7 Dezember 2004

Palm diesel close to commercial reality in Malaysia

From cooking oil to biofuel: Malaysia is close to making palm diesel a commercial reality

Palm diesel could soon be available in petrol stations for as low as 85 sen a litre, just two sen more than the pump price of diesel. (annotation of the nova editorial office: 1€ =5,11 Ringgit (RM), 1$= 3,8o RM, 1RM= 100 sen).

However, to make the biofuel attractive to consumers, the Government would have to stop subsidising diesel, which is sold for 83 sen a litre now, Plantation Industries and Commodities Minister Datuk Peter Chin Fah Kui said. The Cabinet committee studying the Government’s fuel subsidies would make a decision at its next meeting, he said.

Subsidies for diesel and petrol cost the Government RM9 billion a year. Average crude oil prices have held at about US$ 41 (RM155) a barrel this year, the highest in 21 years. Crude oil hit a record US$ 55.67 a barrel in October, but has since eased to about US$ 45.

Palm diesel has long been proposed as a renewable source of energy, an alternative to the world’s depleting reserves of fossil fuels. Chin said the ministry was preparing a report on the commercial production of palm diesel for the Cabinet committee.

Pricing was a major issue as the current price of petroleum diesel would be too close to the price of the palm diesel, he said. “When crude palm oil (CPO) is converted into palm diesel, it costs about two sen more per litre than diesel.” The cost of producing palm diesel included refining and distribution costs, he said.

The report will also look into the legal framework and availability of palm oil. “On production cost, palm oil is 40 per cent cheaper than other biofuel sources,” he said. Sources said plans were already being drawn up to get petroleum companies’ co-operation to place palm diesel pumps in their stations. Representatives from petroleum companies were expected to give their views at a seminar next week, they said.

Chin said there had already been interest in commercial production. A Klang Valley company had even proposed to build a plant in Negri Sembilan to produce biofuel for export to Europe, he said.

“We would be happy to allow the company to do so as long as it does not disrupt supply to the traditional industrial users,” he said. The technology to convert CPO into palm diesel was developed by the Malaysia Palm Oil Board in the 1980s. The fuel is less polluting.

Source: The National Non-Food Crops Centre, news 2004-12-04.

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