SAN CARLOS CITY, Negros Occidental — Southeast Asia’s first sugarcane-based ethanol and co-generation plant, which was inaugurated here Friday, will help wean the Philippines away from dependence on fossil fuels, officials said.

The P3-billion San Carlos Bioenergy Inc. (SCBI) facility will produce nearly 40 million liters of ethanol annually, representing about 10 percent of the nation’s requirements, as mandated by the Biofuels Act of 2006.

“This is a major milestone in the government’s effort to reduce dependency on imported sources of energy, and to have energy security coupled with social equity and environmental sustainability,” said Energy Secretary Angelo Reyes, who led government officials at the inauguration ceremonies Friday.

“We should have 20 more replications of this plant all over the Philippines,” he said.

President Gloria Macapagal-Arroyo, who was scheduled to inaugurate the plant, could not make it because the “weather did not permit it,” Reyes said.

But through Reyes, Ms Arroyo said that the plant was the realization of her dream to make the Philippines less dependent on imported fuel.

According to Reyes, the bigger dream is for the country to be weaned away from conventional sources of energy toward renewable sources.

“The dream is go renewable and (San Carlos) Bioenergy here has shown the way,” he said.

Ethanol, or ethyl alcohol, the same type of alcohol found in alcoholic beverages, can be used as a fuel. Because it is easy to manufacture and process and can be made from common crops such as sugar cane, potato, manioc and corn, it is being seen as a biofuel alternative to gasoline. Unlike petroleum, bioethanol is a renewable resource.

Natural for renewable energy

The Philippines has a distinct competitive advantage because it is a natural for renewable energy, Reyes said.

He noted that the country was already No. 2 in the world in geothermal energy. As for solar energy, he said the Philippines is located near the equator and has no winter.

Reyes also said that the country has plenty of wind channels to produce wind energy, and could tap ocean energy because it has a coastline that’s longer than that of the United States.

Arthur Aguilar, chair of the National Renewable Energy Board, noted that Negros island, with its vast renewable resources, from geothermal and wind to ethanol, has the potential to become the Saudi Arabia of the Philippines.

Aside from producing ethanol, the SCBI will also generate eight megawatts of power, a portion of which will be exported to the local grid to support rural electrification, according to SCBI chair Jose Maria Zabaleta.

Zabaleta said Petron Corp. has already contracted 100 percent of the plant’s ethanol production while the Victorias Manapla Cadiz Rural Electric Cooperative will be buying the power generated by SCBI.

Benefits for farmers

Reyes said the President, who had been monitoring the facility’s construction, was happy that the plant had become operational to benefit farmers and growers.

The SCBI, which is funded by the Development Bank of the Philippines, buys sugarcane for ethanol conversion from planters in this city and surrounding areas.

The plant began operations early this year and made its first ethanol shipment to Petron in March.

The ethanol produced in San Carlos City is blended with gasoline to create a 10-percent ethanol blend available in Petron stations, primarily in Luzon and major cities.

“The project is a model that can successfully be replicated to produce fuel and power from both big and small farmers. It is the Philippines’ answer to the call to action to mitigate climate change because our climate and soils are ideal for it,” Zabaleta said.

Carbon credit offsets

Zabaleta also reported that the plant is the first to obtain the approval for carbon credit offsets under the Clean Development Mechanism (CDM) of the Kyoto Protocol.

The Kyoto Protocol, an international agreement between more than 170 countries, has instituted a tradable permit scheme to provide a way to reduce greenhouse gas emissions by giving them monetary value. Participating governments and private companies earn carbon credits, or units of carbon emission, which can be traded on the marketplace.

SCBI chair emeritus Menardo Jimenez explained that the project’s aim was sustainable farming for renewable fuels and power.

There was a need to provide a model for this concept, which the SCBI has done with its facility, Jimenez said.

According to a statement from Malacañang, the President hoped that more bioethanol plants would be put up in Negros’ sugar mills to feed the requirements not only of motor vehicles, industrial equipment and electrical appliances but of the country’s main power grids.

The project has created up to 500 industrial jobs in the local community and supports 8,000 year-round jobs for farmers, the statement said.

With SCBI going operational, plantation owners and farmers now get better prices for their produce, it said.

‘Planter’s market’

San Carlos City is now considered a “planter’s market,” with sugarcane prices rising to more than P1,700 per 50 ton cane from less than P1,500 per ton cane in the previous year, it added.

Reyes noted that the first sugar syrup factory was established at the San Carlos mill in 1908.

“Now after 100 years, we are putting up the first bioethanol plant in the country right here,” he said.

Reyes said he shares the President’s hopes that the San Carlos bioethanol plant will be replicated all over the country so that “we can finally liberate ourselves from the uncertain fuel oil situation and promote cleaner energy in our local industries.”