Philippines accelerates SAF plans as energy crisis sharpens focus on fuel transition

The Philippines is stepping up efforts to develop a sustainable aviation fuel industry despite having no domestic SAF production, as policymakers and industry participants look to cut dependence on imported petroleum products following a national energy emergency declared earlier this year, according to a US Department of Agriculture report released July 23.

The momentum comes as the government drafts a national SAF roadmap, establishes a dedicated SAF committee and backs multiple research initiatives exploring feedstocks ranging from used cooking oil to coconut-derived materials. The push forms part of a broader transport fuel transition strategy being considered amid elevated oil prices and supply concerns linked to geopolitical tensions in the Middle East.

The Philippines currently produces no SAF, but development efforts gained traction in 2026 through a series of government and industry initiatives. A multi-stakeholder working group was formed following a SAF policy development workshop in March, while a dedicated SAF Committee under the National Biofuels Board has been tasked with shaping the country's biojet strategy.

The roadmap under development is evaluating hydroprocessed esters and fatty acids (HEFA), alcohol-to-jet, power-to-liquid and fermentation-based pathways.

The country's aviation sector is also preparing for future decarbonization requirements under the International Civil Aviation Organization's Carbon Offsetting and Reduction Scheme for International Aviation, or CORSIA.

Philippine Airlines is expected to comply with mandatory CORSIA requirements from 2027, increasing pressure for the development of domestic low-carbon aviation fuel supplies.

According to the report, aviation fuel accounted for 3.4% of total Philippine fuel demand in 2025, with the market dominated by Philippine Airlines and Cebu Pacific.

The arrival of new generation aircraft capable of operating on higher SAF blends is expected to support adoption as supplies become available.

A key focus area is feedstock availability. The Civil Aviation Authority of the Philippines has identified agricultural residues and coconut-based resources as potential raw materials for SAF production.

The country generates an estimated 20 million metric tons/year of rice straw, much of which is currently treated as waste, while industry groups are also exploring the use of non-food-grade or "reject" coconuts as SAF feedstock.

Partnership activity is also expanding. The Island Skies Alliance signed an agreement with the Philippine Coconut Authority to explore SAF production from coconut-based feedstocks, while the National Aviation Academy of the Philippines entered into a separate collaboration focused on capability building and knowledge exchange for sustainable aviation development.

The SAF drive is unfolding amid an energy emergency declared by President Ferdinand Marcos Jr. on March 24, 2026. The Philippines, which remains heavily dependent on imported petroleum products, experienced sharp fuel price increases following disruptions linked to the Middle East conflict.

The Department of Energy subsequently identified SAF as one of the measures being evaluated under a broader fuel transition plan aimed at reducing import dependence.

While SAF remains at an early stage, conventional biofuels continue to play a significant role in the country's transport fuel mix. Fuel ethanol consumption is forecast to rise 2% in 2026 to 875 million liters, while biodiesel demand is expected to increase 1% to 350 million liters. Growth, however, is being restrained by weaker vehicle sales, high fuel prices and slower-than-expected adoption of higher biofuel blends.

The Philippines remains highly reliant on ethanol imports to meet blending requirements. Fuel ethanol imports are projected to reach 490 million liters in 2026, covering roughly 56% of total fuel ethanol demand. The US supplied 89% of Philippine fuel ethanol imports in 2025, strengthening its position as the country's dominant supplier.

Although SAF policy development is advancing, major challenges remain. Stakeholders cited concerns around feedstock collection, technology deployment, financing and regulatory support. The SAF roadmap, originally targeted for completion in 2024, has yet to be finalized, highlighting the work still required before commercial production can take shape.

Nevertheless, the report suggests that the country's combination of agricultural feedstocks, existing biofuels experience and growing airline engagement is beginning to lay the groundwork for a future SAF industry. With aviation decarbonization becoming an increasingly important policy objective and energy security concerns remaining elevated, the Philippines appears to be positioning SAF as a central pillar of its longer-term transport fuel strategy.

Platts, part of S&P Global Energy, assessed sustainable aviation fuel HEFA-SPK basis FOB Straits at $2,550/mt on July 24, up $5/mt from July 23.