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7/29/2019 research on biomass

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Begun and held in Metro Manila, on Monday, the twenty-fourthday of July, t w o thousand six.[ REPUBLIC ACT No. 9 3 6 7 ]AN- _ - - ACT T O- - DTRECT THE -~ USE OF BIOFUELS. ~

ESTABLISHING FOR THIS PURPOSE T H EBIOFUEL P R O G W , APPROPRIATING FUNDS

THEREFOR, AND FOR OTHER PURPOSESBe it enacted by the Senate and House of Representatives ofthe Philippines in Congress assembled:SECTION 1. Short Title. - This Act shall be known asthe "Biofuels Act of 2006.SEC. 2. Declaration of Polky. - It is hereby declaredthe policy of the St a t e to reduce dependence on importedfuels with due regard to the protection of public health, theenvironment, and na tur a l ecosystems consistent with the countryssustainable economic growth tha t would expand

opportunities for livelihood by mandating the use of biofuels.a s a measure to:a) develop a n d u t i l i z e indigenous r enewabl e a n dsustainably-sourced clean energy sources to reduce dependenceon imported oil;b) mitigate toxic and greenhouse gas (GHG) emissions;c) increase rur a l employment and income; andd) ensure the availability of alternative a n d renewableclean energy without any detriment to the natural ecosystem,biodiversity and food reserves of the country.SEC. 3. Definition of Terms. - As used in this Act, thefollowing terms shall be taken to mean a s follows:a) AFTA - s h a l l r e f e r to the ASEAN Fr e e T r a d eAgreement initiated by t h e Association of Southeast AsianNations;b) Alternative Fuel Vehiclesmngines - shall refer tovehicles/engines tha t use alternative fuels such as biodiesel,bioethanol, natural gas, electricity, hydrogen a n d automotiveLPG, instead of gasoline and diesel;from feedstock and other biomass;c) Bioethanol - shall refer to ethanol (C&Ow) producedd) Biodiesel - shall refer to Fatty Acid Methyl Ester(FAME) or mono-alkyl esters derived from vegetable oils oranimal fats a n d other biomass-derived oils t h a t sha l l betechnically proven and approved by the DOE for use in dieselengines, with quality specifications in accordance with thePhilippine National Standards (PNS); 3e) Bioethmol Fuel - shall refer to hydrous or anhydrousbioethanol suitably denatured for use a s motor fuel, withquality specifications in accordance with the PNS;f) Biofuel - shall refer to bioethanol and biodiesel a n dother fuels made from biomass a n d primarily used formotive, t h e r m a l a n d power g e n e r a t i o n , with q u a l i t yspecifications in accordance with the PNS;g) Biomass - s h a l l r e f e r to a n y organic m a t t e r ,particularly cellulosic or ligno-cellulosic matter, which isavailable on a renewable or recurring basis, including trees,crops and associated residues, plant fiber, poultry litter a n dother animal wastes, industrial wastes, and the biodegradablecomponent of solid waste;h) DA - shall refer to the Department of Agriculturecreated under Executive Order No. 116, a s amended;i) Diesel - shall refer to refined petroleum distillate,


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which m a y cont a in s m a l l a m o u n t s of hydrocarbon o rnonhydrocarbon additives to improve ignition quality or othercharacteristics, suitable for compression ignition engine andother suitable types of engines with quality specifications inaccordance with the PNS;

j) DENR - shall refer to the Department of Environment

and Natural Resources created under Executive Order No. 192,a s amended;k) DOE- shall refer to the Department of Energy createdunder Republic Act No. 7638, a s amended;1) DOLE - shall refer t o the Department of Labor andEmployment created under Executive Order No. 126, a samended; 4m) DOF - shall refer to the Department of Financecreated under Administrative Order Nos. 127 and 127.A;n) DOST- shall refer to the Department of Science and

Technology created under Republic Act No. 2067;0) DOTC - shall r e f e r to the D e p a r t m e n t of

Transportation and Communications created under ExecutiveOrder No. 126-A, as amendedp) D T I - shall refer to the Department of Trade andIndustry created under Executive Order No. 133;s) Feedstock - shall refer to organic sources such asmolasses, suga r c ane , cassava, coconut, j a t ropha , swe e tsorghum or other biomass used in the production of biofuels;r) Gasohhe - shall refer to volatile mixture of liquidhydrocarbon, generally containing small amounts of additives,s u i t a b l e for u s e as a f u e l in s p a r k - i g n i t i o n i n t e r n a lcombustion engines with quality specifications in accordancewith the PNS;s) Motor fuel- shall refer to all volatile a n d inflammableliquids and gas produced, blended or compounded for thepurpose of, or which are suitable or practicable for, operatingmotor vehicles;t) MTBE - shall refer to Methyl Tertiary Butyl Ether;u) NBB or Board - shall refer to the National BiofuelBoard created under Section 8 of this Act;v) O i l Company - s h a l l refer to a n y ent i ty t h a tdistributes and sells petroleum fuel products;w) Oxygenate - shall refer to substances, which, whenadded to gasoline, increase the amount of oxygen i n thatgasoline blend; 5x) P N S - shall r e f e r to t h e Phi l ippine N a t i o n a lStandards; consistent with Section 26 of R.A. No. 8749,otherwise known a s t h e Philippine Clean Air Act of 1999;y) Renewable Energy Sources - shall refer to energysources that do not have an upper limit on the total quantityto be used. Such resources a r e renewable on a regular basis;andz) WTO - shall refer to the World Trade Organization.S E C . 4. Phasing Out of the Use of Harmful GasolineAdditives and/or Oxygenates. - Within s i x months from t h eeffectivity of this Act, the DOE, according to duly acceptedinternational standards, shall gradually phase out the use ofharmful gasoline additives such as, but not limited to, MTBE.SEC. 5. Mandatory Use oEioiels. - Pur suant to t h eabove policy, it is hereby mandated t h a t all liquid fuels formotors and enginee sold in the Philippines shall containlocally-sourced biofuels components as follows:5 . 1 Within two years from the effectivity of this Act, atleast five percent (5%) bioethanol shall comprise the annua l


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total volume of gasoline fuel actually sold and distributed byeach and every oil company in the country, subject to t h erequirement that all bioethanol blended gasoline shall containa minimum of five percent (5%) bioethanol fuel by volume:Provided That the ethanol blend conforms to PNS.5.2 Within four years from the effectivity of this Act, the

NBB created under this Act is empowered to determine thefeasibility and thereafter recommend to DOE to mandate aminimum of ten percent (10%) blend of bioethanol by volumeinto all gasoline fuel distributed and sold by each a n d everyoil company in the country. 6I n the event of supply shortage of locally-producedbioethanol during the foupyear period, oil companies shall beallowed to import bioethanol but only to the extent of theshortage a s may be determined by the NBB.5.3 Within three months from the effectivity of this Act,a minimum of one percent (1%) biodiesel by volume shall beblended into all diesel engine fuels sold in the country: Provided

Tha t the biodiesel blend conforms to PNS for biodiesel.Within two years from the effectivity of this Act, theNBB created under this Act is empowered to determine thefeasibility a n d thereafter recommend to DOE to mandate aminimum of two percent (2%) blend of biodiesel by volumewhich may be increased taking into account considerationsincluding but not limited to domestic supply a n d availabilityof locally-sourced biodiesel component.SEC. 6. Incentive Scheme. - To encourage investmentsin the production, distribution and use of locally-producedbiofuels a t a n d above the minimum mandated blends, andwithout prejudice to enjoying applicable incentives andbenefits under existing laws, rules a n d regulations, thefollowing additional incentives are hereby provided under thisAct.a) Specific tax

The specific tax on local or imported biofuels component,per liter of volume shall be zero (0). The gasoline and dieselfuel component shall remain subject to the prevailing specifict ax rates.b) Value Added Tax

The sale of raw material used in the production ofbiofuels such as, b u t .not limited to, coconut, j a t ropha ,sugarcane, cassava, corn, and sweet sorghum shall be exemptfrom the value added tax. 7c) Water EffluentsAll water effluents, such a s but not limited to distdleryslops &om the production of biofuels used as liquid fertilizer andfor other agricultural purposes are considered reuse, and aretherefore, exempt from wastewater charges under t h e systemprovided under Section 13 of RA No. 9275, also known as thePhilippine Clean Water Act: Pmvided, however, Tha t suchapplication shall be in accordance with the guidelines issuedpursuant to R.A. No. 9275, subject to the monitoring a n devaluation by DENR and approved by DAd) Financial AssistanceGove rnment f i n a n c i a l i n s t i t u t i o n s , s u c h a s t h eDevelopment Bank of the Philippines, Land Bank oft h e , Philippines, Quedancor and othe r governmentinstitutions providing financial services shall, in accordancewith and to the extent allowed by the enabling provisionsof their respective charters or applicable laws, accord highpriority to extend fjnancing to Filipino citizens or entities,


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a t least sixty percent (60%) of the capital stock ofwhich belongs to citizens of the Philippines that shall engagein activities involving production, storage, handling a n dtransport of biofuel and biofuel feedstock, including t h eblending of biofuels with petroleum, as certiGed by the DOE.SEC. I. Powers and Functions of the DOE - In addition

to its existing powers and functions, the DOE is herebymandated t o t a k e appropriate and necessary actions t oimplement the provisions of this Act. In pursuance thereof,it shall within three months from the effectivity of this Act:a) Formulate the implementing rules and regulationsunder Section 15 of this Act: 8b) Prepare the Philippine Biofuel Program consistent withthe Philippine Energy Plan and taking into consideration theDOES existing biofuels program;c) Establish technical fuel quality standards for biofuelsand biofuel-blended gasoline and diesel which comply with thePNS;

d) Establish guidelines for the transport, storage andhandling of biofuels;e) Impose fines a n d penalties against persons or entitiesfound t o have committed any of the prohibited acts underSection 12 (b) to (e) of this Act:fj Stop the sale of biofuels and biofuel-blended gasolinea n d diesel that are not in conformity with the specificationsprovided for unde r Section 5 of thi s Act, t h e PNS a n dcorresponding issuances of the Department; a n dg) Conduct an information campaign to promote the useof biofuels.SEC. 8. Creation of the National Bidfuel Board (NBB). -

The National Biofuel Board is hereby created. It shall becomposed of the Secretary of the DOE as Chairman and theSecretaries of the DTI, DOST, DA, DOF, DOLE, and theAdministrators of the PCA, and the SRA, a s members.

The DOE Secretary, in his capacity a s Chairperson, shall,within one month from the effectivity of this Act, convene theNBB.

The Board shall be assisted by a Technical Secretariatattached to the Office of the Secretary of the DOE. It shallbe headed by a Director to be appointed by the Board. Thenumbe r of s t a f f of t h e Technical S e c r e t a r i a t a n d t h ecorresponding positions 'shall be determined by t h e Board, subject to approva lby t h e Department of Budget a n dManagement (DBM) a n d existing civil service rules a n dregulations.SEC. 9. Powers and Functions of the NBB. - The NBBshall have the following powers and functions:a ) Monitor t h e implementation of, and evaluate forfur the r expansion, t h e National Biofuel Program (NBP)prepared by the DOE pursuant to Section 7 (b) of this Act;b) Monitor t h e supply and utilization of biofuels andbiofueLblends and recommend appropriate measures in casesof shortage of feedstock supply for approval of the Secretaryof DOE. For this purpose:1. The NBB i s empowered to require all entities engagedin the production, blending and distribution of biofuels tosubmit reports of their actual and projected sales and inventoryof biofuels, in a format to be prescribed for this purpose; and2. The NBB shall determine availability of locally-sourcedbiofuels and recommend t o DOE the appropriate level orpercentage of locally-sourced biofuels to the total annual volume


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of gasoline a n d diesel sold and distributed in the country.c) Review and recommend to DOE the adjustment in theminimum mandated biofuel blends subject to the availabilityof locally-sourced biofuek Provided, That the minimum blendmay be decreased only within the first four years from theeffectivity of this Act. Thereafter, the minimum blends of five

percent (5%) and two percent (2%) for bioethanol and biodiesel,respectively, shall not ,be decreased;d) Recommend to DOE a program tha t will ensure theavailability of alternative fuel technology for vehicles, enginesa n d p a r t s in consonance with the mandated minimumbiofuel-blends, and to maximize the utilization of biofuels,including other biofuels; 10e) Recommend to DOE the use of biofuel-blends in airtransport taking into account safety and technical viability;and0 Recommend specific actions to be executed by the DOEa n d other appropriate government agencies concerning the

implementation of the NBP, including its economic, technical,environment and social impact,SEC. 10. Security of Domestic Sugar Supply - An yprovision of this Act to the contrary notwithstanding, the SFtA,pursuant to its mandate, shall, a t all times, ensure tha t thesupply of sugar is sufficient to meet the domestic demand andt h a t the price of sugar is stable.

To this end, the SRA shall recommend and the properagencies shall undertake t h e importation of sugar whenevernecessary and shall make appropriate adjustments to theminimum access volume parameters for sugar in the Tariffa n d Customs Code.SEC. 11. Role of Government Agencies. - To ensure theeffective implementation of the NBP, concerned agencies shallperform the following functions:a) The DOF shall monitor the production and importationof biofuela through the Bureau of Internal Revenue (BIR) andt h e Bureau of Customs (BOC);b) The DOST and the DA shall coordinate in identifyinga n d developing viable feedstock for the production of biofuels;c) The DOST, t h r o u g h t h e Philippine Council forIndustry and Energy Research and Development (PCIERD),shall develop and implement a research and developmentprogram supporting a sustainable improvement in biofuel 11production and utilization technology. It shall also publish andpromote related technologies developed locally a n d abroad;d) T h e DA through its relevant agencies shall:(1) Within three months from the effectivity of this Act,develop a national program for the production of crops for usea s feedstock supply. For this purpose, the Administrators ofthe SRA and the PCA, and other DA-attached agencies shall,within the i r authority, develop and implement policiessupporting the Philippine Biofuel Program a n d submit thesame to the Secretary of the DA for consideration;(2) Ensure increased productivity and sustainable supplyof biofuel feedstocks. It shall institute a program tha t wouldguarantee t h a t a sufficient a n d reliable supply of feedstocksis allocated for biofuel production; and(3) Publish information on available and suitable areasfor cultivation and production of such crops.e) The DOLE shall:(1) Promote gainful livelihood opportunities a n d facilitateproductive employment through effective employment services


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and regulation;(2) Ensure the access of workers to productive resourcesa n d social protection coverage; and(3) Recommend plans, policies and programs t h a t willenhance the social impact of the NBP.f) The Tariff Commission, in coordination with t h e

appropriate government agencies, shall create a n d classify atariff line for biofuels and biofuel-blends in consideration ofWTO a n d AFTA agreements; a n d 12g) T h e local government units G U S ) shall assist theDOE in monitoring t h e distribution, sale and use of biofuelsand biofuel-blends.SEC. 12. Prohibited Acts. - The following acts shall beprohibiteda) Diversion of biofuels, whether locally produced orimported, to purposes other than those envisioned in thisAct;b) Sale of biofuel-blended gasoline or diesel t h a t fails to

comply with the minimum biofuel-blend by volume in violationof the requirement under Section 5 of this Act;c) Dishibution, sale and use of automotive fuel containingharmful additives such as, but not limited to, MTBE a t suchconcentration exceeding the limits to be determined by theNBBd) Noncompliance'with the established guidelines of t h ePNS and DOE adopted for the implementation of this Act;a n de) False labeling of gasoline, diesel, biofuels and biofuel-blended gasoline and diesel.SEC. 13. Penal Provisions. - Any person, who wiufullyaids or abets in the commission of a crime prohibited hereinor who causes the commission of any such act by anothershall be liable in the same manner a s the principal.In the case of association, partnership or corporations,t h e penalty shall b e imposed on the partner, president, chiefoperating officer, chief executive officer, directors or officers,responsible for the violation. 13

The commission of an act enumerated in Section 12, uponconviction thereof, shall suffer the penalty of one year to fiveyears imprisonment and a fine ranging from a minimum ofOne million pesos ~1,000,000.00) t o Five million pesos('5,000,000.00).In addition, the DOE shall confiscate any amount of suchproducts that fail to comply with the requirements of Sections4 and 5 of this Act, and implementing issuances of the DOE.

The DOE shall determine the appropriate process a n d t h emanner of disposal and utilization of the confiscated products.'llle DOE is also empowered to stop and suspend the operationof businesses for refusal to comply with a n y orde r o rinstruction of the DOE Secretary in t h e exercise of hisfunctions under this Act.Further, the DOE is empowered to impose administrativefines and penalties for any violation of the provisions of thisAct, implementing rules and regulations and other issuancesrelative to this Act.S E C . 14. Appropriations. - Such s u m s as may benecessary for the initial implementation of this Act shall bet a k e n from t h e c u r r e n t a p p r o p r i a t i o n s of t h e DOE.

Thereafter, the fund necessary to carry out the provisions ofthis Act shall be included in the annual General AppropriationsAct.


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SEC. 15. Iniplementing Rules and Regulations (ZBR). -The DOE, in consultation wi th the NBB, the stakeholders andother agencies concerned, shall within three months from theeffectivity of this Act, promulgate the IRR of this Act: P m i d d ,

Tha t prior to its effectivity, the draft of the IRR shall beposted a t the DOE website for a t least one month, a n d shall

be published in a t least two newspapers of general circulation.SEC. 16. &gre6sional Oversight Committee. - Upon theeffectivity of this Act, a Congressional Committee, hereinafterreferred to as the Biofuels Oversight Committee, is hereby 14constituted. The Biofuels Oversight Committee shall becomposed of fourteen (14) members, with the Chairmen of theCommittees on Energy of both Houses of Congress a s co-chairmen. The Chairmen of the Committees on Agriculture and

Trade and Industry shall be ex &cio members. An additionalfour members from each House, to be designated by t h eS e n a t e P r e s i d e n t a n d t h e S p e a k e r of t h e Hous e ofRepresentatives, respectively. The minority shall be entitled to

p r o - r a t a r e p r e s e n t a t i o n b u t s h a l l h a v e a t l e a s t onerepresentative in the Biofuels Oversight Committee.SEC. 17. Benefits of Biofuel Workers. - This Act shallnot in any way result in the forfeiture or diminution of theexisting benefits enjoyed by the sugar workers a s prescribedunder R.A. No. 6982, or the Sugar Amelioration Act of 1991,in case sugarcane shall be used a s feedstock.

The NBB shall establish a mechanism similar to t h a tprovided under t h e Sugar Amelioration Act of 1991 for thebenefit of other biofuel workers.SEC. 18. Special Clause. - This Act s h a l l n o t beinterpreted a s prejudicial to clean development mechanism(CDM) projects that cause carbon dioxide (COJ and greenhousegases (GHG) emission reductions by means of biofuels uae.SEC. 19. Repealing Clause. - The provisions of Section148 (d) of R . k No. 8424, otherwise known as Tax ReformAct of 1997, a n d all other laws, presidential decrees orissuances, executive orders, presidential proclamations, rulesa n d regulations or p a r t s thereof inconsistent with t h eprovisions of this Act, are hereby repealed, modified or amendedaccordingly.SEC. 20. Separability Clause. - If any provision of thisAct is declared unconstitutional, the same shall not affect thevalidity a n d effectivity ,of the other provisions hereof. 15SEC. 21. Effectivity - This Act shall take effect fifteen(15) days after its publication in a t least two newspapers ofgeneral circulation.&prwed,

This Act which is a consolidation of Senate Bill No. 2226 andHouse Bill No. 4629 was finally passed by the Senate a n d theHouse of Representatives on November 29,2006.Approved: JAN 1 2 20070

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