Chemrez Technologies, Inc (CTI), bringing the best out of Cocobiodiesel

Chemrez Technologies, Inc (CTI), bringing the best out of Cocobiodiesel

Chemrez Technologies,Inc (CTI), is a leading oleochemical company in the Philippine and one of two pioneering companies in the production of coconut methyl ester (CME) for biodiesel use. Chemrez has been in the forefront of the cocobiodiesel development since the concept of biodiesel was introduced to the United Coconut Association of the Philippines (UCAP) by the Asian Institute of Petroleum Studies Inc (AIPSI) in August 2001.

Being a company that understands the limitless potential of coconut in both oleochemcial and petrochemical applications, Chemrez collaborated with AIPSI in 2002 to spearhead the private sector participation to resuscitate the dying coconut industry through the introduction of cocobiodiesel. Its collaboration with AIPSI was a merging of oleochemical and petrochemicals expertise in the development of cocobiodiesel, a high value and sustainable secondary product of coconut. The high volume demand for cocobiodiesel when used as blend to diesel fuel was a clear solution to soften the impact of the foregone export market that had fallen sharply to almost zero.

With all the benefits of cocobiodiesel coming to light and becoming clear that it can uplift the Philippine economy and environment in the near future, Chemrez broke ground in October 2003 to construct a continuous transesterification plant, the first in Asia, for the production of coco methyl ester (CME) as cocobiodiesel. The construction was completed in 2005 and became fully operational in 2006.

Now, CME producers had grown to a total of 11 as of 2013 from only two CME producers in 2002. Chemrez was elected to lead the biodiesel association (TPBA) in bringing the best out of cocobiodiesel in terms of its huge contribution to “inclusive growth”, the main focus of government spending in 2014. Cocobiodiesel even at low blend has done its part in resuscitating the health of the Philippine coconut industry. It had alleviated poverty of coco farmers; eliminated air pollution and city smog ( specially in Baguio City); attained clean air and enhanced the wellness of public health; reduced fuel import dependence; promoted energy security; mitigated climate change; reduced national fuel consumption through mileage gain; encouraged more investments in coconut productivity; and promoted a form of new economics quite responsive to total national well-being—the “inclusive growth”; and continues to do so.

Accordingly, the company is confident in providing their customers the best value of products and services through their significant investments in R&D and logistics. “Going forward, we will continue to develop and make new products in line with the principles of green chemistry – using organic and sustainable feedstock to replace petrochemical based materials in formulations of home care and personal care products.”

But unfortunately much of the benefits of cocobiodiesel are not counted for by government “economic think-tank,” particularly those not directly measurable in GDP terms (i.e. monetized value of products and services). Because of this, the advocates for B5 which includes the Philippine Coconut Authority are putting greater efforts to promote the huge contribution of B5 on inclusive growth. Although not directly measurable in GDP terms, due to absence of statistical data, the benefits of cocobiodiesel amount to billions of pesos.

An annual diesel demand of 7.1 billion liters, for instance, the impact of B5 to economy, environment and social benefits could translate to Php 46.8 billion pesos per year more or less ( P6.59/li x 7.1 billion liters).

For the most part of the year 2013, the price of CME to oil companies had been lower than diesel MOPS by about P2/liter. But just like petroleum, the price of CME is cyclic. At the present time, the price of CME is higher than the landed cost of diesel but it should be noted that the actual cost effect is only 5% of the price variance between CME and diesel (amounting to a few centavos). The consolidated return translates to billions of pesos worth of benefits per year.

Through tax incentives, continued support for renewable materials in particular products using indigenous feedstock such as coconut, and other government support to crack down smuggling, the producers of cocobiodiesel like Chemrez can become more competitive.

 

 

Dean Lao, Jr.
Managing Director