Malaysia to review biodiesel licences

Malaysia to review biodiesel licences
The Brunei Times - Bandar,Brunei,Brunei Darussalam
MALAYSIA plans to complete a review of its biodiesel licensing policy by early next year, Commodities Minister Peter Chin says. ...

MALAYSIA plans to complete a review of its biodiesel licensing policy by early next year, Commodities Minister Peter Chin says.

``We are reviewing the whole way in which licences are being given, the way people have got licences, whether they are operating, and whether they are proceeding,'' Mr Chin said.

Biodiesel producers would need to look at the cost of production and competitiveness against other fossil fuels and palm oil, he said.

Malaysia would be able to produce 300,000 tonnes of biodiesel in 2007. A total of 5.2 million tonnes has been approved by the government.

Palm oil is made into bio-diesel, which competes with crude oil to make fuels for cars, power plants and factories.

Palm oil is traditionally used in food and cosmetics, but rising biofuel demand has sent palm oil prices surging by 12 per cent this year.

Malaysia plans to sell palm-blended diesel at domestic pumps by the end of this year and, along with Indonesia, has set aside 40 per cent of palm oil output for biodiesel production.

Malaysia and Indonesia are the biggest palm oil producers.

The minister said Malaysia hoped to produce about 16 million tonnes of palm oil in calendar year 2007, up from an estimated 15.2 million in 2006.

Mr Chin said he was hopeful that India's imports of palm oil would increase with reduced duties on palm products. India reduced import duties on crude palm oil and palmolein in August to 70per cent.

India consumes about 11 million tonnes of edible oil a year and palm oil constitutes 40per cent of India's edible oil imports of more than four million tonnes.

India imports palm oil from Malaysia and Indonesia and soy oil from Argentina and Brazil.

Asked if there would be further cuts in duties, Mr Chin said: ``There is a possibility. The gap with soy oil will get narrower.''

He said Malaysia has been impressing upon India that custom duties on palm and soy oils should be at levels at which the two could compete.

Mr Chin said he expected good demand for palm oil from China, which is the traditional buyer along with India, Pakistan and Europe.

Malaysia was committed to maintaining palm oil supplies to traditional buyers despite higher allocation for biodiesel, he said.

``Demand from China is good, it will be going up because many companies are doing joint business and joint ventures with them (Chinese companies),'' he said.

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