Although biodiesel consumption in the Philippines is expected to expand in 2026, it would be at a slower pace due to reduced car sales and higher fuel prices, according to a US Department of Agriculture (USDA) report.
Domestic biodiesel consumption was forecast to increase by 1% in 2026 compared to the previous year to 350M litres, the 23 July ‘Philippines – Biofuels Annual’ said.
Biodiesel production was expected to reach 370M litres in 2026, up 6% from the revised 2025 production level.
“This growth is supported by rising consumption under the current B3 mandate, and the increase in the number of biodiesel producers from 13 in 2025 to 15 this year,” the USDA said.
According to industry sources, existing biodiesel plants could support blends up to B7, suggesting that current production infrastructure could cope with B5 implementation.
“Industry contacts also note that while the bulk of coconut oil continues to flow to traditional export markets, the local biodiesel industry offers coconut farmers a more predictable market, an advantage that would become more pronounced with the implementation of higher blend mandates,” the USDA said.
In the Philippines, biodiesel is currently produced from coconut oil transesterified into coco methyl ester (CME), according to the report.
Increasing the biodiesel blending mandate would require sustained development of domestic feedstock sources to ensure adequate supply, the USDA said.
Meanwhile, although the Philippines currently has no domestic sustainable aviation fuel (SAF) production, efforts to develop the sector gained further traction in 2026, according to the report.
A multi-stakeholder working group was set up to accelerate priority actions for developing the country’s SAF industry and several partnerships were also forged, including developing SAF from coconut-based feedstocks, and creating a platform for capacity building and knowledge exchange.
The Philippine government had also highlighted SAF as a measure under its fuel transition plan for the transport sector, although details of the plan had not been released at the time of the report.
In addition, a study to assess the feasibility of local SAF production was being conducted by the Department of Transport, the Civil Aviation Authority of the Philippines (CAAP) and global aircraft manufacturer Airbus. The study would cover macro-economic data analysis, SAF feedstocks and production pathways evaluation, financing assessment and policy support, and an action plan, the report said.
“The study will support policy development and is expected to encourage industry stakeholders to advance SAF production in the Philippines,” the USDA said.
