Coco-biodiesel: the next big thing after coconut oil

 

The product.  Coco-biodiesel, or CME (Coco Methyl Ester), is a type of biofuel derived from coconut oil.  It can be used alone, or blended with petrodiesel, to run diesel engines.

CME emits less smoke and is almost sulfur free.  Its chemical signature and viscosity are well within acceptable limits for use in diesel engines as set by the U.S. National Biodiesel Board.

The Department of Energy (DOE) described CME as having properties that protect the engine from wear, clean the fuel system, and dissolve and clean carbon deposits in the combustion chamber.  The result is more efficient engine combustion, which translates to increased engine power, longer mileage and less emission.

The production of CME involves a simple process of oil extraction and transesterification (generic name for chemical reaction wherein two reactants, normally alcohol and an acid, form an ester as the reaction product), as follows:

1.  Extraction of oil from copra

2.  Introduction of reactants (e.g.:  methanol and lye) into the coconut oil

3.  Separation and storage of glycerin, a by-product

4.  Extraction and storage of methanol (for reuse) through heating and distillation

5.  Filtration and storage of pure CME

About 20% of coconut oil used to produce CME comes out of production as glycerin by-product.  Glycerin (a polyol compound) is a colorless, odorless and viscous liquid which is used to produce a wide variety of products such as soap, cosmetics, pharmaceutical formulations and organic fertilizer.  The inventory of glycerin can either be sold in bulk as a raw material or used to manufacture “secondary” products.   

Source of raw material (and “conditions on the ground”).  Coconut is the most abundant and versatile agricultural resource in the country.  Roughly 3.3 million hectares of farmland in 68 of 79 provinces in the country are planted to coconut. 

Its industry in the Philippines is an industry of immense wealth.  Through the years billions upon billions of dollars have been produced by that industry on bent backs of Filipino farmers, farm hands and factory workers.  Even today, and notwithstanding its consistent decline in production, market and prices, the industry remains the country’s top agricultural exporter with an average annual revenue of close to US$900 million. 

Ironically, poverty is most widespread in provinces where coconut farming is the main source of income

Small coconut landowner-operators are not much better either.  In fact, the mean family income of these small coconut farmers has been consistently below the mean family income of all agricultural and non-agricultural families, and the principal reason for this is their inability to fetch a higher value for their coconut in the local market. 

Averaging 4 hectares or less in size, these owner-operated farms cover nearly 1.9 million hectares, representing roughly 60% of all coconut farms in the country today.

Why are these farmers unable to fetch a good price for their produce in the local market?  For one, the end-buyer of their coconut is neither the Filipino middleman in their neighborhood nor the oil mill some distance from their farms.  Roughly 80% of our annual production of coconut eventually ends up in the inventories and factories in the United States and Europe.  Secondly, apart from coconut oil, the end-buyer can choose from more than a dozen sources of fats and vegetable oils in the world market.  When the supply of coconut oil is not constant, either in quantity or quality or both, the end-buyer would shop around for substitutes, and find he would.  The substitutes may be inferior to coconut but, nonetheless, they are ready substitutes, cheaper and in abundant supply.

Translated into our market, the domestic price of copra is squeezed down further by an army of profit-hungry middlemen, traders, processors, millers and exporters, leaving the poor Filipino farmers with the lowest possible price for their copra. 

Sustainability of production and supply.  A global auto industry that shifted to biofuel engines is the ideal condition for CME to flourish in the world market.  But this is not going to happen anytime soon.  For now the future of CME lies in our local market and in our ability to explore and exploit its potentials.  We can begin with the two biggest consumers of imported oil in the country today, namely power plants and motor vehicles.

The Land Transportation Office has issued motor vehicle registrations to over 900,000 public utility vehicles (PUVs) for the year 2010.  A mere 1% blend of CME with the daily fuel consumption of these PUVs (passenger jeepneys and buses) would result in an annual requirement for millions of liters of CME.

The National Power Corporation (NPC) and the other power generators in the country operate some 56 oil-based power plants.  If the state-run NPC and the other power generators can be “persuaded” to blend, if not gradually replace, their bunker oil requirement with an increasing percentage of CME, we would acquire a tremendous local market for CME.

In still another power sector market, the NPC’s Small Power Utilities Group (NPC-SPUG) operates an assortment of 96 oil-based power barges and small power plants in many parts of the country that are not connected to the main transmission grid.  Again, a mere 1% of the annual fuel consumption of the NPC-SPUG would amount to an additional requirement for millions of liters of CME.

Finally, R.A. 9637 (The Philippine Biofuels Act of 2006), authored by Sen. Juan Miguel Zubiri and signed into law on January 12, 2007, provides for the mandatory blending of a minimum of 1% biodiesel by volume into all diesel engine fuels sold in the country within 2 years from the effectivity of the law, and 2% thereafter.  A diligent DOE enforcement and monitoring of compliance with the law by both oil companies and petrodiesel retailers in the country would further boost the motor vehicle market for CME.

While we should not neglect and must in fact develop the export market for CME, only a developed and dynamic local market can ensure sustained development and growth of CME production in the country.   

Challenges (and chances).  Small to medium scale CME plants in coconut producing provinces is possible by empowering small coconut farmers and PUV drivers to own such plants through business entities or cooperatives.  The “direct” benefits of such ventures are obvious: better copra price for the coconut farmers, cheaper and cleaner fuel for the PUV drivers, and additional income for both from the business proceeds.  The challenge is how to “induce” NGOs (Non Government Organizations) and LGUs (Local Government Units) to jointly act as “facilitator” and “enabler” of such ventures.

For its part, the national government should take the lead in promoting CME by directing all agencies of government, particularly the NPC and NPC-SPUG, to maximize utilization of CME in their fuel consumption.  At the same time, a “focal” policy and program office should be constituted within the DOE and tasked to promote, develop, sustain and regulate the production and supply of CME in the country.

The Joint Congressional Oversight Committee on Biofuels, chaired by Sen. Sergio Osmeña III, should also exercise its inherent and implied powers to review, monitor and supervise the enforcement of R.A. 9637 by the DOE. 

For CME producers, the challenge is to develop efficient methods of production that are capable of delivering volume quality and affordable prices.

These are some of the challenges that can lead to a vibrant CME market and a revitalized coconut industry, economic activities and poverty reduction in rural areas, and improved quality of air.

 
Published 25 June 2011
Pasig City, PHILIPPINES
                                                                                               

CME-related images

  A small coconut farm in the Philippines

Coconut harvest

Manual dehusking of coconuts

Copra sun drying

Small coconut oil expeller

25-tonner coconut oil expeller

Small biodiesel plant

Small to medium size biodiesel plant

Big biodiesel plant