, cassava, corn, sweet sorghum). Distillery slops used as liquid fertilizer and other agricultural purposes are considered “reuse” and exempt from wastewater charges under RA 9275 (subject to guidelines/monitoring by DENR and approval by DA). Government financial institutions must prioritize financing for eligible Filipino citizens/entities with at least 60% Filipino capital engaged in specified biofuel activities, as certified by DOE.
NBB is chaired by the Secretary of the DOE and includes the Secretaries of DTI, DOST, DA, DOF, DOLE, and the Administrators of PCA and SRA. DOE Secretary must convene the NBB within one month. It is assisted by a Technical Secretariat attached to the Office of the DOE Secretary.
Section 10 provides a special clause: SRA must always ensure domestic sugar supply meets domestic demand and that sugar prices remain stable. It recommends importation when necessary and makes appropriate adjustments to minimum access volume parameters for sugar in the Tariff and Customs Code.
A Congressional Oversight Committee (“Biofuels Oversight Committee”) is constituted. It has 14 members: the Chairmen of the Energy Committees of both Houses as co-chairmen, with the Chairmen of Agriculture and Trade & Industry Committees as ex officio members, plus four additional members from each House designated by the Senate President and Speaker; minority gets pro-rata representation but at least one member.
DOE, consulting NBB, stakeholders, and concerned agencies, must promulgate the IRR within three months from effectivity. Before it takes effect, the draft IRR must be posted on the DOE website for at least one month and published in at least two newspapers of general circulation—ensuring public notice and participation prior to effectivity.
It clarifies that the Act should not be interpreted as prejudicial to clean development mechanism (CDM) projects that cause reductions of CO2 and greenhouse gases through biofuels use.
The Act takes effect fifteen (15) days after publication in at least two newspapers of general circulation. Compliance timelines in Sections 4 and 5 are counted from “effectivity,” meaning each deadline (e.g., 3 months, 2 years, 4 years) is relative to the date the Act becomes effective under Section 21.