KUALA LUMPUR, Dec 18 (Bernama) -- The ministry of plantation industriesand commodities is due to submit a report on the possible use ofbio-diesel as an alternative fuel source, its minister Datuk Peter ChinFah Kui said.

He said the report would be submitted at the next meeting of the Cabinetcommittee set up to study the impact of rising oil on the economy.

However, he was unable to give the exact date of the next meeting.

"The ministry is prepared to launch bio-diesel as an alternative energysource. But we must get the government to give a go ahead first," he saidafter witnessing a signing ceremony between Ecofuture Bhd and China'sHangzhou Project and Research Institute of Electro Mechanics in LightIndustry.

The plan, he said was not on using bio-diesel completely but by justblending five percent of it with petroleum diesel.

However, he said the quantum could vary depending on the government'sdecision.

"We have to get the go ahead from the government before we can do anythingin concrete. As far as the technology is concerned, we are ready," hesaid.

He said he believed the usage of bio-diesel as an alternative source ofenergy would give a positive impact to the consumers, government andindustry.

"If 500,000 tonnes of crude palm oil (CPO) have to be allocated for theuse of palm diesel, there will be a reduction of CPO in the market. So,you should know what kind of impact the market will have," he said.

CPO prices basically move according to the demand and supply level andwhen the supply is lower than the demand, CPO prices would increase.

On the signing ceremony, which would enable Ecofuture to acquiretechnology to produce pulp from empty fruit bunches (EFB) at its new plantin Segamat, he said the establishment of a pulp mill that use oil palmbiomass as their feedstock raw materials would provide a lot of benefits.

Among others, he said it would enable a continuous supply of cellulosicfibres, future paper price stability, generating extra income for thefarmers and the oil palm industry by providing direct employment forapproximately 600 people in the mill and other related areas of operation.

Besides Johor, he said based on the distribution of palm oil mills perlocation in the respective state, other suitable site for such pulp millswould be Pahang, a site either in the district of Rompin or Temerloh,Perak (Lower or Central Perak) and Sabah ( Sandakan or Tawau).

-- BERNAMA