• Malaysia’s Kulim Bhd is setting up a MYR152-million (US$40.2-million) joint venture with German manufacturer CremerOleo to build and operate two biodiesel plants in Tanjung Langsat and Jurong, each with an initial capacity of 100,000 tonnes per year. The plants are expected to start production in 2007.

  The Kulim-CremerOleo biodiesel is initially destined for the export market, but the partners are also eyeing domestic markets as well. The two plants will also produce downstream speciality chemical derivatives.

  “Oleochemicals and methyl esters are very versatile products that can be reconstituted to produce numerous other chemical derivatives. The types of derivatives to produce would very much depend on the prevailing market at a particular time,” [Kulim managing director] Ahamad [Mohamad]says.

  “We are expecting demand for oleochemical products to increase, especially against the backdrop of high crude oil prices. This is forcing the producers of consumer products such as soaps, detergents, processed food and pharmaceuticals to switch from using petrochemical to oleochemicals,” he says.

• Rubiatec Bhd, a subsidiary of Golden Hope Plantations Bhd. will jointly build a biodiesel plant with the Malaysian Palm Oil Board. The government-owned Malaysian Palm Oil Board will construct the biodiesel plant, while Rubiatec will build supporting buildings, infrastructure and other facilities necessary for the operation of the plant.

  “The project forms a base for Golden Hope, through Rubiatec, to position itself as a leader in the production of sustainable energy; it is also synergistic to its core business of plantations,” Golden Hope said in a statement to the local stock exchange.

  MPOB also signed MoUs for biodiesel plant each with two other companies, Kumpulan Fima Bhd and Carotina Sdn Bhd.

  These three will be the first three biodiesel plants in the country, each with an annual production capacity of 60,000 tonnes. They were expected to be ready between 2006 and early 2007.

  Golden Hope said it would construct another biodiesel production plant facility on its own at Golden Hope Bioganic Sdn Bhd, also in Banting, with an annual production capacity of 30,000 tonnes.

  The group already has plans to invest MYR151 million (US$39.9 million) to develop a biodiesel plant in the Netherlands, with a production capacity of 150,000 tonnes annually.

• Separately, Golden Hope announced plans for a fourth biodiesel plant, a MYR100-million ($26.5-million) plant in eastern Sarawak state that will produce around 150,000 tonnes of fuel a year. The plant may be Golden Hope’s biggest in Malaysia.

• Plantation and property firm IOI Corp. Bhd. plans to set up a MYR100-million ($26.5-million) biodiesel plant with a capacity of at least 150,000 tons a year. The company is still working out details such as location and when the plant will start operating.

  The company has said earlier it will build its first biodiesel plant on its own, either in the Netherlands or in Pasir Gudang, in southern Johor state, to capitalize on the green fuel's growing global potential.

• Malaysia and South Korea signed a Memorandum of Understanding (MoU) for collaboration in research and development (R&D) relating to biofuels, particularly those based on palm oil.

  The director general of Malaysian Palm Oil Board (MPOB), Tan Sri Dr Yusof Basiron, said under the deal both parties will explore specific R&D projects that will enhance the use of palm-oil based biodiesel in Korea.

  Another MoU was also signed between Ecosolution Co. Ltd Korea and POIC Sabah Sdn Bhd towards joint ventures in the production of biodiesel.

• A public listed company is expected to invest about RM260 million (US$68.8 million) in what would be Perak’s first biomass project that would see the production of palm-oil-based biomass.

  Menteri Besar Datuk Seri Tajol Rosli Ghazali, who declined to reveal the name of the company, said that the state government was prepared to offer incentives to the company which expected to produce paper from the pulp and trunks of palm oil as well as biodiesel from crude palm oil.

Malaysia produced 15 million tonnes of crude palm oil last year. The country is preparing regulations for a mandatory internal switch to biofuel blends by 2008, including drafting a bio-fuel act that would make it mandatory to make the switch.

However, the increase in palm-oil production for biodiesel will aggravate already heightened tensions between the palm-oil industry and environmental groups which accuse the industry of destroying the rainforest and annihilating orangutans.

Rising demand for green energy has led to a surge in the international price of palm oil, with potentially damaging consequences. “The expansion of palm oil production is one of the leading causes of rainforest destruction in south-east Asia. It is one of the most environmentally damaging commodities on the planet,” says Simon Counsell, director of the UK-based Rainforest Foundation. “Once again it appears we are trying to solve our environmental problems by dumping them in developing countries, where they have devastating effects on local people.” (New Scientist)

Not surprisingly, the palm oil industry disputes that accusation. The Borneo Orangutan Survival Foundation reports that during a November meeting of the Roundtable on Sustainable Palm Oil (a forum established by the palm oil industry), the organization voted to adopt a set of 8 principles and 39 criteria for sustainable palm oil that had been prepared over the last year by ProForest, a UK-based NGO specialized in standardization.