Biodiesel consumption in the Philippines is set to continue to rise in 2026

Biodiesel consumption in the Philippines is forecast by USDA to increase by 1% year-on-year in 2026 to 350 mln liters. Growth is expected to slow due to weaker vehicle sales and higher fuel prices, according to USDA’s Philippines – Biofuels Annual report.

At the same time, the country’s biodiesel production is expected to grow at a much faster pace, rising 6% to 370 mln liters. Growth will be supported by the current B3 mandate, which requires a 3% biodiesel blend, as well as an increase in the number of biodiesel producers from 13 in 2025 to 15 in 2026.

Coconut oil remains the main feedstock for biodiesel production in the Philippines and is processed into coconut methyl ester (CME). According to industry estimates, existing production capacity could support blends of up to B7, meaning the country’s infrastructure is already capable of handling a potential transition to B5. However, further increases in the blending mandate would require additional development of domestic feedstock supplies.

Expansion of the biodiesel industry could provide an additional stable market for coconut oil. A significant share of Philippine coconut oil production traditionally goes to export markets, but stronger domestic demand from the biofuel sector could provide coconut farmers with a more predictable outlet, particularly if biodiesel blending requirements are increased further.

Meanwhile, the Philippines is stepping up efforts to develop a sustainable aviation fuel (SAF) industry, although there is currently no domestic SAF production. In 2026, the country established a dedicated working group, while projects exploring coconut-based feedstocks for SAF are being developed. Transport and aviation authorities, together with Airbus, are also conducting a feasibility study on domestic SAF production that is expected to support future policy development.

Tags: biodiesel, consumption, Philippines