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Malaysia To Build Three Biodiesel Plants Fueled By Palm Oil

Malaysia said Sept. 26 it will build three plants to produce biodiesel from palm oil, as part of efforts to reduce its dependency on petroleum as oil prices continue to soar on the world market.

"Palm biodiesel is set to become a viable alternative to petroleum diesel," Plantation Industries and Commodities Minister Peter Chin Fah Kui told an international palm oil congress in Kuala Lumpur.

The Malaysian Palm Oil Board will "commence soon the construction of up to three biodiesel plants, each with annual capacity of 60,000 tons of biodiesel," he said. The biodiesel plants, to be constructed at a cost of 60 million ringgit (US$16 million), would also help stabilize palm oil prices by absorbing 500,000 tons of the commodity each year, he said. Construction of the plants will be completed in a years' time, he added

Strong demand for biodiesel from European nations as well as Colombia, India, South Korea and Turkey was fuelling the growth of the new industry, Chin said.

The plants will produce 5% processed palm oil blended with 95% petroleum diesel for diesel engine vehicles and static engines for industrial and power generation. Malaysian crude palm oil production soared to nearly 14 million tons last year, accounting for half the world's production.

It exported 12.5 million tons of the oil last year, worth some $8.0 billion, accounting for 58% of global palm oil exports and 27% of the global oils and fats trade.

Copyright Agence France-Presse, 2005

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