Local coconut stakeholders have expressed differing views on the government’s plan to suspend the scheduled implementation of the 4 percent coco methyl ester (CME) blend (B4) in all diesel products sold in the country by October 2025.
The Philippine Coconut Authority (PCA), a government agency that is part of the National Biofuels Board (NBB), was the first to announce the plan to suspend implementation last week, to prevent possible inflationary effects.
The chairman of the Federation of Free Farmers (FFF), Leonardo Montemayor, however, warned on Sunday that such a move may “sacrifice” the welfare of coconut farmers.
The FFF chairman explained the increase in biodiesel blend was first enacted to help local coconut farmers have a bigger, diverse and lucrative market for their coconut produce, encourage more coconut production, and realize the beneficial impact of biofuels on the environment.
“Right now, the blend is at 3 percent. So, suspending an increase in the blend indicates that the government is not serious in implementing the Biofuels Act. Farmers will again be sacrificed under the mantra of ‘preventing’ inflation,’” Montemayor said.
In a separate message, Danilo Fausto, president of the Philippine Chamber of Agriculture and Food Inc., deemed the planned suspension as “appropriate,” saying the quality and quantity of local coconut production should be improved first to sustain and make the Biofuels Act program work.
“I think the decision to suspend the implementation of the biodiesel blend is appropriate until the time that the coconut industry has proven that it has enough supply to support and sustain the policy,” Fausto expressed.
Meanwhile, Dean Lao Jr., Chemrez Technologies Inc. president, expressed his support for the postponement. He stressed, however, that the government must clarify when it intended to implement the higher blend as it would take at least five months for the industry to serve and comply with the requirements for a higher biodiesel blend.
“Coconut is our feedstock for biodiesel and the El Niño of 2024 adversely affected supplies in 2025. The NBB and PCA have evaluated the supply situation and have given a sensible recommendation to postpone B4,” Lao said.
“The industry awaits a more definite date for the resumption of the B4 mandate from the NBB. It needs at least five months in advance to prepare for implementation. The progression towards B5 (5 percent biodiesel blend) remains a sound and sustainable solution for the Philippines to attain its economic, environmental and health goals,” he added.
Chemrez is currently the country’s biggest producer of CME.
Chemrez is currently the country’s biggest producer of CME.
Jayson Cainglet, executive editor of the Samahang Industriya ng Agrikultura, said they understood the government’s move to suspend CME B4 due to insufficient copra supply locally.
However, he pointed out that an increased biodiesel blend would have helped coconut producers in terms of farmgate prices when prices are collapsing.
“To implement it now will make fuel pump prices more expensive — again as policies tend toward supporting consumers’ concern… Consumers are always being protected, more often, at the expense of local producers,” Cainglet said.
As of Friday, June 13, the Department of Energy (DOE) said the suspension of the 4-percent CME blend or B4 has been virtually approved and was just waiting for the signatures of officials from all involved agencies, to be enforced.
The DOE Secretary chairs the NBB, with members coming from the PCA, Department of Trade and Industry, Department of Agriculture, Department of Finance, Department of Labor and Employment, Department of Science and Technology, and the Sugar Regulatory Administration.
DOE Undersecretary Alessandro Sales said that since the B4 implementation by October 2025, has been virtually suspended, the scheduled B5 upgrade by October 2026 has been put on hold too.
“This was decided because of the prevailing high cost of coconut oil, which is the principal feedstock for our CME as the biodiesel component in the diesel being sold in the Philippines,” he explained.
At the beginning of 2024, the price of coconut oil in the international market was about $1,100 per metric ton (MT) but gradually jumped to a peak of over $3,000 per MT, Sales said.
“The price last week has now subsided a bit, just below $3,000 per MT. But still, it is a significant increase, and the increase actually translates to a higher cost of diesel at the pump because of the mandate, and increasing the mandate now to B4 would add to this price pressure,” Sales explained.
The DOE earlier said the increase in the CME blend would benefit coconut farmers, biodiesel producers and other stakeholders in the coconut industry with a ready market for around 900 million additional coconut nuts required to produce 100 to 120 million liters of CME requirements to satisfy a 1-percent mandatory increase.
Based on the latest data available from the Philippine Statistics Authority, however, the country produced a total of 14.5 million MT of husked coconut in 2024, a 2.6 percent drop from 2023’s 14.89 million MT. With the decreased local production due to the El Niño in 2024, more importation of coconut oil to meet the requirements of the CME B4 would come into the equation.
A report by the US Department of Agriculture dated April 2025 expected the Philippines to produce 1.63 million MT of coconut oil from October 2024 to September 2025.
Of this volume, the Philippines would export 1.13 million MT but would still import 80,000 MT, the USDA report said.
For the same period, the USDA report projected the domestic consumption of coconut oil at 560,000 MT, wherein 220,000 MT would be for food use and the remaining 340,000 MT for industrial use.
