PCA warns suspension of biodiesel mandate threatens coconut farmers, industry gains

MANILA, Philippines — The Philippine Coconut Authority (PCA) is pushing back against a proposal backed by President Ferdinand Marcos Jr. to suspend the mandatory biodiesel blend, warning that the move would jeopardize the livelihoods of farmers and derail long-term industrial investments.

The agency’s opposition comes as a bill authorizing a temporary halt to the required use of locally sourced biofuel blending advances in Congress. President Marcos certified the measure as urgent, and the House of Representatives has since approved it. The legislation now awaits action in the Senate.

“The PCA maintains that it is not amenable to the full suspension of the biodiesel blend mandate,” the agency said in a statement.

The proposed law would allow the suspension of the biodiesel requirement for up to one year. The current mandate, established under the Biofuels Act of 2006, requires all diesel fuel sold in the country to contain a percentage of biodiesel—largely derived from coconut oil—in a program designed to reduce reliance on imported fossil fuels, support the agricultural sector, and lower vehicle emissions.

Officials have cited high global vegetable oil prices and their impact on diesel costs as justification for the proposed suspension, arguing that a temporary halt could ease pressure on consumers.

However, the PCA warned that even a one-year suspension would have lasting consequences. The agency said it would undermine the coconut industry’s stability by reducing demand for coconut methyl ester (CME), the primary feedstock for the country’s biodiesel. A drop in demand, it noted, could depress farm-gate prices for copra—dried coconut kernels—which remain the main source of income for millions of smallholder farmers.

“The disruption will not only affect the income of coconut farmers but also dampen investor confidence in the industry,” the PCA said. The agency pointed to recent investments in biofuel production facilities and coconut processing infrastructure that were predicated on the continuation of the mandate.

The Philippines is the world’s second-largest coconut producer, and the industry supports approximately 2.5 million farmers, many of whom work on smallholdings. The biodiesel mandate has been a key pillar of government efforts to create a stable, domestic market for coconut oil, insulating the sector from volatile global commodity prices.

Senators remain divided on the measure. Proponents argue that temporary relief is necessary to address fuel costs, while opponents—including several agriculture-sector lawmakers—have sided with the PCA, warning that suspending the mandate would be a “step backward” for energy independence and rural development.

The PCA has called for dialogue with lawmakers and the Office of the President to explore alternatives, such as targeted subsidies or adjustments to the blend percentage, rather than a full suspension.

“We urge policymakers to consider the long-term implications on the coconut sector,” the PCA said. “Any policy that disrupts the biodiesel program must be carefully weighed against the welfare of our farmers and the stability of the industry.”