ILOILO CITY, Iloilo -- Senator Juan Miguel Zubiri urged stakeholders in the sugar industry to put up more plants to produce higher value ethanol amid the continued slump in the price of sugar and to offset the expected slack in foreign investments due to the global economic crisis.

Zubiri said sugar planters should group together and invest in ethanol plants because of the need to boost production as mandated by the Republic Act 9367 or the Philippine Biofuels Act of 2006, which he authored, requiring the addition of bioethanol to gasoline.

"I hope more (local investors) will put up bioethanol plants," Zubiri told reporters at the Western Visayas Renewable Energy Congress here on Friday.

Zubiri said there would be a big problem in producing the needed volume next year and the succeeding years.

The law provides that by February 2009, gasoline sold in the country should have at least five percent ethanol.

By February 2011, the minimum requirement for gasoline fuel sold by oil companies is a 10 percent ethanol blend.

Zubiri said this would require 300 million liters of ethanol by next year and 600 million liters by 2011. But the ethanol plants in San Carlos City in Negros Occidental and in Ormoc City could produce only 40 million liters annually, he said.

"We lack 260 million liters," Zubiri added.

He cited the need for a significant increase in ethanol production to avoid the importation of biofuel from Brazil and Thailand.

"That is completely opposite of what I wanted (in pushing for the law). Filipino farmers should benefit," Zubiri said.

He said there are many sites in the country that would be favorable for bioethanol plants, including in Iloilo and Capiz provinces on Panay Island.

A complete ethanol plant costs around P1.5 billion but existing sugar mills could be converted with an investment of P500 million.

Zubiri said the sugar planters should also consider bioethanol production as an alternative because of the slump in sugar prices in the world market now pegged from P500 to P600 per 50-kilo bag.

Sugarcane is one of the main sources of ethanol, which is considered as a cheaper and cleaner substitute to imported fuel and other fossilized energy sources like diesel and coal.

He said the continued slump in sugar prices could result in more unemployment among sugar industry workers.

Local investors should also pick up the expected slack in foreign investments due to the global economic crisis, according to Zubiri, who noted that the pullout of would-be financiers from New York as a result of the credit crunch has affected three ethanol plant projects.

Zubiri said investing in ethanol plants made economic sense because of the expected surge in domestic demand in the coming years.

Locally produced ethanol would be competitive with gasoline because it would be cheaper than unblended fuel.

Zubiri said the availability of Flex-Fuel Vehicle (FFV), which could use both blended and unblended fuel, could also hasten market growth for ethanol.

The prospects were bright as well for the export of ethanol to Japan, China, and India, he added.

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