THE government has issued 60 biodiesel manufacturing licences as at end-February 2011 but only less than one fifth has started production.
Biodiesel (B5) in Malaysia is a blend of 5 per cent palm methyl ester and regular diesel.
According to the Malaysian Palm Oil Board (MPOB) data, only 10 biodiesel plants were operating last year, despite some 29 biodiesel plants having been established with total production capacity of 3.37 million tonnes per year.
"These plants were operating on and off, with three or four plants operating each month, due to the lack of demand for biodiesel exports and high palm oil prices in the second half of 2010," MPOB director general Datuk Dr Choo Yuen May said in her keynote address at the BioWise 2011 conference in Kuala Lumpur yesterday.
BioWise 2011 is Asia Pacific's gathering of professionals from the sustainable fuel and biotechnology industry. The event ends tomorrow.
According to MPOB, last year's biodiesel exports fell more than 50 per cent in both quantity and earnings, from 2009. The biodiesel plants produced 117,173 tonnes of palm biodiesel, with only 89,609 tonnes exported, bringing in RM266.53 million in earnings for the year.
The country's biodiesel production will be more than enough to cater for the needs of the central region of Peninsular Malaysia, once the mandatory use of palm biodiesel (B5 programme) is implemented come June 2011.
Under the programme, all diesel pumps in five states - Selangor, Kuala Lumpur, Putrajaya, Negri Sembilan and Malacca - will be replaced with B5 pumps in stages, beginning June 2011. MPOB clarified that the five states will need only 200,000 tonnes of biodiesel per year to be implemented. This is about 40 per cent of the 500,000 tonnes per year of biodiesel required for nationwide implementation.
In a move to promote the usage of biodiesel, the government has committed to funding the price differential between diesel and biodiesel through Automatic Pricing Mechanism. It was reported that subsidies could run between 5 sen and 7 sen per litre.
There have been doubts on whether the government would continue with the implementation of the B5 programme come June 2011, due to the high price of crude palm oil.
Choo reiterated that the government will implement the B5 programme in the central region as planned, adding that all parties are working towards the implementation.
Source: