25/05/2009 (Bernama), Kuala Lumpur - There is no plan to reduce the current biodiesel mandate of five percent despite the high feedstock cost, Deputy Minister of Plantation Industries and Commodities, Datuk Hamzah Zainudin said today.
He said the government encouraged the use of biodiesel in the country, although it was not as yet mandatory.
"We would like to encourage its use because we are a party to the Kyoto Protocol. If the policy is to move in the direction of biodiesel usage, we need to follow.
"It is not mandatory yet because the price of raw materials is very high at present," he added.
He was speaking at a media conference at the Palm International Nutra-Cosmeceutical Conference (PINC) 2009 here today.
The Kyoto Protocol is a protocol of the United Nations Framework Convention on Climate Change (UNFCCC or FCCC), an international environmental treaty.
It is a treaty intended to achieve the stabilisation of greenhouse gas concentrations in the atmosphere at a level that would prevent anthropogenic interference with the climate system.
Last October, Malaysia implemented the mandate of a five percent palm-fuel blend with fossil diesel, gradually starting with government vehicles this year before extending it to the industrial and transportation sectors in 2010.
Asked as to the projection of crude palm oil prices this year, Hamzah said:"We hope that this year, the average price could be about RM2,500-RM2,800 per tonne."
Meanwhile in his speech, Hamzah said the palm oil industry is now an important pillar of the country's economy.
He said the sector had contributed significantly towards providing a continuous flow of foreign earnings through the export of palm oil and value-added products to the global market.
"In 2008, palm oil contributed RM65.2 billion or US$18.1 billion in export earnings, which marks another significant year of contribution from the palm oil industry," he said.
He said besides contributing to the nation's economic development, the contribution of Malaysian palm oil to the world's oils and fats market was also very significant.
He noted that the palm oil production of 17.73 million tonnes by Malaysia in 2008, accounted for a 11.1 share of the global production of 160 million tonnes of oils and fats.
According to Hamzah, Malaysian palm oil commanded a 26 percent share of the export trade in oils and fats as well as a 46 percent share of global palm oil trade while being consumed in more than 150 countries worldwide.
"All these were carried out utilising only 4.5 million hectares of land or less than 1.9 percent of the global area under oilseeds covering 233 million hectares," he said.
He added Malaysia is now focusing on increasing productivity through among others, in the upstream sector, which includes increasing oil yields from the current average of four tonnes per hectare annually to eight tonnes per hectare by using genome sequencing.
"By this approach, we hope to continue to be a major supplier of global palm oil needs, without having to open new areas," he said.
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