12/10/2010 (Daily Express), Kota Kinabalu: Diesel-powered vehicles in the country may start using B5, a blend of five per cent palm methyl ester and 95 per cent regular diesel, beginning middle of next year.
Plantation Industries and Commodities Minister, Tan Sri Bernard Dompok, said the implementation would start first in the central region areas of the peninsula namely Klang Valley, Negeri Sembilan and Malacca in June, 2011, and then nationwide.
"Oil companies have been asked to make or set up their respective blending facilities to enable the new fuel to be made available at all kiosks in the central region," said Dompok.
He was asked about the status of the B5 after launching the Malaysia Palm Oil Board (MPOB) Mini Seminar on Transfer of Technology at Hyatt Regency Kinabalu, Monday.
The use of B5, a mandate requiring the use of the blended fuel and support the palm oil industry, will take up 500,000 tonnes of the country's total annual crude palm oil production.
It was reported that Indonesia and Thailand have started using B5.
In Malaysia the implementation was supposed to kick-start in 2007 but was postponed because the Government was reluctant to subsidise biofuel blends to match diesel prices at the pump.
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Early this year Dompok was reported to have said that the Government would bear the cost of developing six petroleum depots with blending facilities at a cost of RM43.1million.
In turn, oil companies like Petronas, Shell, ExxonMobil and Caltex, would have to subsidise palm-based biofuel blends at the pump.
It was also reported that 56 licences for biofuel production have been approved in the country for a total capacity eof 6.8million tonnes.
Last year, the country produced 227,457 tonnes of palm-based biofuels that garnered export earnings of about RM606 million.
Dompok said there is actually no competition between Malaysia and Indonesia but both are working together in terms of oil palm.
In fact, he said nearly one million hectares of oil palm in Indonesia are operated by companies majority-owned by Malaysians.
"There is no competition. Because the global market for palm oil is huge.
Other countries like in Africa and Latin America also now starting to produce palm oil," he said.
At the end of this month he and the Indonesian Minister of Agriculture will be going to Europe together to promote both country's palm oil industries.
"We will use the opportunity to explain on everything which have been raised by the foreign media on our palm oil industry," he said.
BIOFUELS such as biodiesel from soybeans can create up to four times more climate-warming emissions than standard diesel or petrol, according to an EU document released under freedom of information laws.
The European Union has set itself a goal of obtaining 10% of its road fuels from renewable sources, mostly biofuels, by the end of this decade, but it is now worrying about the unintended environmental impacts.
Chief among those fears is that biofuel production soaks up grain from global commodity markets, forcing up food prices and encouraging farmers to clear tropical forests in the quest for new land. Burning forests releases vast quantities of carbon dioxide and often cancels out many of the climate benefits sought from biofuels.
Biodiesel from North American soybeans has an indirect carbon footprint of 339.9kg of carbon dioxide (CO2) per gigajoule – four times higher than standard diesel – said the EU document, an annex that was controversially stripped from a report published in December. But it has now been made public after Reuters used freedom of information laws to gain a copy. The EU’s executive European Commission said it had not doctored the report to hide the evidence, but only to allow deeper analysis before publishing.
“Given the divergence of views and the level of complexity of the issue ... it was considered better to leave the contentious analysis out of the report,” the Commission said in a statement. “The analysis prepared under this study applied a methodology which by many is not considered appropriate.”
The annex adds some weight to a growing dossier suggesting biofuels are not as green as once thought – even the more advanced, second generation biofuels made from wood chips.
Biodiesel from European rapeseed has an indirect carbon footprint of 150.3kg of CO2 per gigajoule, while bioethanol from European sugar beet is calculated at 100.3kg – both much higher than conventional diesel or gasoline at around 85kg. By contrast, imports of bioethanol from Latin American sugar cane and palm oil from Southeast Asia get a relatively clean bill of health from the study at 82.3kg and 73.6kg respectively.
But one of the scientists involved with the study cautioned that much work remained to be done before the issue was properly understood, and that no firm conclusions could be drawn about the relative merits of different biofuel sources. – Reuters
Tan Sri Bernard Dompok (right) and Datuk Lee Yeow Chor at the briefing.
KUALA LUMPUR: Petroliam Nasional Bhd (Petronas), Shell, BHP, ExxonMobil and Chevron have been allocated with a start-up fund worth RM1mil each by the Malaysian Palm Oil Board (MPOB) to set up infrastructure for B5 biodiesel blending facilities.
Plantation Industries and Commodities Minister Tan Sri Bernard Dompok said the initial incentive given to the five petroleum companies reflected the Government’s intention to fully implement the mandatory B5 biodiesel programme by the middle of next year.
B5 is the blending of 5% biodiesel with 95% fossil fuel diesel. The much delayed B5 programme was initially slotted for launch in January this year.
“We are on target for the B5 biodiesel implementation by June 2011,” Dompok told a briefing after opening the 3rd International Palm Oil Trade and Seminar (POTS) organised by MPOB yesterday.
He said the five petroleum companies would need to install pipes, tanks and automation system to blend B5 biodiesel at the designated depots, starting with central region – Port Klang and Putrajaya (Selangor) – as well as Dengkil (Negri Sembilan) and Tangga Batu (Malacca).
On the B5 pricing, Dompok said: “Between now till the implementation (mid-2011), we will have a lot of time to figure out the various solutions to issues that will distort the B5 programme in the local market.”
Given the high raw material (palm methyl ester) cost, the B5 biodiesel is said to be more pricey than the currently heavily subsidised diesel fuel.
The B5 biodiesel programme will see some 500,000 tonnes of local palm oil stock being taken up. The current palm oil stock was about 1.7 million tonnes, said Dompok.
Earlier, when asked whether Malaysia’s crude palm oil (CPO) production would be able to meet its target of 17.8 million tonnes this year, Dompok said: “Right now, we are not far off from this target.
“Despite talk of an El Nino early this year, it didn’t really came. I think the next three months will be crucial as all our harvests will start to come in.”
On whether CPO price will likely hit RM3,000 per tonne this year, Malaysian Palm Oil Council chairman Datuk Lee Yeow Chor said the council’s focus was more on global market expansion and no so much price-centric.
“We are more concern with the healthy growth in the global consumption for palm oil and want to diversify our export markets,” he added.
Lee said there should not be any misinformation on the sustainability of palm oil that could distort its market expansion efforts.
Dompok, meanwhile, said the Government was aware of the pressures of diminishing suitable land for oil palm cultivation in Malaysia.
“We are actively looking at ways to improve productivity,” he said, adding that between 2009 and 2010, some RM100mil was allocated to assist smallholders in replanting activities.
Replanting is widely seen as a way to enhance productivity and also to achieve Malaysia’s long-term target to achieve national average of 35 tonnes of fresh fruit bunches and oil extraction rate of 25% by 2020.
