San Carlos Bioenergy Inc. (SCBI) inaugurated its P3-billion sugar-cane-based ethanol and co-generation plant, the first Southeast Asia, at the San Carlos Ecozone, in Barangay Palampas and Punao. The Philippine Economic Zone Authority [PEZA] had approved the conversion of this 400- hectare area as an economic zone. This will help wean the Philippines away from dependence on fossil fuels.

Indian Ambassador Hon. Rajeet Mitter was invited to the opening recently, which was held on September 4th this year.

The India-based ISGEC John Thompson supplied the boilers for San Carlos Bioenergy. They send in more than 20 technicians to install and operate the plant. It is a new feather in the cap between India and the Philippines. ISGEC has also been tapped as machine supplier for the upcoming power plant.

The City of San Carlos has now started to shift to agro-industry as the lifeblood of its economy, replacing agriculture. This economic thrust came following plans to develop a 400-hectare San Carlos Economic Zone and in the future possible a sea port and an airport. The initial investment is about P150 million to P 300 million in the port project. San Carlos City faces a bright future as the demand for ethanol is expected to grow.
“This is a major milestone in the government’s effort to reduce dependency on imported sources of energy, and to have energy security coupled with social equity and environmental sustainability,” said Energy Secretary Angelo Reyes, who led government officials at the inauguration ceremonies Friday. “We should have 20 more replications of this plant all over the Philippines,” he said.

SCBI chair Jose Maria Zabaleta said the firm’s facility will use only 120 hectares of the Ecozone. Zabaleta said five companies, all in the energy business, have expressed interest in setting up operation in San Carlos Ecozone.

Zabaleta also spoke of his future plans to develop an industrial port at the old port of the defunct San Carlos Milling Co. The Philippine Port authority use to operate a port in San Carlos City. The proposed industrial port would be used to ship out liquid cargo like ethanol, fuel and lubricants. A consortium composed of SCBI, San Julio Realty Corp. and other domestic and foreign investors would finance the port project, Zabaleta added.

San Carlos Mayor Eugenio Jose Lacson also said an airport for cargo is about 10 percent complete.
The airport is being built on a 15-hectare property with some donation by the Ledesma family. The project will take time and will move slowly since it is locally funded and dependent on the city’s internal revenue allotment.

Marriz Agbon, Philippine Agricultural Development and Commercial Corp. president, said the SCBI has shown the ways in the development and promotion of green energy technologies. This March, SCBI delivered its shipment of 1.6 million liters of ethanol to Petron, in compliance with Republic Act No.9367, which promotes the use of biofuel.

In another development Bronzeoak Philippines, was established in 2003 by British firm Bronzeoak Ltd. and the Zabaleta group is investing P1.5 billion to construct a second ethanol production facility starting June next year. Three areas have been identified but not yet revealed. According to Zabaleta, Bronzeoak would again be the developer of the proposed facility and was considering partners for the project.

SCBI, being the country’s first integrated fuel ethanol distillery and power cogeneration facility, has a capacity of 30 million liters a year. There are only two companies that produce ethanol locally, the other being Leyte Agri Corp. At its current capacity, SCBI said it expected to displace 15% of the country’s imported petroleum, based on a 5-percent blending mandate to be implemented from 2009 to 2011.

The second proposed facility, according to Zabaleta, would have an estimated rated capacity of 40 million liters annually and would include putting up a cogeneration power plant that would produce around 8 megawatts of electricity. Investors could also tap financing from private bank or the state-owned Development Bank of the Philippines, which has a credit line available to everyone.

The government is inviting investments in the bioethanol sector since local production has fallen short of the demand. There is a huge demand of 208 million liters yearly, and the two existing facilities produce ethanol commercially at a combined 39 million liters annually. The present Biofuel Law rules that all oil companies are mandated to preblend 5 percent ethanol in gasoline –fueled vehicles starting February 2009 and increase this to 10 percent by 2011. The compliance of the oil companies which began preblending 10-percent ethanol in their gasoline products as early as 2008, are way ahead of what the law required.

Ethanol, or ethyl alcohol, the same type of alcohol found in alcoholic beverages, can be used as a fuel. Because it is easy to manufacture and process and can be made from common crops such as sugar cane, potato, manioc and corn, it is being seen as a bio fuel alternative to gasoline. Unlike petroleum, bio ethanol is a renewable resource. Philippines are already No. 2 in the world in geothermal energy. As for solar energy, Philippines are located near the equator and have no winter. This country has plenty of wind channels to produce wind energy, and could tap ocean energy because it has a coastline that’s longer than that of the United States, and has the potential to become the Saudi Arabia of the Philippines.
SBCI plant is the first to obtain the approval for carbon credit offsets under the Clean Development Mechanism (CDM) of the Kyoto Protocol. The Kyoto Protocol, an international agreement between more than 170 countries, has instituted a tradable permit scheme to provide a way to reduce greenhouse gas emissions by giving them monetary value. Participating governments and private companies earn carbon credits, or units of carbon emission, which can be traded on the marketplace.
President Gloria M Arroyo hoped that more bio ethanol plants would be put up in Negros’ sugar mills to feed the requirements not only of motor vehicles, industrial equipment and electrical appliances but of the country’s main power grids. The project has created up to 500 industrial jobs in the local community and supports 8,000 year-round jobs for farmers and plantation owners and farmers now get better prices for their produce San Carlos City is now considered a “planter’s market,” with sugarcane prices rising to more than P1, 700 per 50 ton cane from less than P1, 500 per ton cane in the previous year, it added.
Bronzeoak Clean Energy provides equity and investment for building clean, sustainable, biomass-based energy projects in the Philippines and the Asia-Pacific region. Aside from bagasse, the power plant will also use other agricultural residues such as cane leaves, coconut residues, tree trimmings and purpose-grown commercial plantations of short rotation wood crops.

The India-based ISGEC John Thompson, which supplied the boilers for San Carlos Bioenergy, comprises the heavy engineering divisions of the Saraswati Industrial Syndicate Ltd., which is a public company, and which has a history of 75 years, having customers in 75 countries and across 6 continents.

The Group has its origins in the Saraswati Sugar Mills, which was established in 1933, with a sugarcane crushing capacity of 400 Tonnes per day. It has grown into one of India's largest sugar mill and now crushes 13,000 Tonnes per day. It is today a subsidiary company. At the time of the nation's independence, the need for an Indian Capital Goods Industry was recognized and Isgec was established in 1946. The initial activity was the manufacture of spares for sugar mills.

In the course of its history, the Company diversified into a range of engineering products. In 1964 it established a joint venture with John Thompson of the UK to form ISGEC JOHN THOMPSON.
In 1981, it acquired majority shares in UP STEELS. Both units were subsequently absorbed into the parent company. Today, the Company has six major business units.

CONGRATULATIONS. A VICTORY FOR THE PHILIPPINES.