Biodiesel Scheme Faces Delay

SUBANG: The full implementation of the mandatory biodiesel blend
programme could be deferred to next year, said Plantation Industries

and Commodities Minister Tan Sri Bernard Dompok.

He said the

ministry was still looking at the fuel’s extra cost of about four to

five sen per litre, mainly due to transport and blending costs, which

needed to be handled amicably prior to selling the fuel.


The Government has a one-off capital expenditure (capex) of about

RM200mil for the biodiesel programme but is concerned about the extra

cost and which party would absorb it.

“We don’t know whether to

pass it to consumers, petroleum companies or the Government (to absorb

it as subsidy), ” Dompok told reporters after the official launching of

Malaysian Timber Council’s (MTC) guidebook, On-site Identification of Some Common Timbers Used in Malaysia, yesterday.

The

Government had initially targeted to introduce the mandatory B5

biodiesel fuel programme in January this year. It is also believed that

the Government is still deliberating on whether to opt for the B5 (5%

biodiesel and 95% diesel) or B3 blend (3% biodiesel and 97% diesel).

“Hopefully,

we can stick to the B5 blend as the production of biodiesel will take

up about 500,000 tonnes of palm oil, which is good given the current

high palm oil stocks level,” Dompok said. According to the Malaysian

Palm Oil Board, Malaysia currently produces almost two milllion tonnes

of palm-based biodiesel per year.

Despite the approved 91

biodiesel licences, only seven biodiesel plants are in operation.

Production volume, however, is under 10% of the total installed

capacity of the plants in operation.

Earlier, at the MTC

guidebook launch, Dompok said the timber industry faced many challenges

from rising operation costs to shrinking export markets. He said the

global recession had affected Malaysia’s timber products exports in

2009, with the value of exports going down to about RM19.8bil from

RM22.8bil in 2008. “We will be happy if exports in 2010 can climb back

to the 2008 level,” the minister said.

Source : The Star by Hanim Adnan

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