MANILA – The leadership of the local coconut industry has dismissed the idea of using palmolein oil as a substitute for coconut oil in biodiesel, citing a substantial surge in world market prices of palmolein.
According to a new release by the Philippines News Agency, president of the Coconut Oil Refiners Association (CORA), the organization had previously considered substituting locally-produced coconut oil with imported palmolein to comply with Republic Act 9367, known as the "Biofuels Act of 2006." The act requires a two percent mixture of coconut oil in diesel sold locally to reduce harmful emissions. However, the president noted that this is no longer a cost-effective measure given the current market prices.
Arranza further elaborated that the increase in palmolein prices may be attributed to unabated smuggling and technical smuggling into the Philippines, creating an abnormal demand for the commodity. "Some local companies are importing palmolein under the pretense of blending it into animal feeds to receive tax benefits. But in reality, they are using it as cooking oil, for mixing in biodiesel, and for other non-tax-exempt purposes," said Arranza, who also serves as chairman of the Federation of Philippine Industries (FPI).
The issue of palm oil smuggling was spotlighted in a 2021 investigation led by Albay Rep. Joey Salceda. The investigation estimated that the Philippine government lost approximately PHP45 billion in potential tax revenue over six years due to the illegal activity. Salceda expressed a preference for a constructive approach to resolve the issue, focusing on structural solutions rather than merely identifying culprits.
Meanwhile, Arranza disclosed that there is an ongoing smear campaign against the leadership of both CORA and FPI, organizations deeply involved in private-sector efforts to curb smuggling. Without specifying details, Arranza mentioned that the campaign began several months ago when the organizations began collaborating with government agencies to probe palm oil smuggling.
CORA and FPI have joined hands with the National Bureau of Investigation (NBI) and the Bureau of Internal Revenue (BIR) in ongoing investigations into the alleged involvement of several local firms in palm oil smuggling. In March, the organizations, along with the advocacy group Fight Illicit Trade (FightIT), signed a memorandum of agreement with the Philippine Coconut Authority (PCA) to collaboratively tackle smuggling and prevent the proliferation of substandard products in the domestic market.