Panama takes a firm step towards biofuels with the return of the E10 mix in gasoline. The Cabinet Council has approved Bill 24-25, which introduces changes to Law 42 of 2011 to reactivate the use of bioethanol as an oxygenating additive throughout the country.
The initiative comes after a consensus process with the industry, oil companies and the agricultural sector, and incorporates a specific tax scheme: Fuel containing anhydrous bioethanol will pay an approved tax of $0,60 per gallon.
What changes with the new regulation
The measure establishes the obligation to incorporate anhydrous bioethanol as an oxygenating additive in gasoline, with a proportion of 10% in the mix. This requirement will be applied in accordance with the law and the regulations that implement it, ensuring its implementation at all stations in the country.
The authority in charge of its deployment will be the National Energy Secretariat (SNE), which will assume the mission of designing and implementing strategic programs and plans to promote biofuels on a national scale.
Furthermore, the regulations open the door to the use of other compatible biofuels for the purpose of the law, including the hydrated bioethanol, provided that the appropriate technical and regulatory conditions are established.
Among the key technical functions, the SNE will set the percentages, proportions and volumes of mixing, in order to organize its marketing, distribution and use throughout the country, offering a stable framework for the market.
On the economic level, the decision to standardize the tax on blended fuel in $0,60 per gallon seeks to simplify the tax system and provide certainty to the agents in the chain.
Who does what: competencies and coordination
The SNE will promote the implementation of technological studies and actions to develop the production and promotion of biofuels. This mandate includes the promotion of the generation and cogeneration of electricity from biomass, as part of an energy diversification strategy.
In coordination with the Ministry of Agricultural Development (MIDA) and the Ministry of Economy and Finance (MEF), work will be done on the tax legislation and the economic instruments needed to encourage crops, agroindustry, and the use of biofuels, as well as biomass generation and/or cogeneration.
The technical roadmap will be completed together with the General Directorate of Standards and Industrial Technology of the MICI, with the preparation and updating of technical regulations that cover the entire chain: production, mixing, marketing and use.
The institutional design aims to support an orderly implementation of the E10, with clear rules for the sector and a standards ecosystem that ensure quality and security in supply.
With this framework, Panama aims to strengthen its biofuels policy, diversify the energy matrix and generate opportunities for the agricultural and industrial sector, without losing sight of the necessary coordination between public and private actors.
- The SNE will define the mixing parameters and their control in the distribution and sale.
- Studies and pilot projects will be promoted on biofuel production and biomass.
- MIDA and MEF will articulate incentives for crops and agroindustry linked to bioethanol.
- The MICI will update regulations for the production and marketing of these fuels.
The activation of the 10% bioethanol blend comes after a broad political-technical agreement and is supported by a single tax scheme for blended fuel, with the aim of facilitating its adoption by the market.
Beyond the regulatory milestone, the deployment will require schedules, supply capacity and a correct calibration of percentages and standards, aspects that fall to the SNE and the standardization bodies for their medium-term success.
The regulatory package, supported by the Cabinet Council, specifies the reactivation of 10% bioethanol as state policy and defines responsibilities so that the value chain operates with legal certainty and predictability.
With the approval of Project 24-25, the E10 blend returns to the scene: unified tax, clear responsibilities for the SNE and coordination with MIDA, MEF and MICI to align incentives, technical standards and market operations, creating a comprehensive framework for its implementation.
