RA 9367 — Biofuels Act of 2006
Republic Act No. 9367, the Biofuels Act of 2006, mandates the blending of domestically-sourced biofuels into all liquid motor fuels sold in the Philippines. Enacted by the Thirteenth Congress and approved January 12, 2007, it establishes minimum blending schedules, creates the National Biofuels Board (NBB) as the governing body, and provides fiscal incentives for domestic production. Ingest status: Complete — all sections ingested (§1–21).
Chapter I — General Provisions (§1–3)
Section 2 — Declaration of Policy
| Point | Policy |
|---|---|
| (a) | Develop and utilize indigenous renewable and sustainable-sources to reduce dependence on imported oil |
| (b) | Mitigate toxic and greenhouse gas emissions |
| (c) | Increase rural employment and income |
| (d) | Ensure biofuel availability without detriment to natural ecosystems, biodiversity, and food reserves |
[RA 9367, Section 2, 2007]
Section 3 — Key Definitions
| Term | Definition |
|---|---|
| Biodiesel | Fatty Acid Methyl Ester (FAME) or mono-alkyl ester from vegetable oil, animal fats, or other biomass-derived oils; quality per PNS |
| Bioethanol fuel | Hydrous and anhydrous bioethanol suitably denatured for motor use; quality per PNS |
| Biofuel | Bioethanol, biodiesel, and other fuels from biomass primarily for motive/thermal/power generation; quality per PNS |
| Biomass | Organic matter (trees, crops, residues, plant fiber, poultry litter, animal waste, industrial waste, biodegradable solid waste) available on renewable or recurring basis |
| Feedstock | Organic sources (molasses, sugarcane, cassava, coconut, jatropha, sweet sorghum, other biomass) used in biofuel production |
| Motor fuel | All volatile and inflammable liquids and gas produced, blended, or compounded for operating motor vehicles |
| NBB / Board | National Biofuel Board created under §8 |
| Oil company | Any entity that distributes and sells petroleum fuel products |
| MTBE | Methyl Tertiary Butyl Ether — a harmful gasoline additive subject to phase-out |
| PNS | Philippine National Standard (consistent with RA 8749 Clean Air Act §26) |
[RA 9367, Section 3, 2007]
Chapter II — Mandatory Use and Incentives (§4–6)
Section 4 — Phase-Out of Harmful Additives
Within six months of effectivity, DOE shall gradually phase out MTBE and other harmful gasoline additives per internationally accepted standards [RA 9367, Section 4, 2007].
Section 5 — Mandatory Blending Schedule
All liquid motor fuels sold in the Philippines must contain domestically-sourced biofuel components [RA 9367, Section 5, 2007]:
| Fuel | Phase 1 (Timeline from Effectivity) | Phase 2 (NBB Recommendation) |
|---|---|---|
| Biodiesel | B1 (1% minimum) within 3 months | NBB may recommend B2 (2%) after evaluating feasibility within 2 years; can be increased further |
| Bioethanol | E5 (5% minimum) within 2 years | NBB may recommend E10 (10%) after evaluating feasibility within 4 years |
Permanent floor (§9(c)): The B2 and E5 minimums may not be decreased after the first four years from effectivity. NBB may reduce blends below these floors only within the first four years.
Import relief: During bioethanol supply shortages, oil companies may import bioethanol — but only to the extent of the shortfall as determined by the NBB.
Bioethanol blend: Must contain a minimum of 5% bioethanol by volume and must conform to PNS.
Section 6 — Incentive Scheme
| Incentive | Detail |
|---|---|
| (a) Zero specific tax | Local or imported biofuels component: zero specific tax per liter; gasoline and diesel components remain taxed at prevailing rates |
| (b) VAT exemption | Sale of raw materials for biofuel production (coconut, jatropha, sugarcane, cassava, corn, sweet sorghum) exempt from VAT |
| (c) Water effluents | Distillery slops used as liquid fertilizer = “reuse” under RA 9275 (Clean Water Act §13) — exempt from wastewater charges; subject to DENR/DA guidelines |
| (d) Financial assistance | GFIs (DBP, LBP, Quedancor, others) must give high priority to financing 60%-Filipino-owned biofuel entities engaged in feedstock production, storage, handling, transport, and blending; as certified by DOE |
[RA 9367, Section 6, 2007]
Chapter III — Governance (§7–11)
Section 7 — DOE Functions
Within three months of effectivity, DOE shall [RA 9367, Section 7, 2007]:
| Function | Detail |
|---|---|
| (a) | Formulate the IRR (§15) |
| (b) | Prepare the National Biofuel Program (NBP) consistent with the PEP; building on DOE’s existing biofuels program |
| (c) | Establish technical fuel quality standards for biofuels and biofuel-blended gasoline/diesel per PNS |
| (d) | Establish transport, storage, and handling guidelines for biofuels |
| (e) | Impose fines and penalties for violations of §12(b)–(e) |
| (f) | Stop sale of biofuels and biofuel-blended fuels not conforming to §5, PNS, or DOE issuances |
| (g) | Conduct information campaigns to promote biofuel use |
Section 8 — National Biofuel Board (NBB)
The NBB is created under this section. Composition [RA 9367, Section 8, 2007]:
| Member | Role |
|---|---|
| DOE Secretary | Chairperson |
| DTI Secretary | Member |
| DOST Secretary | Member |
| DA Secretary | Member |
| DOF Secretary | Member |
| DOLE Secretary | Member |
| PCA Administrator | Member |
| SRA Administrator | Member |
Total: 8 members. Note: DOT/DOTC is defined in §3 but is not an NBB member.
Technical Secretariat: Attached to the Office of the DOE Secretary; headed by a Director appointed by the Board; staffing levels approved by DBM subject to civil service rules. The DOE Secretary shall convene the NBB within one month of effectivity.
Section 9 — NBB Powers and Functions
| Power | Detail |
|---|---|
| (a) | Monitor implementation and evaluate expansion of the NBP |
| (b) | Monitor supply/utilization; recommend measures during feedstock shortages; require industry supply/inventory reporting |
| (c) | Review and recommend blend adjustments to DOE — minimum may only be decreased within the first 4 years; after year 4, B2 and E5 are permanent statutory floors |
| (d) | Recommend alternative fuel technology programs for vehicles, engines, and parts consistent with mandated blends |
| (e) | Recommend biofuel use in air transport, subject to safety and technical viability |
| (f) | Recommend specific actions for DOE and other agencies on NBP implementation, including economic, technical, environmental, and social impact |
[RA 9367, Section 9, 2007]
Section 10 — Food Security Gate (SRA)
The SRA, pursuant to its mandate, must at all times ensure that domestic sugar supply is sufficient to meet demand and that sugar prices are stable. To this end, the SRA may recommend and agencies shall undertake sugar importation, and shall adjust minimum access volume (MAV) parameters under the Tariff and Customs Code as necessary.
Effect: domestic food security legally overrides bioethanol feedstock demand. The Biofuels Act’s blending mandate does not compel sugarcane diversion from food use. [RA 9367, Section 10, 2007]
Section 11 — Agency Roles
| Agency | Role |
|---|---|
| DOF (BIR + BOC) | Monitor biofuel production and importation |
| DOST + DA | Coordinate on identifying and developing viable feedstocks |
| DOST (PCIERD) | Develop and implement R&D program for biofuel production/utilization technology; publish and promote related technologies |
| DA (SRA, PCA, attached agencies) | Within 3 months: develop national feedstock production program; ensure sustainable feedstock supply; publish available and suitable cultivation areas |
| DOLE | Promote livelihood opportunities and employment; ensure workers’ access to productive resources and social coverage; recommend plans/policies for NBP social impact |
| Tariff Commission | Create and classify a tariff line for biofuels and biofuel-blends consistent with WTO and AFTA agreements |
| LGUs | Assist DOE in monitoring distribution, sale, and use of biofuels and biofuel-blends |
[RA 9367, Section 11, 2007]
Chapter IV — Enforcement (§12–14)
Section 12 — Prohibited Acts
| Act | Prohibition |
|---|---|
| (a) | Diversion of biofuels (local or imported) to purposes other than those in this Act |
| (b) | Sale of biofuel-blended gasoline or diesel failing to comply with minimum blend volumes (§5) |
| (c) | Distribution, sale, or use of automotive fuel containing MTBE or other harmful additives beyond NBB-set concentration limits |
| (d) | Noncompliance with PNS and DOE guidelines issued under this Act |
| (e) | False labeling of gasoline, diesel, biofuels, or biofuel-blended fuels |
[RA 9367, Section 12, 2007]
Section 13 — Penalties
- Criminal: 1–5 years imprisonment + PhP 1,000,000–5,000,000 fine per violation; aiders/abettors liable as principals; corporate officers (partner, president, COO, CEO, directors) personally liable
- Confiscation: DOE shall confiscate non-compliant products (§§4–5 violations); DOE determines disposal and utilization
- Administrative: DOE may stop and suspend operations of businesses that refuse to comply with DOE Secretary orders
- Additional: DOE may impose administrative fines and penalties for any violation of the Act, IRR, or related issuances
[RA 9367, Section 13, 2007]
Chapter V — Final Provisions (§14–21)
| Section | Provision |
|---|---|
| §14 | Appropriations from DOE current appropriations; thereafter in annual GAA |
| §15 | IRR within 3 months — DOE consults NBB and stakeholders; draft posted on DOE website for ≥1 month + published in ≥2 newspapers before effectivity |
| §16 | Biofuels Oversight Committee — 14 members; Chairs of Senate and House Energy Committees as co-chairs; Agriculture and Trade and Industry committee chairs as ex officio; 4 from each house designated by Senate President and Speaker; minority pro-rata representation — separate from JCEC |
| §17 | Worker protection — RA 6982 (Sugar Amelioration Act of 1991) rights preserved for sugar workers used as bioethanol feedstock; NBB to establish similar mechanism for other biofuel workers |
| §18 | CDM clause — Act shall not be interpreted as prejudicial to Clean Development Mechanism (CDM) projects reducing CO₂/GHG emissions through biofuel use |
| §19 | Repealing clause — §148(d) of RA 8424 (Tax Reform Act of 1997) repealed; all inconsistent laws, decrees, and issuances repealed/amended |
| §20 | Separability clause |
| §21 | Effectivity 15 days after publication in at least two newspapers of general circulation |
2022 Compliance Data
As of 2022 [PEP 2023-2050 Vol. I, p.56, 2023]:
- Biodiesel producers: 12 facilities with combined capacity of 677.9 million liters/year (MLPY); 4 additional accredited for construction
- Bioethanol facilities: 13 facilities with 466.0 MLPY; 2 additional accredited for construction
- Bioethanol consumption: 154.7 kTOE in 2022 (+22.9%), including imports to meet demand
GHG Impact
Biofuel blending contributed 2,366 ktCO₂e of GHG avoidance in 2022 (1.54% of hypothetical emissions) — the third-largest mitigation measure after fossil fuel efficiency improvements and electricity efficiency gains [PEP 2023-2050 Vol. I, Table 6, 2023]. See GHG Emissions — Energy Sector (2022 Baseline) .
Full text: Cleaned copy