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Department Circular No. 2006-11-0012

IMPLEMENTING THE PHILIPPINE NATIONAL STANDARD SPECIFICATION FOR ANHYDROUS BIOETHANOL FUEL

(PNS/DOE QS 007:2005)

WHEREAS, Republic Act (R.A.) No. 7638, otherwise known as “An Act Creating the Department of Energy (DOE)”, tasks the DOE to formulate rules and regulations as may be necessary to guide the operations of both government and private entities involved in energy resource supply and distribution;

WHEREAS, R.A. 7638 further mandates the DOE to develop and update the existing Philippine Energy Program, which shall provide for an integrated and comprehensive exploration, development, utilization, and conservation of energy resources, with preferential bias for environment-friendly, indigenous, and low-cost sources of energy;

WHEREAS, bioethanol is an energy resource that is environment-friendly, renewable and can be produced locally such that if blended with petroleum products, would support the Government’s five-point energy independence program as well as the DOE’s thrust towards the development of indigenous and renewable energy resources, and increasing the use of alternative fuels for the transport sector;

WHEREAS, in 2005, the DOE adopted the Fuel Bioethanol Program to promote the use of bioethanol as a blending component to gasoline under certain terms and conditions particularly in view of the fact that the program implementation is not yet mandatory and as there is no currently no locally-sourced or produced bioethanol;

WHEREAS, the DOE has issued Department Circular No. 2006-08-0011 entitled “Interim Guidelines for the Accreditation of Oil Industry Participants in the Fuel Bioethanol Program”, providing for the accreditation guidelines for Oil Industry Participants for the effective monitoring and implementation of the Fuel Bioethanol Program, ensuring also therein quality conformance of both imported and locally manufactured bioethanol to the Philippine National Standard (PNS);

WHEREAS, R.A. No. 8749, otherwise known as the “Philippine Clean Air Act of 1999”, provides that the DOE together with the Department of Environment and Natural Resources (DENR), the Bureau of Product Standards (BPS), and the Department of Science and Technology (DOST) and other stakeholders shall set specifications for all types of fuel and biofuel products and improve fuel composition;

WHEREAS, pursuant to the Fuel Bioethanol Program of the government, partnership was established with the ethanol manufacturers and other stakeholders for the development of product quality standard specification for Anhydrous Bioethanol, designated as PNS/DOE QS 007/2005 for blending with gasoline for use as automotive spark ignition engine fuel;

WHEREAS, PNS/DOE QS 007/2005 was promulgated by the BPS on April 18, 2006, which in effect requires the issuance of a corresponding circular to implement the same;

WHEREAS, there are pending legislation expected to be passed soon by Congress that aim to promote and/or mandate the use of bioethanol in the transport sector with quality specification conforming to the PNS;

NOW, THEREFORE, the following guidelines are hereby adopted to effectively implement the PNS specifications for anhydrous bioethanol fuel:

(1)      Upon the effectivity of this Department Circular, only bioethanol conforming to PNS/DOE QS 007/2005 shall qualify for the Fuel Bioethanol Program:  Provided, however, That the PNS color specification of dark violet for fuel bioethanol shall be made mandatory starting January 1, 2007;

(2)      All Oil Industry Participants engaged in the importation of bioethanol and/or denaturing of the same shall be required to submit to the DOE a Certificate of Quality of the imported or locally produced bioethanol, showing conformance to all the properties listed in PNS/DOE QS 007/2005.  Further, all Oil Industry Participants shall ensure that their imported and/or locally-purchased bioethanol contains the desired and appropriate corrosion inhibitor additive for bioethanol.

(3)      The DOE shall verify compliance of the products to PNS/DOE QS 007/2005 through regular testing or spot testing.

(4)      Starting January 1, 2007, all Oil Industry Participants engaging in retailing bioethanol-blended gasoline or E-gasoline in gasoline stations shall be required to label all E-Gasoline pumps with “This gasoline contains 10% Bioethanol” and “Generally recommended for fuel injection engines” following the prescribed specifications in Annex A;

(5)      Failure to comply with the provisions of this Department Circular shall subject the violator to the corresponding sanctions imposed under appropriate laws, including DOE rules and regulations.

(6)      If, for any reason, any provision of this Department Circular is declared unconstitutional or invalid, the other parts or provisions thereof which are not affected thereby shall continue to be in full force and effect.

This Department Circular shall take effect immediately following its publication in any newspaper of general circulation and shall remain in effect unless otherwise revoked or amended.

Fort Bonifacio, Taguig City, Metro Manila, 9 November 2006.

RAPHAEL P.M. LOTILLA

Secretary