Palm oil for biodiesel sustainable - Golden Hope

12 June 2007 05:28  [Source: ICIS news]

SINGAPORE (ICIS news)--Palm oil is a sustainable raw material for biodiesel due to a higher oil yield per hectare (ha) compared to its rivals, a senior executive with a major Malaysian palm oil company said on Tuesday.

The higher yield compared to other vegetable oils such as soya and rapeseed could potentially be increased by using improved plantation material and practices, Zazili Jaafer, GM, Biodiesel of Golden Hope, said at the opening of the Biofuels Asia conference.

Palm oil is being increasingly sought as a feedstock for biodiesel as high crude oil prices drive a search for alternative fuel sources. Prices of palm oil, traditionally used as cooking oil, rose 40% last year on demand from the biodiesel sector.

While nearly 3.5m tonnes or 50% of rapeseed produced in Europe is being used to produce biodiesel, only one million tonnes - a fraction of palm oil produced in Asia - is currently used to produce biodiesel.

The sustainability debate on biofuels was about reducing emissions of greenhouse gases and therefore reduce global warming, and palm oil with its cost and yield was no less sustainable than other vegetable oils, Jaafer said.

However, as palm oil competes with food use in Asia, there has been a tremendous pressure on palm oil prices in recent months, Jaafer said. The recent increase in palm oil prices may leave only a dozen or so biodiesel plants functioning in Malaysia by the end of this year. 

Palm oil prices hit a decade's high of nearly $800/tonne in May, outpricing itself in the biodiesel industry, said other biodiesel producers at the conference.

Although palm oil prices have seen some downward correction in the last few days, a much more significant correction in prices has to be seen before biodiesel production can be accelerated here, Jaafer said.

Golden Hope runs two biodiesel units in Malaysia - a 30,000 tonne/year plant that started in June 06 and another 60,000 tonne/year facility that started production in April 2007.

The company is also building a 200,000 tonne/year biodiesel facility in the Netherlands which is expected to start production by the end of 2007.

By: Anu Agarwal
+65 6780 4359

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