D&L sees limited impact from proposed biofuel suspension

LISTED specialty food ingredients and oleochemicals manufacturer D&L Industries, Inc. said a proposed temporary suspension of biofuel blending is not expected to have a material impact on its business under current market conditions.

“Based on prevailing market conditions, the price differential between biodiesel-blended diesel and pure diesel remains well below the five percent threshold indicated in the proposed legislation. As such, we do not expect any material impact under current market conditions,” D&L President and Chief Executive Officer Alvin D. Lao said in a statement on Tuesday.

The company said the price differential currently stands at about 1.33%, with diesel priced at approximately P90 per liter.

The Senate is debating a bill, certified as urgent by President Ferdinand R. Marcos, Jr., that would allow the President to suspend the biofuel blending mandate under the 2006 Biofuels Act for up to one year during periods of abnormal fuel price increases.

The proposed measure would allow the government to manage pump prices amid volatility in global oil markets. The suspension would apply only if blended fuel costs at least 5% more than pure fuel.

D&L’s biodiesel operations are conducted through Chemrez Technologies, Inc., a Philippine producer of coconut-based biodiesel.

“The proposed measure is intended as a temporary price stabilization mechanism and does not repeal the Biofuels Act or alter the country’s long-term policy direction toward renewable fuels. We therefore expect the long-term fundamentals of the biodiesel industry to remain intact,” he said.

“Chemrez has the flexibility to redirect production toward higher-value coconut-based oleochemical exports should domestic biodiesel demand temporarily soften. Global demand for sustainable specialty ingredients remains robust. The operational flexibility and resilience we have built over the years allow us to navigate evolving market conditions while continuing to deliver stable growth,” Mr. Lao added. 

He said the company supports efforts to balance fuel price management with the continued development of the domestic biofuels value chain, including its role in supporting coconut farmers and advancing sustainability and energy security.

“We remain committed to engaging constructively with policymakers and industry stakeholders as discussions on the proposed measure progress,” Mr. Lao added. — Alexandria Grace C. Magno