Malaysia delay’s mandatory 5% biodisel

Malaysia is delaying the implimentation of a law demanding that 5% of diesel fuel sold in the country is made of a rewnewable source because of the increasing cost of palm oil, according to a report on Thompson Financial.

The report says:

The current high price of biofuel raw material, namely refined, bleached and deodorised palm olein, has made it unwise to implement the Act now, Malaysia’s Plantation Industries and Commodities Minister Peter Chin said.

“This has made the EnvoDiesel more expensive and unsuitable for commercial usage at the moment,” Chin was quoted as saying.

If a country like Malaysia cannot afford to use palm oil in biodisel, how will European biofuel producers expect to make a profit on biodiesl based around palm oil, once the cost of shipping, processing and factory depreciation is added to the equation. We are going to see a lot of invention, interms of other feed stock sources in the coming months.

Also it will be interesting to see whether Japan delays the aid it offered Malaysia to help it to develop palm oil as a biofuel in mid August.

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2 Responses to Malaysia delay’s mandatory 5% biodisel

  1. Laren 29 August, 2007 at 3:23 am #

    Malaysia is rich in both fossil fuel and palm oil and are net exporters for both. With exceptional increased revenues from palm oil this year, the revenues are best realised from exports than to subsidise its use and dent its treasury. As a developing nation, other issues as poverty eradication, education and social and infrastructure developments would be priorty above mandating biofuels and this i think is acceptable. As for the EU which is progressive and developed, the situation is much different where a mandate on biofuels could hold a higher agenda.

  2. Jon 29 August, 2007 at 4:06 am #

    Malaysia subsidizes all road transport fuel where as Europe taxes all transport fuels…so it is not fair to suggest if Malaysia can’t use BD how can the rest of the world! European countries further subsidize BD by not taxing it at the same rate as mineral diesel, Malaysia can’t afford to do this.

    It should also be noted the Envodiesel is not biodiesel, it is vegoil (palm olein) mixed with regular diesel. Not warranted by many engine manufacturers, it is a cheaper way to add a bio component than transesterifying a vegoil but is not such a high quality fuel.

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