Law Summary
Definitions
- Includes terms such as AFTA, Alternative Fuel Vehicles/Engines, Bioethanol, Biodiesel, Biofuels, Biomass, and relevant government agencies.
- Clarifies technical terms relevant to biofuels and their standards.
Phase-Out of Harmful Gasoline Additives
- DOE to phase out harmful additives like MTBE within six months.
- Adheres to international standards.
Mandatory Use of Biofuels
- Within 2 years: 5% bioethanol blend in gasoline is mandatory.
- After 4 years: NBB to recommend 10% bioethanol blend feasible.
- Biodiesel: 1% blend mandatory within 3 months; 2% blend after 2 years subject to NBB recommendation.
- Bioethanol and biodiesel blends must comply with PNS.
- Allows import of bioethanol in case of local supply shortage.
Incentives
- Zero specific tax on local/imported biofuels components.
- VAT exemption on raw materials for biofuel production.
- Water effluent reuse exempt from wastewater charges if guidelines are met.
- Government financial institutions to prioritize loans for biofuel-related activities.
Powers and Functions of DOE
- Formulate rules/regulations and biofuel program.
- Establish fuel quality and handling guidelines.
- Penalize violations and stop sales of non-compliant fuels.
- Conduct information campaigns promoting biofuels.
Creation of National Biofuel Board (NBB)
- Composed of DOE Secretary (Chairman) and other secretaries from key agencies.
- Assisted by a technical secretariat.
- Convened within 1 month of the law's effectivity.
Powers and Functions of NBB
- Monitor and evaluate the National Biofuel Program.
- Monitor biofuel supply and utilization; require reporting from producers/distributors.
- Recommend adjustments in biofuel blend mandates.
- Suggest alternative fuel technology programs.
- Recommend biofuel use in air transport.
- Propose actions addressing economic, technical, environmental, and social impacts.
Security of Domestic Sugar Supply
- SRA must ensure stable sugar supply and prices.
- Recommends sugar imports as necessary.
Roles of Government Agencies
- DOF monitors production/importation via BIR and BOC.
- DOST and DA identify and develop viable feedstock.
- DA develops national program for feedstock production and ensures supply.
- DOLE promotes employment and worker protection.
- Tariff Commission creates a tariff line for biofuels considering WTO/AFTA.
- LGUs assist in monitoring biofuel distribution and use.
Prohibited Acts
- Diversion of biofuels from intended uses.
- Selling biofuel-blends below mandated percentages.
- Use of automotive fuels with harmful additives exceeding limits.
- Noncompliance with DOE and PNS guidelines.
- False labeling of fuels.
Penal Provisions
- Penalties include 1-5 years imprisonment and fines from P1,000,000 to P5,000,000.
- Confiscation of non-compliant products.
- DOE can stop/suspend non-compliant businesses.
- Administrative fines and penalties for violations.
Funding
- Initial funding from DOE appropriations.
- Subsequent funding included in annual General Appropriations Act.
Implementing Rules and Regulations
- DOE to issue IRR within 3 months in consultation with NBB and stakeholders.
- Draft IRR must be published online and in newspapers before effectivity.
Congressional Oversight Committee
- Composed of 14 members from Senate and House.
- Chairs of Energy Committees as co-chairmen.
- Includes Committees on Agriculture, Trade and Industry.
- Minority representation guaranteed.
Benefits for Biofuel Workers
- Does not diminish benefits of sugar workers under existing laws.
- NBB to establish similar mechanisms for other biofuel workers.
Special Clause
- Act does not prejudice clean development mechanism projects involving biofuels.
Repealing Clause
- Repeals conflicting provisions of laws including aspects of Tax Reform Act of 1997.
Separability Clause
- Invalidity of any provision does not affect the rest of the Act.
Effectivity
- Effective 15 days after publication in two newspapers of general circulation.