Acceleration of Alcohol Program

September 18, 1985

EXECUTIVE ORDER NO. 1054

ACCELERATING THE ALCOHOL PROGRAM AND AMENDING EXECUTIVE ORDER NO. 580 WHICH CREATED THE ALCOHOL COMMISSION

WHEREAS, Executive Order No. 580 limits the powers and functions of the Philippine National Alcohol Commission to the administration of alcohol production throughout the country in connection solely with the development and use of alcohol as an alternative motor fuel; HScCEa

WHEREAS, the ailing Philippine sugar industry, now adversely affected by low world prices, oversupply and reduced consumption as well as high costs of production, urgently requires a complementary long-term solution through the expanded nationwide production of ethyl alcohol (ethanol) from sugar cane;

WHEREAS, for the Philippine domestic market the use of ethanol as an octane enhancer by blending with gasoline will lead to the displacement of tetraethyl lead, a chemical additive in gasoline which is imported and has been found to be environmentally unacceptable and a health hazard;

WHEREAS, ethanol can be exported in substantial quantity to countries such as Japan either as potable material or as an octane enhancer, such exports generating substantial foreign exchange and improving the balance-of-payments of the country;

WHEREAS, the nationwide production of ethanol from sugar cane will alleviate the plight of the sugar industry, generate additional employment, enhance the technological and engineering position of the country in particular, and protect the national interest and improve the national economy in general;

WHEREAS, under Presidential Decree No. 1416, the President is empowered to undertake such organizational and related improvements as may be appropriate in the light of changing circumstances and new developments;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Republic of the Philippines, by virtue of the powers vested in me by the Constitution and Presidential Decree No. 1416, do hereby order the revision of Executive Order No. 580 to read as follows:

SECTION 1. Creation of an Alcohol Commission. — There is hereby created a Philippine National Alcohol Commission which shall be an attached agency of the Ministry of Trade and Industry and shall have the general responsibility of affecting the production, in the soonest possible time, of ethanol in adequate quantities for the purpose of blending with gasoline as octane enhancer and as gasoline extender; and for potable, pharmaceutical and industrial uses in both the domestic and export markets.

SECTION 2. Powers and Functions of the Commission. — The Commission shall have the following functions:

a. Formulate and define the policies, plans and programs and the necessary guidelines for carrying out and implementing a national program for the production and distribution of ethanol for blending with gasoline as motor fuel; ITHADC

b. Promote the production of ethanol from alternative sources such as sugar, cassava and sorghum and the effective utilization of their by-products;

c. Promote the production of ethanol for potable, pharmaceutical & industrial purposes for domestic use and for export;

d. Process and approve applications for the up-grading, renovation and establishment of ethanol distilleries by both private and public sectors;

e. Promote and coordinate the conduct of research and development activities on ethanol production, its utilization as motor fuel; as well as various feedstock possibilities;

f. Determine and indicate the areas of responsibility of the various agencies involved in the program, including those not represented in the Commission;

g. Determine, in consultation with the implementing agencies concerned, their respective work programs and time schedules for carrying them out, and resolve actual or potential areas of conflict, overlapping of jurisdiction or functions, including, but not limited to, the question of pricing;

h. Monitor and evaluate all on-going projects undertaken by the various agencies concerned to ensure their proper implementation in accordance with pre-determined schedules;

i. Where necessary and in the interest of accelerating the implementation of the ethanol program, engage directly in any aspect of the ethanol program, including land development, agricultural production, distillation, and other related activities.

SECTION 3. Organization of the Commission. — The Commission shall be governed by a Board of Commissioners composed of the Minister of Trade and Industry, who shall be ex-officio Chairman of the Commission, the Minister of Finance, the Minister of Energy, the Minister of Agriculture and Food, the Director General of the National Economic and Development Authority, the Director General of the National Science and Technology Authority, the Chairman of the Philippine Sugar Commission, and two (2) Commissioners to be appointed by the President from the private sector.

The Commission shall have an Executive Director to be appointed by the President.

SECTION 4. Implementing Agencies. — The implementation of the ethanol program shall be the responsibility of the various agencies concerned as directed and coordinated by the Commission. There shall be as follows:

a. The Ministry of Trade and Industry shall promote the domestic use and export of ethanol, and through the Board of Investments, provide the necessary investment and financial incentives to promote the establishment of ethanol distilleries including the plantations necessary to supply raw materials for ethanol and through the National Development Company to make available the necessary capital investments to supplement private investments in the program. ETDHSa

b. The Ministry of Finance shall formulate the appropriate tax measures on ethanol to promote its domestic use and export market.

c. The Ministry of Energy shall promote and implement the program on ethanol for power uses both as gasoline octane enhancer and as gasoline extender and shall be responsible on a nationwide basis for arranging the purchase and distribution of the ethanol required for such purposes.

d. The Ministry of Agriculture and Food shall investigate the technical aspects and problems of production of agricultural crops such as cassava, corn and sorghum, and promote the production of ethanol from such crops as may be found to be technically and economically feasible, and through its agricultural stations and institutions, develop the cultivation and propagation of sugar cane varieties suitable for optimum ethanol production.

e. The National Economic and Development Authority shall assess the overall impact of the proposed ethanol program on the sugar industry in particular and the national economy in general and shall include said program in the development of economic planning.

f. The National Science and Technology Authority shall provide the necessary research and development support in the utilization of other ethanol feedstocks such as cassava, sweet potato, sorghum, and cellulose wastes; conversion of ethanol to high value products; efficient fermentation and distillation techniques; stillage treatment; ethanol by-product utilization and other related activities.

g. The Philippine Sugar Commission shall promote the establishment of ethanol distilleries, whether public or privately-owned, and ensure the adequate supply of sugar cane for the production of ethanol. SDHAEC

SECTION 5. Appropriations. — The appropriation of the Commission shall continue to be included in the General Appropriations Act.

SECTION 6. Repealing Clause. — Letter of Instructions No. 888 creating the Inter-Agency Committee to Accelerate the Implementation of the National Alcogas Program and Executive Order No. 580 and such other laws, rules and regulations inconsistent herewith are hereby repealed or modified accordingly.

SECTION 7. Effectivity. — This Executive Order shall take effect immediately.

DONE in the City of Manila, this 18th day of September, in the year of Our Lord, Nineteen Hundred and Eighty-Five.

Published in the Official Gazette, Vol. 81 No. 38 page 4141 on September 23, 1985.