3/7/06 (Business Times)  -  THE overwhelming number of applications for the construction of new biodiesel plants in the country has been cited as one of the reasons why the Government imposed a temporary freeze on the issuing of biodiesel licences.

On June 29 2006, the Cabinet Committee on the Competitiveness of the Palm Oil Industry announced that the Government will stop issuing new biodiesel manufacturing licences with immediate effect.

In a statement released from Putrajaya, Plantation Industries and Commodities Minister Datuk Peter Chin Fah Kui said the temporary freeze was brought on by rising concerns that the sudden hunger for biodiesel projects may eat into the portion of crude palm oil (CPO) reserves that are meant for food and oleochemical producers.

"Licence issuing will cease pending the completion of a comprehensive review of all palm oil-based downstream industries," the statement said.

When asked to comment on the Government's recent move, Malaysian Palm Oil Council (MPOC) chief executive officer Tan Sri Dr Yusof Basiron said: "In any industry, there must be a realistic level. There must be a balance between CPO for food and that for fuel."

The Government had received close to 90 applications to build and operate biodiesel plants, he told reporters after speaking at a seminar on "The Future of Biodiesel: Going Places?" in Kuala Lumpur over the weekend.

Yusof explained that the sudden and keen investment sentiment from the private sector is being fuelled by the Government's plan to create an assured local market through the Biofuel Bill due to be tabled before Parliament this month.

"The Envo Diesel market in Malaysia is being created by the Government to absorb high stocks of methyl ester should the producers face a saturated export market," he said.

Malaysia's Envo Diesel, launched in March this year for testing purposes, which blends 5 per cent