Govt Will Step In If Biofuel Palm Oil Prices Rise Significantly Says Minister

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Primary Industries Minister Teresa Kok admits that Malaysia has never implemented biofuel that seriously, unlike Indonesia.KUALA LUMPUR: The government will step in if biofuel and palm oil prices increase significantly in the future, says Primary Industries Minister Teresa Kok
She said one of the measures the government may take if the prices continue to increase is reducing the blend of the biofuel, like what Indonesia has been doing
“The problem with us now is that we have never implemented biofuel that seriously, unlike Indonesia
“In the past, we went for B10, and now B5 for the industrial sector
“If the biofuel price keeps going up, we can always reduce the blend. This is one of the ways to mitigate the price change
“But, at the moment, the difference in the prices (between biofuel and diesel) is 0.41 sen per litre, not even one sen,” she told reporters after officiating the FMM-MPOB Seminar on Biodiesel (B7) Implementation in the Industrial Sector here today
She said the price of B7 (a blend of 7.0% palm methyl ester and 93% petroleum diesel) is just as volatile as petroleum diesel, adding the industry will realise that prices of biodiesel and fossil diesel will average out eventually
Pricing, she said, should not be a key concern hindering players within the industrial sector from adopting the higher biodiesel blending percentage
She noted that the introduction of the B7 programme in the industrial sector from July this year will utilise 230,000 tonnes of palm biodiesel per year, mitigating 690,000 tonnes of carbon dioxide equivalent annually
“Biodiesel does not only offer significant and impactful environmental benefits, notably by way of reducing greenhouse gas in our pursuit of a greener carbon footprint, but also yields tremendous positive industrial, commercial and social benefits for the country as a whole
“With the biodiesel phenomenon continuing to make a greater impact worldwide, it would be irrational for us to ignore and not capitalise on these enormous benefits
“This is especially so as it will also encourage domestic consumption of our palm oil,” she added
On Malaysia’s latest palm oil deal inked with China, which includes an additional RM4.56 billion worth of palm oil purchases by the world’s second-largest economy, Kok said the five-year deal, starting this year, would be a big help to local smallholders
She said the ministry will also be working towards more concrete signings during her visit to China at the end of next month
On Thursday, Primary Industries Ministry secretary-general Tan Yew Chong was reported to have signed a memorandum of understanding (MoU) on behalf of Malaysia under which China will agree to buy an additional supply of at least 1.9 million tonnes of palm oil from Malaysia over five years, beginning this year
This is in addition to the four purchase contracts inked in March for the export of 1.62 million tonnes of palm oil from Malaysia to China, with a combined estimated worth of US$891 million (RM3,700 million). - FMT

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