Coconut Oil as Diesel Fuel Exemption EO 827

Executive Order No. 827 is issued by the President under powers vested in Sec. 290-A of the National Internal Revenue Code and other laws.
The Order is driven by the need to address an imbalance between supply and demand for middle distillate fuels by developing indigenous motor fuel substitutes.
The Order recognizes that using coconut oil as a diesel fuel extender is technically and economically feasible.
The Order is intended to alleviate fuel imbalance, absorb the country’s coconut oil surplus, and support the coconut industry and the livelihood of coconut farmers.

The Order references a coco-diesel program approved by the Cabinet Executive Committee for implementation.
The referenced coco-diesel program uses a blend of a maximum 5% coconut oil and 95% diesel fuel.
The referenced blending program applies to nationwide distribution and sale for automotive purposes.

Section 1 exempts coconut oil used as engine fuel, whether in pure state or as a blending component for diesel fuel.
The exemption under Section 1 applies to coconut oil from coconut levy and sales tax.
The exemption under Section 1 also covers the special fund impost and the specific tax normally applied to diesel fuel.
Section 2 requires the Ministry of Energy to promulgate implementing rules and regulations.

Section 2 requires the Ministry of Energy to consult the Ministers of Finance and the NEDA, and to act upon recommendation of the Commissioner of Internal Revenue.
Section 2 directs the Ministry of Energy to promulgate appropriate rules and regulations to implement Executive Order No. 827.
Section 3 requires the Philippine Coconut Authority and the Board of Energy to promulgate rules and regulations necessary to implement the Order.
Section 3 requires consultations with the Ministry of Energy and the NEDA, and in consultation with the Ministers of Energy and the NEDA.

Section 4 provides that Executive Order No. 827 takes effect immediately.
The Order becomes effective on issuance, as the effectivity clause is stated without a publication or delayed compliance period.