A new report published report by SOPAC, the South Pacific Applied Geoscience Commission, formed by Australia, New Zealand and 18 Pacific island countries and territories, states that if Pacific island countries were to replace 50% of diesel imports with coconut oil, the region’s import bill would be reduced by 10%.
The report explains that Fiji, Papua New Guinea, the Solomon Islands, Samoa, Vanuatu, the Federated States of Micronesia, Tonga, Kiribati, the Cook Islands, the Marshall Islands and Palau spend more than US$800 million a year on fuel imports, and that in half of these countries fuel imports account for more than 25% of total imports.
‘Given the expected continuing rise in fuel prices and the increasing demand for energy supplies, without any indigenous fuel substitutes, Pacific island countries’ balance of payments can be expected to further deteriorate.’
To combat the problem many Pacific island nations are now using coconut oil to make biofuel, with electricity companies in Vanuatu, Fiji and Samoa already testing blends of coconut oil and diesel to run power generators.
The SOPAC report warns, however, that though the use of coconut oil can cut fuel import bills, Pacific island countries must consider possible revenue loss from import taxes and customs duties.
‘[Our study] suggests that that some duty on locally grown biofuels will be required to offset this loss … Import substitution can have a positive impact on government revenues if both impact on trade balance, duties and taxes are taken into account.’