Malaysia to switch to biofuel next year 2011

Malaysia, the world's second-largest palm oil producer, will make it mandatory for all vechicles to use biofuel from next year, the goverment announced Wednesday.

Malaysia plan to shift to biofuel - a mixture of diesel with five per cent processed palm oil have been delayed over the pass few years due to price fluctuations

The plam will now be implemented in stages in several central states from June 2011, the Plantation Industries and Comodities Ministy said in a statatment, adding that the extra cost will be borne by petroleum companies.

The policy will benefit the country as biofuel is environmentally friendly and it will reduce our dependence on petroleum.

It will also strengthen the palm oil prices and enable the planters especially smallholders to benefit from the stronger palm oil price.

It will discuss the implementation mechanism with petroleum companies while the government will set up six petroleum depots with blending facilities.

The government has said the swith to biofuel will help reduce the cost of fuel in Malaysia, where petrol is subsidised but conservationists have criticised oil palm plantations for destroying wildlife habitaits.

Many studies have shown that the usd of biodiesel reduces greenhouse gas emissions aas compared to the use of petroleum diesel.

It is universally recongnised that fossil fuel reserves are finite and fast depleting. As suce renewable energy sources need to be found to complement the needs of energy requirements.

Malaysia aims to be the global leader in biodiesel and has approved 56 licences for biodiesel production, which account for a production capacity of 6.8 million tonnes.

The fortunes of Malaysia's biofuel industry waned in late 2008 when the price of crude oil tumbled, triggering a crash in the palm oil price which made supply uncertain, jeopardising the long-term contracts the industry needs. Malaysia is the world's second-largest exporter of palm oil after Indonesia and the two contries account for 85 per cents of global production.