Malaysia aspires to manufacture one million tonnes of palm oil-based biodiesel next year to take advantage of strong worldwide demand for the green oil.  This is more than a seven-fold increase.

Five biodiesel companies in Malaysia currently make a combined total of 140,000 tonnes a year, which are mainly exported.

The companies are Golden Hope Plantations Bhd, Carotino Sdn Bhd, Ganz Biofuel Sdn Bhd, Malaysia Vegetable Refinery Sdn Bhd and Vance Bioenergy Sdn Bhd.

Plantation Industries and Commodities Minister Datuk Peter Chin Fah Kui said the Government had approved 75 licences for biodiesel manufacturers, with total investments of over RM7 billion.

Chin said it is estimated that a total of 8.6 million tonnes of palm oil will be consumed annually once the 75 projects take off.

"Out of the RM7 billion, RM4.8 billion (69 per cent) are domestic investments while RM2.1 billion (31 per cent) are foreign investments such as from Australia, Singapore, the US, India, Italy and Japan," he said at the International Biofuel and Alternative Energy Conference 2006.

"The feedstock is mainly in the form of processed palm oil with around 5.1 million tonnes consumption per year. For 2007, eight companies are set to start production with 1.5 million tonnes of capacity of biodiesel," he added.

Malaysian Palm Oil Association (MPOA) chairman Datuk Sabri Ahmad, said the biofuel demand in Europe and the United States was expanding rapidly in line with the requirement for more environmentally friendly energy.

Sabri said by 2012, Europe would require 10 million tonnes of biodiesel compared to four million tonnes currently.

Plantation Industries and Commodities Ministry's Parliamentary Secretary Senator Datuk Dr S. Vijayaratnam said in line with the robust demand for biofuel, Malaysia would step up efforts to increase production and efficiency yield in plantation crop.

"We will not focus on increasing land hectarage but on increasing the yield or efficiency level by engaging in research and development, and utilising high quality seeds to produce better crop," he said.

"We target an oil extraction rate of 25 percent and a production yield of 35 tonnes per hectare per year," he added.

He also said that criticisms that Malaysian palm oil plantations were adversely affecting the environment and the orang utan habitat were baseless. Most of the oil palm plantations were located on former rubber estates or plantations of other crops which switched to oil palm as it was more commercially profitable.

He added that in the case of Indonesia, the oil palm plantations were located on land formerly used for logging. THE END.