The Philippines is considering implementing a 1pc sustainable aviation fuel (SAF) mandate by 2030, although discussions on the proposal are ongoing, government officials said.
"The recommendation is to have a 1pc SAF mix or mandate by 2030. This allows enough time before the mandate takes effect to develop local supply over the next three to four years," Philippines Department of Energy (DoE) undersecretary Alessandro Sales told reporters on the sidelines of the ASEAN Energy Business Forum (AEBF) in Manila this week.
"If I set up a facility and cannot sell [SAF] because of high prices, why would I do it? The workaround is setting a 1pc or 2pc mandate to guarantee a market. The facility can then be established, and costs will eventually decline to more competitive levels," Sales added.
The country currently has no SAF production onstream yet, although project developer SAFAsia will likely reach a financial investment decision on its 20,000 t/yr Fischer-Tropsch plant by year-end, with all four 5,000 t/yr plant modules slated to be online by 2031. Alcom Carbon Markets Philippines is also planning to develop an alcohol-to-jet plant, which is now in the front-end engineering design (FEED) stage and is projected to produce 100,000 t/yr of SAF when operational.
The Philippines' potential SAF mandate is currently under discussion with the DoE-chaired National Biofuels Board (NBB), looking at the maturity of local production, readiness of infrastructure and entire SAF ecosystem, NBB's SAF committee chair and strategic planning division chief Sofia Fulmaran told Argus.
"We don't want to announce a mandate without preparation. We're also benchmarking best practices from other Asean member states [which have adopted SAF] and seeing how they've coped with certain challenges we might also be experiencing. We want to ensure our partners in the entire SAF supply chain will each have their own piece of the pie," Fulmaran said at the inaugural ASEAN SAF Convergence Forum, held as part of the AEBF.
The DoE provides policy leadership, technical direction, and a long-term vision, while the Philippines' Board of Investments (BOI) works with the DoE to translate that vision into investments, industries, jobs, and economic opportunities, said Ceferino Rodolfo, Philippines' department of trade and industry's undersecretary and BOI managing head.
The Philippines became a participating member state in the Carbon Offsetting and Reduction Scheme for International Aviation (Corsia) in 2018. It also has developed a brief framework for its upcoming SAF mandate, which lays out six areas of action: policy and a regulatory frameworks; ensuring feedstock availability and sustainability; technology, infrastructure and production; human and technical capabilities; market demand and airlines engagement; and investment and funding opportunities.
Airline challenges
Philippine Airlines (PAL) vice president for corporate affairs Salvador Britanico acknowledged SAF remains the largest lever in enabling PAL to achieve net-zero emissions by 2050 — contributing to 65pc of reductions, while offsets and carbon capture are expected to contribute 19pc, and new aircraft technologies are expected to account for 13pc.
But he also said that airlines in the region are "starting at a deficit" when it comes to economics, and there are challenges in ensuring their business is sustainable and profitable.
Britanico noted the need to map out near-term decarbonisation targets — over the next five, 10, and 20 years, for instance, adding: "Every stakeholder will have their own agenda, but they'll have to work together for the public to have trust in the systems at play."
SAF is not simply an energy issue, but ultimately an opportunity for social development, Ceferino said.
"While SAF still carries a premium over conventional jet fuel which affects airlines, producers, investors and governments alike, history teaches us something very important — transformative industries almost always begin this way," he added.
"Commercial aviation, semiconductors, solar power were once expensive. Electric vehicles were once considered impractical. They became competitive because people invested in, improved, and scaled them.
"The same will be true for SAF. The SAF premium is not a reason to wait; it is a reason to build. And if there is any region positioned to bring that premium down, it is Asean. We have the resources, market, and industrial capabilities. And unlike many regions, we have the opportunity to move forward together."
