Development of Bio-Diesel Industry in the Philippines

1. Development of Bio-Diesel Industry in the Philippines Richard Torres, D1 OilsADB Headquarters, Manila, 25 May 2006

2. Topics • Current Situation • Feed Stock • Nursery/Plantation –Crushing/Oil/Expulsion/Refinery • Social Economic Effect • Technology

3. Current Situation • Consumption of energy is increasing: • Power Generation • Industrial Use • Marine • Vehicle • Diesel Demand projected to increase from 41 MMBFOE 2004 to 59 MMBFOE 2014 (30% Increase) (Source: PEP 2005)

5. Current Situation; cont. • Approximately 46% of Energy being imported • Economic Dependency of Energy Source • Growing effect of Greenhouse Gases on the environment • Fuel prices steadily increasing causing public concern • Should we continue our course or identify and pursue alternatives through a Nation Wide Road Map to assure the continuous growth of this industry.

6. Current Situation; cont. • Determine the economic feasibility of the Feedstock • Growing demand for planting materials • Awareness and interest in jatropha growing. • Need to create the agriculture infrastructure to create a sustainable source of feedstock • Training on Planting Methodology • Nursery (Propagation) • Selection • Seeds • Cuttings • Tissue Culture • Ect. • Plantations • Buying and Processing Centers

7. Current Situation; cont. • Chemrez, recently inaugurated CME plant biodiesel plant in country. • New investment ventures being heard of creating operations to produce Bio Diesel in the Philippines. • D1 Oils currently providing propagation material to plant 22,500 hectares or the equivalent of 75,000 tons of CJO for 2007-8

8. Bio Diesel Feed Stock • Jatropha • Karanja • Palm • Coconut • Rape Seed • Sunflower • Soya

9. Bio Diesel Feed Stock • Jatropha • Karanja • Palm • Coconut • Rape Seed • Sunflower • Soya

10. Bio Diesel Feed Stock • Jatropha Oil

11. Bio Diesel Feed Stock • Karanja Oil

12. Bio Diesel Feed Stock • Palm Oil

13. Bio Diesel Feed Stock • CoconutOil

14. Bio Diesel Feed Stock • Rapeseed Oil

15. Bio Diesel Feed Stock • Sunflower Oil

16. Bio Diesel Feed Stock • Soya Oil

17. Why Jatropha • Does not compete with price or demand of the food market • Thrives on most soils in the Philippines • Needs minimum maintenance • Can withstand drought • Very few pests • Not edible by animals • Easy Propagation with rapid growth • Harvesting beginning 2nd year • Average 30% Oil yield from seed crushing • Excellent opportunities of income from by products • Most Cost Effect Seed Stock

18. Pres GMA recently directed government agencies to establish mechanism and funding for development of JME as biodiesel alternative. DOE establishing standards for JME and tapping D1 Oils as main source of data.

19. Table 3. Area, production and value of production of five important crops, in 2003 Rice and corn occupy 41 and 24 percent, respectively, of the total agricultural area. Of the 4 million hectares grown

20. Table 1. Land utilization in the Philippines Administrative boundaries

21. PROJECT IMPLEMENTATION 12 to 24 months 2 15 , 000 Hectares Development e s Period a h P 6 to 12 months 1 5 , 000 Hectares e Development s a Period h P s 0 to 6 months u 10 Ha . e Development l c NUCLEUS u Period N

22. Large Scale Plantation Development 10 ha 1,000 - hectare plantation 5,000 ha 5,000 - hectare plantation 15,000 ha monocrop intercrop

24. FULL IMPLEMENTATION

25. Current Nucleus Farms/Projected production

26. Social Economic Effect • Lower fuel prices • Cheaper cooking heating oil • Lighting oil • New crop source of income from Marginal and Idle land • Additional Source of income to farmers of traditional crop • Provide a source of income to ex combatants • Provide jobs to womens groups (Nursery, Soap Production) • Create new business oportunities (bi-products)

27. MULANAY QUEZON

28. Production Cost Items Processing Refining Nursery Plantation • seeds • irrigation • labor & overhead • fertilizer • land lease • training • seedlings • irrigation • labor & overhead • fertilizer • land preparation • transport • weeding/pruning • training • harvesting • expelling • building • labor & overhead • plant maintenance • transport • storage • D1 20 • building • overhead • plant maintenance • transport • storage EN 14214: per ton Seedling: per piece Seeds: per ton CJO: per ton

29. EARTH-TO-ENGINE SUPPLY CHAIN Philipiines Biodiesel Pool Feedstock supply Jatropha Biodiesel for Local and Remote areas Biodiesel Production Blending Coconut Biodiesel refining Petroleum refining Consumer & Industrial Markets Palm

30. “Meeting Growing Global Demand for Biodiesel” D1's objective is to become a global, sustainable producer of competitively priced biodiesel. We aim to meet the world's growing demand for more green transport fuel. We intend to deliver a consistent high volume output of sustainable vegetable feedstock oils and high quality biodiesel. We are building a global portfolio of planting and refining operations and we believe production in volume for the long term is the most profitable way to maintain our lead over competitors. D1 is commercially driven with a business model that addresses the pressing global issues of fuel supply security, climate change and sustainable development.” With an Immediate Goal of planting 6,000 hectares for 2006 for the Philippines