Malaysia urged to force big oil to produce biofuel

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 crude oil prices rocketed last year, Malaysia and Indonesia, which produce most of the world’s palm oil, 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 industry.
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 oil companies 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 logistical problems, oil companies were not ready to act, either.

AFP