9/30/2004 MANILA (Dow Jones)--The Philippines hopes to start exportingcoconut-based biodiesel to Japan next year, to meet demand for moreenvironmentally friendly fuels for automobiles, a senior official from theDepartment of Agriculture said Wednesday.

He said Japan needs around 2.5 billion liters a year of the biofuel, whichwill be a 5% blend with regular diesel.

Philippine Coconut Authority, or PCA, administrator Danilo Coronacion saida Japanese delegation will arrive in the country Friday to finalizedetails of the export program.

Coronacion said three local companies, namely Chemrez Inc., SendelChemicals and RI Chemicals, are producing a total of around 33 millionliters of coconut biodiesel.

"But they said they can double their output if needed and they can furtherincrease output by upgrading their facilities," Coronacion told Dow JonesNewswires.

According to Coronacion, the city of Tokyo alone needs around 600 millionliters a year of the 5% blend

He said Japan appears eager to implement a 5% blend of biodiesel in itsdiesel-fired engines starting next year.

"I think they want to demonstrate that they can implement the KyotoProtocol," he said.

Under the Kyoto Protocol, developed nations have agreed to reduce theirgreenhouse gas emissions relatives to levels emitted in 1990.

The coconut-based biofuel is expected to significantly improve mileage andreduce harmful gas emissions.

The Philippines is the world's largest exporter of coconut oil and othercoconut-based products.