February 20, 2017, 4:47 pm
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Challenges on energy in Asean

THE PHILIPPINES must do solid efforts in order to cope with the challenges and reap the benefits of the Asean economic integration that will be implemented starting at the end of 2015.

According to Department of Energy (DOE) Undersecretary Zenaida Monsada, meeting the required Euro IV emission standard is one of the main issues that the energy industry is facing in the upcoming integration. 

“It is quite a challenge since Asean members are very varied in culture, geography and other factors,” Monsada said.

Under the Euro IV emission standard, fuel products that will be sold should only contain sulfur content of 50 parts per million (ppm). At present, most Asean nations are still under the Euro II emission standard where the allowable sulfur content is 500 ppm. 

The sulfuric content of fuel products are known to be major environmental pollutants which can cause heart and lung diseases and can raise the risk of developing cancer. 

When the integration is implemented, all vehicles that will be registered for the first time are also compelled to be Euro IV standard compliant. 

The government, however clarified that vehicles that are currently in use and not compatible with the Euro IV standard will still be allowed to ply the roads but will not be issued a registration for a new owner. 

Some environmentalist groups have even advocated that the new vehicle emission standards be implemented earlier than 2016 as they claim that it would take about 15 years to completely replace all vehicles to those that are Euro IV standard compliant.

Monsada said adoption of the Euro IV emission standards will not significantly change the demand for oil products but could possibly raise the prices.

“Our total oil demand is 310,000 barrels a day. Four to six percent is the expected change in that demand after 2015,” she Monsada said.

She added: “We expect Euro IV to be more expensive unless there would be enough supply for the whole region.”

Monsada  said the country would most likely be dependent for the supply of Euro IV fuel on neighboring countries.

Discussions are ongoing whether or not to allow the sale of Euro II standard gasoline in the region after 2015.  

Benchmark standard blend for biodiesel

Another concern that the energy industry is facing with the onset of the Asean Economic Community is how to come up with a uniform or standard benchmark for biodiesel blends.

The use of biodiesel aims to reduce fuel imports, lessen vehicle emissions and encourage shift to cleaner fuel as well as bring additional income to farmers.

The current mandated blend for coconut based biodiesel in the country is 2 percent under the Biofuels Act of 2006. The government is still uncertain whether or not a higher blend of 5 percent will be feasible in the future.

In the Philippines, coconut is being used as feedstock for biodiesel blends. However, Monsada said “We are struggling for coconut to be recognized as a standard for biodiesel since it is very saturated.”

Palm oil, jatropha curcas plant and vegetable oil are the feed stocks being used by other Asean countries for their biodiesel blends.

The government said for the Philippines to negotiate better deals, it is important that the Asean market for biodiesel blends be harmonized in our favor.

“We have to learn from the EU (European Union) experience in implementing Asean integration,” Monsada said.

Under Asean, no tariffs are slapped on products traded among member-nations, including oil and petroleum products.
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