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

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

3. Current Situation Consumption of energy is increasing: 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) 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 Approximately 46% of Energy being imported Economic Dependency of Energy Source Economic Dependency of Energy Source Growing effect of Greenhouse Gases on the environment Growing effect of Greenhouse Gases on the environment Fuel prices steadily increasing causing public concern 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. 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 Determine the economic feasibility of the Feedstock Growing demand for planting materials Growing demand for planting materials Awareness and interest in jatropha growing. Awareness and interest in jatropha growing. Need to create the agriculture infrastructure to create a sustainable source of feedstock Need to create the agriculture infrastructure to create a sustainable source of feedstock 1.Training on Planting Methodology 2.Nursery (Propagation) Selection Selection Seeds Seeds Cuttings Cuttings Tissue Culture Tissue Culture Ect. Ect. 3.Plantations 4.Buying and Processing Centers

7. Current Situation; cont. Chemrez, recently inaugurated CME plant biodiesel plant in country. Chemrez, recently inaugurated CME plant biodiesel plant in country. New investment ventures being heard of creating operations to produce Bio Diesel in the Philippines. 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 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 Jatropha Karanja Karanja Palm Palm Coconut Coconut Rape Seed Rape Seed Sunflower Sunflower Soya Soya

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

10. Bio Diesel Feed Stock Jatropha Oil Jatropha Oil

11. Bio Diesel Feed Stock Karanja Oil Karanja Oil

12. Bio Diesel Feed Stock Palm Oil Palm Oil

13. Bio Diesel Feed Stock Coconut Oil Coconut Oil

14. Bio Diesel Feed Stock Rapeseed Oil Rapeseed Oil

15. Bio Diesel Feed Stock Sunflower Oil Sunflower Oil

16. Bio Diesel Feed Stock Soya Oil Soya Oil

17. Why Jatropha Does not compete with price or demand of the food market Does not compete with price or demand of the food market Thrives on most soils in the Philippines Thrives on most soils in the Philippines Needs minimum maintenance Needs minimum maintenance Can withstand drought Can withstand drought Very few pests Very few pests Not edible by animals Not edible by animals Easy Propagation with rapid growth Easy Propagation with rapid growth Harvesting beginning 2 nd year Harvesting beginning 2 nd year Average 30% Oil yield from seed crushing Average 30% Oil yield from seed crushing Excellent opportunities of income from by products Excellent opportunities of income from by products Most Cost Effect Seed Stock 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 CropArea (‘000 ha) Production (‘000 tons) Value of production (M pesos) Rice 4 006.4 13 499.9 117 989.0 Maize 2 409.8 4 615.6 32 540.1 Coconut 3 214.2 14 121.9 38 694.0 Sugarcane 389.4 23 981.3 21 823.0 Banana 409.8 5 369.0 30 066.2 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 Land Use Area (ha)Percentage Agriculture9 728 80032.95 Forestry19 062 60064.56 Settlement131 4000.44 Mining and quarrying8 7000.029 Inland Fisheries595 7002.02 Open Land 1 1000.004 Total29 528 300100.00 Administrative boundaries

21. PROJECT IMPLEMENTATION N u c l e u s P h a s e 2 P h a s e 1 10 Ha. NUCLEUS 0to6months Development Period 5,000Hectares 15,000Hectares 12to24months Development Period 6to12months Development Period

22. Large Scale Plantation Development 10 x 3 x 5 x monocrop intercrop 5,000 - hectare plantation monocrop intercrop 1,000 - hectare plantation 10 ha 5,000 ha 15,000 ha

24. FULL IMPLEMENTATION

25. Current Nucleus Farms/ Projected production LocationInitialArea Target Area CJO/yr 3 kg/shrub/yr CJO/y 6 kg/shrub/yr GEN. SANTOS 5 ha 5 ha 20,000 ha 20,000 ha 40,000 mt 40,000 mt 80,000 mt 80,000 mt PIKIT 1 ha 1 ha 5,000 ha 5,000 ha 10,000 mt 10,000 mt 20,000 mt 20,000 mt DACONGCOGON 5 ha 5 ha 20,000 ha 20,000 ha 40,000 mt 40,000 mt 80,000 mt 80,000 mt DIGOS 5 ha 5 ha 20,000 ha 20,000 ha 40,000 mt 40,000 mt 80,000 mt 80,000 mt Total: Total: 16 ha 16 ha 65,000 ha 65,000 ha 130,000 mt 130,000 mt 260,000 mt 260,000 mt

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

27. MULANAY QUEZON

28. Production Cost Items NurseryPlantation ProcessingRefining 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 Seedling: per pieceSeeds: per tonCJO: per ton EN 14214: per ton

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

30. “ Meeting Growing Global Demand for Biodiesel ” 1. D1's objective is to become a global, sustainable producer of competitively priced biodiesel. 2. We aim to meet the world's growing demand for more green transport fuel. 3. We intend to deliver a consistent high volume output of sustainable vegetable feedstock oils and high quality biodiesel. 4. 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. 5. D1 is commercially driven with a business model that addresses the pressing global issues of fuel supply security, climate change and sustainable development.” 6. With an Immediate Goal of planting 6,000 hectares for 2006 for the Philippines