|Cumulative Biodiesel Capacity in Malaysia. Click to enlarge.|
Business Times. The government of Malaysia has issued a temporary freeze on the new biodiesel licenses due to the “overwhelming” number of applications for the construction of new biodiesel plants in the country.
The Cabinet Committee on the Competitiveness of the Palm Oil Industry announced on 29 June that it will stop issuing new biodiesel manufacturing licences with immediate effect.
Plantation Industries and Commodities Minister Datuk Peter Chin Fah Kui said in a statement that the temporary freeze was brought on by rising concerns that the sudden hunger for biodiesel projects may eat into the portion of crude palm oil (CPO) reserves that are meant for food and oleochemical producers.
“Licence issuing will cease pending the completion of a comprehensive review of all palm oil-based downstream industries,” the statement said.
When asked to comment on the Government’s recent move, Malaysian Palm Oil Council (MPOC) chief executive officer Tan Sri Dr Yusof Basiron said: “In any industry, there must be a realistic level. There must be a balance between CPO for food and that for fuel.”
Malaysia is the world‘s largest producer of crude palm oil. The government, which has been promoting has been promoting palm oil-based biodiesel as a new source of growth for the economy, has so far approved 32 biodiesel projects with a combined production capacity of about 3 million tonnes (about 906 million gallons US).
The sudden and keen investment sentiment from the private sector is being fueled by the Government’s plan to create an assured local market through the Biofuel Bill due to be tabled before Parliament this month, according to Yusef.
Separately, Indonesian Energy and Mineral Resources minister Purnomo Yusgiantoro told a parliamentary hearing that Indonesia plans to build 11 biodiesel plants due to come onstream in 2007 to produce 26,000 tonnes of the fuel per year.
President Susilo Bambang Yudhoyono on Sunday ordered his government to increase production and promote the use of biofuels. He asked ministers to develop plans to significantly increase their use of biofuels, derived from plants such as coconuts, sugarcane and castor oil, by 2010. (AFP)
The government estimates that Indonesian biodiesel production could reach 187 million liters (49 million gallons US) by the end of 2007, rising to 377 million liters (100 million gallons US) in 2008 and 1,337 million liters (353 million gallons US) in 2010.
Indonesia, a member of the Organization of Petroleum Exporting Countries (OPEC) has become a net oil importer. (Earlier post.)