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ANALYSIS of the CHARCOAL VALUE CHAIN in ILOILO CITY (Final Report)

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ANALYSIS of the CHARCOAL VALUE CHAIN in ILOILO CITY (Final Report) ANALYSIS OF THE CHARCOAL VALUE CHAIN IN ILOILO CITY (Final Report) BUILDING LOW EMISSION ALTERNATIVES TO DEVELOP ECONOMIC RESILIENCE AND SUSTAINABILITY PROJECT (B-LEADERS) September 2017 This document was produced for review by the United States Agency for International Development (USAID). It was prepared by the Building Low Emission Alternatives to Develop Economic Resilience and Sustainability (B- LEADERS) Project implemented by RTI International for USAID Philippines. ANALYSIS OF THE CHARCOAL VALUE CHAIN IN ILOILO CITY (Final Report) BUILDING LOW EMISSION ALTERNATIVES TO DEVELOP ECONOMIC RESILIENCE AND SUSTAINABILITY PROJECT (B-LEADERS) September 2017 DISCLAIMER The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government. TABLE OF CONTENTS TABLE OF CONTENTS ··································································· I LIST OF TABLES ········································································ III LIST OF FIGURES ······································································ III ACRONYMS ················································································ IV EXECUTIVE SUMMARY ································································· 1 I. INTRODUCTION ································································ 4 1.1. Objectives ............................................................................................................ 6 1.2. Scope and Limitations ........................................................................................ 6 II. METHODOLOGY ································································ 8 2.1. Study Site .............................................................................................................. 8 2.2. Sampling Requirements .................................................................................. 11 2.3. Value Chain and Data Collection .................................................................. 11 2.3.1 Iloilo City Energy Consumption................................................. 13 2.3.2 Overall CVC Survey ..................................................................... 14 2.3.3 Charcoal Production Survey ........................................................ 14 III. RESULTS AND DISCUSSION ··············································· 15 3.1 Charcoal Making Process .......................................................................... 15 3.1.1 Charcoal Usage and Forest Conversion .................................... 15 3.1.2 Tree Species Used ......................................................................... 15 3.1.3 Technologies .................................................................................. 16 3.1.4 Production Process ...................................................................... 17 3.2 Value Chain ....................................................................................................... 17 3.2.1 Wood Production ......................................................................... 18 ANALYSIS OF THE CHARCOAL VALUE CHAIN IN ILOILO CITY i 3.2.2 Carbonization and Packaging ...................................................... 19 3.2.3 Transport and Trading ................................................................. 19 IV. CONCLUSION AND RECOMMENDATIONS ·························· 21 V. REFERENCES ··································································· 22 VI. ANNEXES ········································································· 23 ANNEX A. Survey Questionnaire ........................................................................ 24 ANNEX B. Supporters and Respondents............................................................ 30 ANNEX C. Photos .................................................................................................. 32 ANALYSIS OF THE CHARCOAL VALUE CHAIN IN ILOILO CITY ii LIST OF TABLES Table 1. Stakeholders and Data Collection along the Charcoal Value Chain ......................................... 12 Table 2. Energy Consumption of the City of Iloilo per Fuel Source ....................................................... 14 Table 3. Annual Usage of Charcoal in Iloilo City and Associated Forest Conversion .......................... 15 Table 4. Tree Species Used in Charcoal Production in Iloilo and Guimaras .......................................... 16 LIST OF FIGURES Figure 1. Location Map of the Province of Iloilo ........................................................................................ 9 Figure 2. Location Map of the Province of Guimaras .............................................................................. 10 Figure 3. Elements of the Charcoal Value Chain (process in reverse).................................................... 11 Figure 4. Methods in Charcoal Production ................................................................................................. 17 Figure 5. Market Flow of Charcoal .............................................................................................................. 18 ANALYSIS OF THE CHARCOAL VALUE CHAIN IN ILOILO CITY iii ACRONYMS B-LEADERS Building Low Emission Alternatives to Develop Economic Resilience and Sustainability Project CDI Cities Development Initiative CVC Charcoal Value Chain DAO Department Administrative Order DENR Department of Environment and Natural Resources DENR-PENRO Department of Environment and Natural Resources- Provincial Environment and Natural Resources Office/Officer DENR-CENRO Department of Environment and Natural Resources- Community Environment and Natural Resources Office/Officer FUU Forest Utilization Unit GCFFMPAI Guimaras Charcoal, Fuelwood, Firewood Maker/Producer Association, Inc. GHG Greenhouse Gas LEDS Low Emission Development Strategies LGU Local Government Unit LPG Liquefied Petroleum Gas USA University of San Agustin USAID United States Agency for International Development ANALYSIS OF THE CHARCOAL VALUE CHAIN IN ILOILO CITY iv EXECUTIVE SUMMARY Charcoal is an important commodity both in the rural and urban areas in the Philippines. In Iloilo City, charcoal plays a very important role as fuel used for cooking and grilling in households and some commercial establishments. It is a source of income for people with meager income especially those in far flung barangays in the Province of Iloilo and Guimaras. Most households in the city use charcoal for cooking, while others also use Liquefied Petroleum Gas (LPG). Most low-income households use charcoal packed in small quantities that are sold in sari-sari (variety) stores or in the district markets. Though high-income households use either LPG or electricity for cooking, they also use charcoal for grilling. The City of Iloilo is a fast growing city in the Philippines. It has been known to be the country’s home of grilled delicacies. Hence, the practice of grilling is common in different commercial establishments and even in small businesses along the city streets. The first Mang Inasal chain restaurant was established in the city, with now a total of 15 outlets in the six districts of Iloilo City. Luzon-based restaurants such as Andoks and Baliwag and Ramboys Grill of Numancia, Aklan have also established their branches in the city. Meanwhile, other small players are still ubiquitous in the city. Government regulations such as Department of Environment and Natural Resources (DENR) Administrative Order (DAO) No. 79, DAO No. 07 and DAO 99-20 are strictly being implemented by DENR’s Provincial Environment and Natural Resources Offices (PENROs) to regulate the cutting of trees for charcoal production and issue permits to transport the charcoal products. But because of the increasing demand of households in Iloilo City, charcoal transporters, who act as agents still deliver sacks of charcoal from different locations to the city after complying all the requirements of DENR- PENRO. Furthermore, there has not been enough policies at the local government unit (LGU) level that regulate how charcoal is being produced, transported and sold. Hence, the need to develop a baseline Charcoal Value Chain (CVC) study. Information gathered in the Iloilo City energy consumption survey were used to identify the main charcoal markets in the City of Iloilo. These are the retail and wholesale markets located in the six districts of Iloilo City, namely, Arevalo, City Proper, Jaro, La Paz, Mandurriao, and Molo; including charcoal production sites in Iloilo Province and Guimaras Province. These sites were visited to observe how charcoal is transported. The survey questions focused on prices, value-adding activities at that level, and costs incurred. The data were then analyzed to indicate profitability levels along the chain. To determine the volume of charcoal production from the source, the size of active charcoal ANALYSIS OF THE CHARCOAL VALUE CHAIN IN ILOILO CITY 1 sites was measured and the technology used was recorded (from the preparation, carbonization to packing, the time and the number of sacks of charcoal produced). The species of trees used in charcoal production were also gathered and recorded from the different charcoal sources in Provinces of Iloilo and Guimaras. Based on the preceding two surveys on energy consumption and charcoal value chain, the main charcoal producing areas were identified. A total of 13 municipalities in the Province of Iloilo and five municipalities in the Province of Guimaras are
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