The Economic Impact of Higher-Blend Biodiesel on the Philippine Coconut Industry and end-Users amid Rising Oil Prices & Falling Prices of Coconut Oil

Abstract

Amid the weakening global prices of coconut oil and rising prices of crude oil, government agencies and coconut farmers in the Philippines have lobbied for an increase in biodiesel blend from 2% to 5% in order to boost the utilization of coconut oil in domestic diesel and support the local industry. However, Philippine economic managers oppose the move because of the inflationary effect in diesel prices. In order to provide a holistic evaluation that could help devise the country's biodiesel roadmap, the study determined the net economic impact of higher-blended biodiesel on the biofuel supply chain. The economic impacts on producers and consumers were assessed at three biodiesel blend rates-3%, 5%, 10%. Results showed that benefits outweighed the losses and that the rising oil prices may encourage higher bio-content and better prices for the farmers.