Biodiesel to perk up demand for coconut in 2026

The United Coconut Association of the Philippines said it is confident that local coconut production will recover next year and boost the supply of coconut oil for biodiesel.

UCAP Vice Chair Dean Lao Jr. said the expected rebound in output next year would create an ideal environment to raise the biodiesel blend to 4 percent (B4).

“The government should increase the blend to B4 once our supply normalizes,” Lao confidently said on the sidelines of the World Coconut Congress in Pasay City.

“We expect that to happen next year because of beneficial rains this year, and also because the trees have rested. They should come back with higher productivity next year,” he was as saying UCAP said its outlook stemmed from the “cycle” of coconut productivity, now in its recovery period after getting struck by weather-related shocks like El Niño that led to a supply crunch and pushed up prices of the tropical oil to a record high.

Coconut oil quotations have recently skyrocketed to a historic $2,771 per metric ton (MT) in the international market, based on World Bank data.

For UCAP chair Marco Reyes, the mandated biodiesel blend could corner local demand and reduce the domestic industry’s dependence on the export market for coconut oil whose prices remain at the mercy of the global market.

“We do not have control [over prices] because we are hostaged by international prices. We’re the number one exporter yet it goes against us because we are dependent on them. We don’t have a local captive demand for our coconut,” Reyes said.

“The 3 percent blend […] is something which we have to be happy about because now we are able to lessen our dependence on the export market.”

With the price of coconut oil in a downtrend, Reyes said the demand for coconut oil from the biodiesel industry could present an upside risk.

“Now, the price is going down again, and that’s where this benefit of having a local captive demand for biodiesel comes in,” he said.

“Our farmers are complaining about the decline in prices, but because we have a local demand [for biodiesel], then it can go there. So, we’re happy with the 3 percent blend, and later on 4 percent and 5 percent.”

Philippine Coconut Authority (PCA) Administrator Dexter Buted earlier said the government will lift the suspension on the implementation of a higher biodiesel blend in 2026 owing to a projected increase in coconut output.

This, after the Department of Energy (DOE) issued an advisory last July that suspended the hike in coconut methyl ester (CME) blend to B4 and B5, scheduled for October 1, 2025, and October 1, 2026, respectively.

The National Biofuels Board (NBB) had recommended to postpone the mandated increase in biodiesel blend due to the surge in copra quotations, which could put pressure on pump prices. PCA is a member of the NBB.

Under the Biofuels Act of 2006 or Republic Act 9367, all liquid fuels for motors and engines sold in the country should be blended with biofuels.