Malaysia urged to force big oil to produce biofuel

Mar 12, 2009
An oil palm plantation covers a swath of land where a forest once stood in the Miri interior, eastern Malaysian Borneo state of Sarawak in 2007. Malaysia must force major oil firms to produce biofuel if the once-vaunted biodiesel industry is to have any future, industry experts told a conference Thursday.

Malaysia must force major oil firms to produce biofuel if the once-vaunted biodiesel industry is to have any future, industry experts told a conference Thursday.

When prices rocketed last year, Malaysia and Indonesia, which produce most of the world's , heavily promoted their version of biofuel -- a mixture of diesel with five percent processed palm oil.

But the industry's fortunes waned when the price of crude oil tumbled, triggering a crash in the palm oil price which made supply uncertain and jeopardised the long-term contracts needed to develop the biofuel .

Malaysia already requires government diesel vehicles to use biofuel, with privately owned diesel vehicles compelled to make the shift by next February.

But M.R. Chandran, an adviser to the Roundtable on Sustainable Palm Oil, told an industry conference this week that the measures did not go far enough.

"The government has to get their own national corporations like Petronas and other here like Shell and Esso mandated and say, 'look chaps, here is the 5.0 percent blend and you have to do it and that is it and get it done,'" he said.

"That's the only way to save the biofuel industry here."

However, Plantations Minister Peter Chin told the conference that while Malaysia was unable to roll out its ambitious biodiesel programme because of , oil companies were not ready to act, either.

"Our is not ready. Petronas is not 100 percent ready. Neither is Shell and Esso," he said.

"We intend to do it but at the same time we have to get our logistics right. There are certain (geographical) constraints which we must acknowledge," he said, referring to problems in transporting biodiesel.

Chandran said that out of the 92 government licences issued for palm oil plants in 2006, only 16 were built and most were not operating due to the low prices.

"If Indonesia and Malaysia want to see a fair demand for palm oil and avoid all this fluctuation in prices, you have to create domestic demand," he said.

Indonesia's state oil company Pertamina has been ordered to sell fuel with at least a one percent biofuel content and this is expected to rise to five percent by 2025.

Crude palm oil prices plummeted from a peak of 4,312 ringgit (1,168 dollars) per tonne a year ago to a low of 1,390 ringgit in October last year. Prices have recovered to 2,047 ringgit per tonne currently.

Chin said Malaysia was comfortable with current prices and did not expect a rally in the near future.

(c) 2009 AFP

Explore further: Old timey car to replace NYC horse carriages shown

add to favorites email to friend print save as pdf

Related Stories

Alarm over fate of world's orangutans

Mar 26, 2007

A U.N. report details grave danger to the world's population of orangutans due to a booming palm oil industry in Malaysia and Indonesia.

Biofuels and biodiversity don't mix, ecologists warn

Jul 09, 2008

Rising demand for palm oil will decimate biodiversity unless producers and politicians can work together to preserve as much remaining natural forest as possible, ecologists have warned. A new study of the potential ecological ...

Palm oil putting orangutans at risk

Oct 22, 2007

Conservationists meeting at the Brookfield Zoo near Chicago say growing demand for palm oil is putting Sumatran orangutans at risk of extinction.

Palm oil demand puts orangutans at risk

Aug 15, 2007

The growing demand for bio-diesel fuel threatens the survival of the orangutans of Borneo, the largest surviving population of the primate in the wild.

Waste coffee grounds offer new source of biodiesel fuel

Dec 10, 2008

Researchers in Nevada are reporting that waste coffee grounds can provide a cheap, abundant, and environmentally friendly source of biodiesel fuel for powering cars and trucks. Their study has been published ...

Recommended for you

Obama launches measures to support solar energy in US

Apr 17, 2014

The White House Thursday announced a series of measures aimed at increasing solar energy production in the United States, particularly by encouraging the installation of solar panels in public spaces.

Tailored approach key to cookstove uptake

Apr 17, 2014

Worldwide, programs aiming to give safe, efficient cooking stoves to people in developing countries haven't had complete success—and local research has looked into why.

User comments : 0

More news stories

Researchers uncover likely creator of Bitcoin

The primary author of the celebrated Bitcoin paper, and therefore probable creator of Bitcoin, is most likely Nick Szabo, a blogger and former George Washington University law professor, according to students ...

LinkedIn membership hits 300 million

The career-focused social network LinkedIn announced Friday it has 300 million members, with more than half the total outside the United States.

Impact glass stores biodata for millions of years

( —Bits of plant life encapsulated in molten glass by asteroid and comet impacts millions of years ago give geologists information about climate and life forms on the ancient Earth. Scientists ...