1/5/06 (The Star) - AS a biodiesel player with the highest number of confirmed biodiesel plants in Malaysia, Golden Hope Plantations Bhd no doubt wants to see a speedier implementation of the Biodiesel Act.

Group chief executive Datuk Sabri Ahmad told StarBiz that under the proposed Biodiesel Act, the Government must consider channelling a portion of the subsidy given for fossil fuel to biodiesel, so that the price of biodiesel would be attractive to consumers.

“At current fossil fuel prices, it will be difficult for biodiesel to compete,” he said.

In Europe, for instance, biodiesel is tax-free. Petroleum products, however, are heavily taxed. For example, in Britain, diesel is sold at 90 pence per litre while in Germany, it is sold at 1.05 euros per litre. “This is much higher than petroleum prices in Malaysia,” he added.

Sabri said: “It is good that the Government has encouraged the use of biodiesel by making it mandatory for the blending of at least 5% biodiesel into diesel (B5).”  

 
Prime Minister Datuk Seri Abdullah Ahmad Badawi looking at a model of the biodiesel plant being constructed by Golden Hope Plantations Bhd in Banting during a tour of the company's booth at Pantai Batu Burok in Kuala Terengganu.

He said Europe, for example, had put in place the EU Biofuels Regulation, which intended to raise the market usage of biofuels from 2% in 2005 to 5.75% in 2010 in the transport fuel market. This is equivalent to a market potential of roughly four million tonnes of biofuel by 2010. 

Golden Hope, which aims to be a leading manufacturer of biodiesel within the next few years, is setting up four biodiesel plants – three in Malaysia and one in the Netherlands.

Sabri said the four plants would cost a total of RM250mil. He expects the plants to start producing 390,000 tonnes of biodiesel by the end of next year.

Golden Hope is also the first company in Malaysia to launch its first biodiesel brand - BIO-N (pronounced as Beyond) - last month. 

BIO-N would be the registered trademark for all biodiesel produced by Golden Hope, said Sabri.

According to him, the group's first biodiesel plant in Banting with a production capacity of 30,000 tonnes per year is slated for operation this August. 

Its second plant, which Golden Hope is leasing from Malaysian Palm Oil Board with production capacity of 60,000 tonnes per year, is targeted for operation in July next year. 

The remaining two plants - in Bintulu Sarawak and the Netherlands with annual production capacity of 150,000 tonnes each - are expected to start operations before the end of 2007. 

According to Sabri, the group's bullish venture into the biodiesel industry was in line with its strategic plan to focus on oil palm plantation and downstream businesses. 

Thus far, Golden Hope’s downstream businesses were focused on commodity sales, production of cooking oil and edible fats and oleochemicals for the non-food business.

“We are bullish about the global demand for biodiesel over the next few years,” Sabri said.

He added that demand would be boosted, among other things, by the significance of the Kyoto Protocol - the United Nations framework convention on climate change to reduce Green House Gas, higher fossil fuel prices, and power plants in Europe switching to refined cooking oil as a cheaper source of fuel. 

“The petroleum crisis is expected to be long drawn due to lack of new reserves, instability in the Middle East, shortage of production capacity and increase in demand by countries like China. 

“High oil prices, coupled with supportive government policies, will make biodiesel ventures highly lucrative,” he added.