PAGUDPUD, Ilocos Norte -- A deal that would allow Japan to use at least 600,000 hectares of land in the Philippines for biofuel production has taken shape on a huge tract of grasslands here, site of the country’s first and largest coconut biodiesel project.

The Department of Environment and Natural Resources in Ilocos Norte found the area in the village of Caunayan to be suitable for coconut plantation after inspecting it last year.

Juan de los Reyes Jr., provincial environment and natural resources officer (Penro), said local officials were itching for the project to take off because of long-term benefits for residents in terms of livelihood and income opportunities.

The project will be a joint venture of Philippine BioEnergy Northern Luzon Inc. (Benlinc) and its Japanese partner, Pacific Bio-Fields Corp., headed by its president, Moriaki Hayashida.

The plantation will cover up to 600,000 hectares of public, nondisposable land in northern Luzon.

Ilocos Norte Representative Roque Ablan Jr. and former Ilocos Sur Rep. Salacnib Baterina, the project proponents, said their Japanese counterparts were pouring in P3.5 billion to grow coconuts that would be used as biofuel for Japan’s public transport system.

Once processed, the coconut is converted into coconut methyl ester, an essential component for the production of biodiesel. The output will be shipped to Japan to meet that country’s demand for biofuel.

“This project is certified as viable. We are merely waiting for the development plan [from Japanese investors],” De los Reyes said.

Groundwork for the coconut plantation began in the last quarter of 2008.

Environment Secretary Joselito Atienza asked the provincial DENR last year to identify an ideal site to grow vast amounts of coconut seedlings.

Investors wanted a large tract of land that could be used under a lease agreement with the government.

Representatives of Japanese counterparts surveyed land parcels in Caunayan and wanted a barren area where there are no trees.

“The investors were conservative with paper work and they did not want to cut down trees,” De los Reyes said.

He said the Penro staff took time to search for a feasible land for a coconut plantation because most land parcels were either saddled with legal impediments or were covered by tenurial agreements with private individuals.

De los Reyes said the land’s documents have been ironed out and the last step for the project to be launched would be the development plan.

The public lands will be covered by a special land use agreement with tenurial rights of up to 50 years.

While coconut seedlings will be provided by the Philippine Coconut Authority, the plantation area will require additional seedlings from other parts of the country, such as Zamboanga City. A processing plant will be built in nearby Pasuquin town.

On top of coconut seedlings, the DENR recommended the planting of agroforest trees using the inter-crop method to help reduce the effects of global warming.

De los Reyes said the plantation area could be expanded to other villages in Pagudpud to the northern town of Adams and the neighboring province of Cagayan. Cristina Arzadon, Inquirer Northern Luzon