The World's technology correspondent Jason Margolis reports on a new law in the Philippines that requires all commercially available diesel fuel be mixed with coconut oil.

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Coconut trees

Watch a video of how coconuts are picked from the trees and the meat is extracted in the Philippines. Produced by Loren Mendell.

Listen to a Web-only excerpt with David Friedman, research director, clean vehicles program, Union of Concerned Scientists.

Several countries are trying to develop biofuels as a way to protect their environment and reduce oil consumption. Here in the United States, that means using corn to make a fuel blend that powers cars but pollutes less. In the Philippines, they're turning to that country's major crop: the coconut. The Philippine Congress recently passed a bill mandating that diesel fuel be mixed with coconut oil starting in March. The World's technology correspondent Jason Margolis traveled to the Philippines and sent us this report.

Margolis: The thwack of a machete splitting open a coconut is a sound that's been heard for centuries in the Philippines. In the Philippines, the coconut is commonly referred to as, The Tree of Life.

Masa:"Plenty of uses this coconut (knocks & laughs)."

Margolis: Rudolpho Masa is a 75-year-old coconut farmer on the tiny island of Inampulugan in the Southern Philippines.

Masa:"You know, the coconut... The wood is being used as lumber, the shell is used charcoal. The husk is being used as furniture."

Margolis:Inampalugan is a typical Philippine island: three-quarters of it is blanketed by coconut trees. Young boys and men climb the trees barefoot, about 75 feet up, to pick the ripened fruits.

Climbing a 80-foot coconut tree. Barefoot.

In preparation for the new biofuels legal requirement, farmers like Masa have been increasing their coconut harvest recently. Masa points to the piles of busted open coconut shells covering the ground. And then he shows me the stacks of freshly-harvested white coconut meat.

Removing the meat from the coconut. This is where coconut oil comes from.

Masa: "Rooster "These are the dried cocomeat. These have been extracted from the cocoshell. And then we extract the oil from this meat."
Margolis: So this right here could power my car? Help power my car?
Masa:"Oh yes, yes, yes..."

Margolis: Well, it's not quite that simple. You can't just split open a coconut, pour the oil in your fuel tank and go. The coconut oil first gets sent several hundred miles north to a processing plant in Manila.

Lau: "What you see here is the loading bay, where we unload the coconut oil. From here, it goes straight to the oil companies for blending into diesel fuel."

Margolis: Jun Lau is the chief operating officer for Chemrez Technologies, the only factory in the Philippines currently capable of converting coconut oil into a biofuel. Lau points at several large tanks, pipes and tubes, as he explains the basic chemical conversion process.

A day's labor removing coconut meat.

Lau: "You put the coconut oil into the reactor and blend it with methanol. You take away the part of the coconut oil that would damage a car's engine, and that is the normally the glycerin part. Every type of vegetable oil, they have a glycerin componet. So we take out the bad and only put in the good."

Margolis: Once that's done, the oil companies create a blend one percent refined coconut oil and 99% diesel. It's called cocobiodiesel. In a couple of years, the new Filipino law requires the blend to be 2% coconut oil.

Studies suggest that a 5% coconut blend provides optimal fuel efficiency. After that too much coconut oil begins to dilute the power of diesel fuel. Lau says what the coconut oil does is help the cars run smoother.

Lau: "When you put cocobiodisel into a vehicle, you get a cleaning effect. It can actually work like a detergent to clean out all the carbon deposits, all the sludge, all the carbon buildup, you effectively have it melted away. So you do two things: you clean and lubricate. And effectively bring a car to its designed operating efficiency."

Margolis: And when a car runs more efficiently it emits less pollutants and requires less fuel; this cuts down on oil consumption and ultimately greenhouse gasses.

Coconut oil can be added to any vehicle that runs on diesel fuel. The improved engine efficiency depends on the car. For a brand new car, it's nothing to write home about.

A skeptical-looking driver eyes some refined coconut oil, dyed green, that should make his engine run smoother.

Galinda: "Maybe you don't see much improvement in fuel efficiency. Maybe you'll see an improvement of 2-3 percent."

Margolis: Dodo Galinda is known in the Philippines as "The Father of Biodiesel" for his pioneering work studying coconut oil. He says cocobiodiesel might not be that useful in the United States or Western Europe. But it's well suited for places like the Philippines, where the streets are filled with old Japanese and Korean discards.

Pouring coconut oil into the tank.

Galinda: "And therefore you may be able to see an improvement in efficiency as high, maybe as 15 or 20 percent. Very significant. 90 percent of the engines are not brand new, they are probably beyond five years of age. So they are mostly inefficient."

Margolis: I'm standing in downtown Manila, on a busy intersection and trucks and jeepneys, which are the local buses go rumbling by, and taxi after taxi, which are motorcycles with sidecars. And each vehcicle that passes, you can actually see the black exhaust coming out the back. Most of these vehicles out here look like they've been on the road for 10, 20, or 30 years. Even after standing out here for 30 minutes or so, you can actually taste the exhaust and pollution. It starts to gather on the tip of your tongue.

One of the Philippines famous, brightly-colored "Jeepneys."

But what's the best way to clean all this up? Which biofuel burns cleanest? And which one gives the most bang for the buck? For example, how do coconuts compare with the biofuel of choice in the United States: corn? Alex Farrell is an assistant professor at the University of California Berkeley's Energy and Resources Group.

Farrell: "It takes less energy to produce coconuts traditionally then than the energy that goes into corn. The way we make ethanol from corn in the US is rather energy intensive. We use a lot a lot of natural gas to make fertizlier, we use a lot of energy in preparing the fields, raising the crops. And so all of that takes a fair bit of energy."

Margolis: In other words: coconuts compare favorably. Some studies say the greenhouse gas reductions from cocobiodiesel is three times greater than corn ethanol.

But this isn't exactly comparing apples to apples. Most of the cars in the Philippines run on diesel. In the U.S., it's gasoline. Also, cocobiodiesel still requires at least 95% diesel fuel. The corn ethanol blend called E-85 runs on only 15% petroleum. So, that's a much greater reduction in oil consumption.
In short: right now, there's no clear answer what biofuel to use. Farrell says there are other mitigating factors that also need consideration.

Farrell: "In developing countries, the people who might grow coconut they have to decide, well do we make crops for energy or do we make crops for food?"

Margolis: But in the islands of the Southern Philippines, where coconuts trees flourish, coconuts used for fuel is welcome news. Farmer Rudulpho Masa says the price he can get for his coconut meat, called Copra, is already climbing in recent days.

Masa: "Our copra, we sold the corpra now at 15 pesos per kilo."
Margolis: And what was it before?
Masa: "It was at 12."
Margolis: Oh, so that's 25%.
Masa: "Yea, So that's an improvement."

Margolis: But Filipino farmers probably won't turn into Saudi princes sitting on the world's next great energy reserves. The Philippines is the only country heavily investing in coconut fuel. In neighbouring Indonesia and Malaysia it's palm oil. In Europe, their using rapeseed and sunflower. So, ultimately, which biofuel we put in our engines may be determined not by what works best, but by what crops can be most easily attained.