Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL No. 7356

Introduced By Representative ALLAN BENEDICT S. REYES

EXPLANATORY NOTE

The Government considers the use of biofuels for transport as “a major thrust of the
Philippines to reduce the country’s dependence on imported fossil fuels and to mitigate
greenhouse gas emissions.”' For this purpose, we have enacted Republic Act No. 9367,
otherwise known as the Biofuels Act of 2006 and implemented the National Biofuels
Program (“NBP”) to promote investments in biofuel productions.2 Among others, the
industry hopes to achieve the following by year 2030:

1. Maximize the contributions of indigenous biofuels in the country’s energy mix
towards self-sufficiency and better environmental conditions;

2. Harmonize research, development, demonstration, and commercialization efforts;

3. Coordinate efforts towards the creation of new applications and markets for
biofuels; and

4. Update national incentives and regulatory requirements to encourage production
and use of biofuels.

Aside from those identified in the Biofuels Act of 2006, another possible raw material
for the production of biodiesel is used cooking oil. In fact, “[rlesearches into the productive
chain of this type of biofuel were performed in Brazil while several scientific studies
approaching processes of pretreatment and transesterification of waste cooking oil were
analyzed.”* One study revealed that, in terms of the economic benefits provided by used
cooking oil, there are “reductions of up to 45% of direct production costs compared to virgin
oils, even with the additional costs of the pretreatment."> Moreover, given the abundant
supply and availability of used cooking oil, it has the “potential to supply up to 13% of the
demand for biodiesel in Brazil."

' Philippine Biofuels, Board of Investments, 21 June 2011, available at _htps://boi.gov.ph,
content/uploads/2018/02/Bio-Fuels.pdf (last accessed 9 August 2020).
2 Td
3 S. Gopalakrishnan, Production of Biodiesel from used Cooking Oil, IJIRST, National Conference on Recent
Advancements in Mechanical Engineering, (RAME'I7), March 2017 avalable at
24200684 PRODUCTION DIESEL FROM USE!

i
KING OIL (ast accested 9 August 2020).

‘ De ae Carlos Daniel Mandolesi, et al, Biodiesel production from used cooking oil: A review, Renewable and
Sustainable Energy Reviews, Volume 27, November 2013, Pages 445-452." available at
hitps://wow.sciencedirect.com/science/article/abs/pii/S1364032113003912 (last accessed 9 August 2020).

s Td.

‘ De Araijo, Carlos Daniel Mandolesi, et al, Biodiesel production from used cooking oil: A review, Renewable and
Sustainable Energy Reviews, Volume 27, November 2013, Pages 445-452 available at
hnps./ Avan sciencedirect.com/science/article/abs/pii/S13640321 13003912 (ast accessed 9 August 2020)

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On top of the list of suppliers of used cooking oil for production of biodiesel are
restaurants, cafeterias, kitchenettes and other similar establishments that regularly consume
ooking oil in large quantities. The proper handling and disposal of used cooking oil by these
establishment is, however, not regulated as ‘of the moment. Not only can the reuse of used
cooking oi harm human health, improper disposal of used cooking oll imposes additional
burden on the government of treating oily wastewater and maintaining public sewers.

To address this gap, the Philippines needs a law that will prohibit the improper
transportation, coliection and disposal of used cooking oll. For this purpose, clear ordinances
and harmonized regulations must be put in place in all local government units fo ensit® that
{he transportation, collection and disposal of used cooking oil all throughout the county ore
ae ener manner that is environmentally safe and protective of public health. We must also
fecognize and reward the use of platforms and technologies or any undertaking for the
oan roatmont and production of biodiesel from used cooking oil. To encourage this, the
cect tent must provide attractive incentives and rewards to boost the cooperation and
active participation of private entities and individuals in using, developing of undertaking
a Fective biodiesel production projects, technologies, or activities from used cooking oll

In view of the foregoing, passage of this bill is earnestly sought

J AT

HON. ALLAN BENEDICT S. REYE!
Representative
3 District, Quezon City

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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 7356

Introduced By Representative ALLAN BENEDICT S. REYES

AN ACT PROHIBITING THE IMPROPER DISPOSAL OF USED COOKING OIL AND
PROVIDING INCENTIVES AND REWARDS TO LOCAL GOVERNMENT UNITS,
PRIVATE ENTITIES AND INDIVIDUALS WHO DEVELOP OR UNDERTAKE EFFECTIVE
BIODIESEL PRODUCTION PROJECTS, TECHNOLOGIES, OR ACTIVITIES FROM
USED COOKING OILAND APPROPRIATING FUNDS THEREFOR

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled

SECTION 1.Short Title. - This Act shall be known as the “Proper Disposal of
Used Cooking Oil Act of 2020.”

SECTION 2.Declaration of Policy.- The Biofuels Act of 2006 aims to reduce the
country's dependence on imported fuels with due regard to the protection of public
health, the environment, and the natural ecosystems consistent with the country’s
sustainable economic growth.’ It mandates the use of biofuels as a measure to develop
and utilize indigenous renewable and sustainable-sources clean energy sources to
reduce dependence on imported oil; mitigate toxic and greenhouse gas (GSG)
emissions; increase rural employment and income; and ensure the availability of
alternative and renewable clean energy without any detriment to the natural ecosystem,
biodiversity and food reserves of the country.*The said law also provides for additional
incentives to encourage investments in the production, distribution and use of locally-
produced biofuels.?

This Act further strengthens the declared policy of the Biofuels Act of 2006 and, in
addition to coconut, jatropha, sugarcane, cassava, corn, and sweet sorghum, and other
raw materials identified therein, proposes the production of biodiesel from used cooking
oil.

SECTION 3.Prohibition.- Upon the effectivity of this Act, it shall be unlawful for
any person to collect, transport, and otherwise dispose of used cooking oil not in
compliance with the established guidelines that will be adopted by the Department of
Interior and Local Government (“DILG"), in consultation with the Department of

Section 2, Republic Act No. 9367, An Act to Direct the Use of Biofuels, Establishing for this Purpose the
Biofuel Program, Appropriating Funds Therefor, and for Other Purposes, 12 January 2007. (hereinafter,
“Biofuels Act of 2006"

: Ia

, Section 6, Biofuels Act of 2006.

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Environment and Natural Resources ("DENR”), Department of Energy (“DOE”) and
Department of Trade and Industry ("DT!’), for the implementation of this Act.

SECTION 4. Penal Provisions. - Any person who commits, wilfully aids or abets
in the commission of the acts prohibited herein or who causes the commission of any
such acts by another shall suffer the penalty of a fine ranging from a minimum of One
million pesos (P 1,000,000.00) to Five million pesos (P 5,000,000.00).

The LGU having jurisdiction over the person committing any of the acts prohibited
herein is also empowered to stop and suspend the operation of a business for refusal to
comply with any of the provisions of this Act.

SECTION 5. Role of Local Government Units.- In addition to their role of ensuring
the effective implementation of the NBP by assisting the DOE in monitoring the
distribution, sale and use of biofuels and biofuel-blends,'° LGUs are hereby encouraged
to set up used cooking oil collection sites in their respective jurisdictions.

For this purpose, the DILG is hereby mandated to come up with a program that
will serve as a means of providing incentives for LGUs who will set up such collection
sites by providing them with a performance-based grant which they can use to
supplement funding for local development projects.

SECTION 6. Incentive Scheme for Private Entities. - To encourage investments
in the production, distribution and use of locally-produced biofuels using used cooking
oil, and without prejudice to enjoying applicable incentives and benefits under existing
laws, rules and regulations, the following additional incentives as provided under the
Biofuels Act of 2006, are hereby also adopted:

a) Specific tax

The specific tax on local or imported biofuels component, per liter of volume shall
be zero (0). The gasoline and diesel fuel component, shall remain subject to the
prevailing specific tax rate."

b) Value Added Tax
The sale of used cooking oil and other raw materials to be used in the production
of biofuels shall be exempt from the value added tax.

c) Financial Assistance
Government financial institutions, such as the Development Bank of the
Philippines, Land Bank of the Philippines, Quedancor and other government
institutions providing financial services shall, in accordance with and to the extent
of the enabling provisions of their respective charters or applicable laws, accord
high priority to extend financing to Filipino citizens or entities, at least sixty percent
(60%) of the capital stock of which belongs to citizens of the Philippines that shall
engage in activities involving production, collection, storage, handling and
transport of used cooking oil for the production of biofuel, as certified by the
DOE.'?

0 Section 11(@), Biofuels Act of 2006.
" Section 6, Biofuels Act of 2006.
2 Id

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CONAMVAWNE

SECTION 7. Implementing Rules and Regulations and Standard Forms. -
Within sixty (60) days from the promulgation of this Act, the necessary rules and
regulations for the proper implementation of its provisions shall be formulated by
the appropriate government office or agency in coordination with all the
stakeholders and covered establishments and institutions.

SECTION 8. Repealing Clause. - All laws, executive orders, administrative
orders, rules, regulations, decrees, and other issuances or parts thereof, which are
inconsistent with the provisions of this Act are hereby revoked, repealed, or modified
accordingly.

SECTION 9.  Separability Clause. - If any provision of this Act is held
unconstitutional or invalid, the other provisions not affected thereby shall continue in
operation and remain in full force and effect.

SECTION 10. Effectivity Clause. — This Act shall take effect fifteen (15) days
after its publication the Official Gazette or in the two (2) national newspaper of general
circulation.

Approved,

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