The current crude palm oil price (CPO), which is hovering at RM2,500 per tonne, is conducive to introduce biodiesel in Malaysia, according to Plantation Industries and Commodities Minister Datuk Peter Chin Fah Kui.
Chin said the current price was similar to that of a tonne of diesel imported into the country.
“Today we have a price situation whereby it is possible to introduce biodiesel in the country. The biodiesel factories that have been built will now be able to operate and make a slim profit,” he said in an interview with Bernama recently.
Malaysia has 15 CPO-based biodiesel plants with a majority of them running at a capacity of 60 to 70 per cent, serving orders from overseas markets like Japan, South Korea, Australia, Turkey and countries in Europe.
Chin said the government planned to use 500,000 tonnes of CPO, which represented five per cent of the total diesel used in the country, for biodiesel.
He said if the CPO price goes down further, then the ministry would propose to the government for five to 10 per cent blend of biodiesel with diesel.
The percentage of mixture could vary according to the CPO price, according to the minister.
“If the price of CPO really comes down, we will recommend to the government to introduce the use of biodiesel in our country, particularly in the industrial and transport sectors. The biodiesel plants can also make a bigger profit,” he said.
On the outlook for CPO, Chin said there was likelihood of the price going up and in such a scenario the blend of biodiesel as well as the production would need to be minimised.
He said if the price continued to head downwards, then the ministry would encourage replanting to reduce production and boost the price.
“We have always encouraged replanting of about five per cent of the total hectare but we have never achieved the five per cent. At most is three per cent.
“If the CPO price continues to come down, we will definitely give incentives for planters to replant,” he added.
On another development, Chin said his ministry and related agencies would continue to promote and expand Malaysia’s palm oil market.
He said 46 per cent of world’s palm oil is being supplied by Malaysia. — Bernama
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