7/9/06 (Business Times) -  THE Government may revoke some existing biodiesel licences if the companies do not build their plants within the time frame set.

"The Government has so far issued 52 biodiesel licences. We want to see all these biodiesel licence holders follow through with their plans," Plantation Industries and Commodities Minister Datuk Peter Chin Fah Kui told Business Times.

"We want genuine and committed investors. We object to those who are not serious, or have the intention to get the licence and sell it for a commission," he added.

Chin said ministry officials are already checking whether the licence holders have started to build their biodiesel plants.

"If they have not done so within the time frame they stated in their biodiesel applications, we'll ask them to show cause," he said.

Chin said that if the ministry is not satisfied with the progress of these biodiesel licence holders, stern action will be taken, including taking back their licences.

Carotino Sdn Bhd, Carotech Bhd and Golden Hope Plantations Bhd are currently producing methyl ester as a by-product of extracting Vitamin E from palm oil.

Larger-scale biodiesel plants, capable of churning out 60,000 tonnes a year, have been built by Malaysian Palm Oil Board joint-venture partners Rubiatec Sdn Bhd (a unit of Golden Hope Plantations Bhd), Kumpulan Fima Bhd and JC Chang Group's Carotino Sdn Bhd.

These three biodiesel plants, involving RM120 million investments, or RM40 million each, are in Port Klang, Selangor and Pasir Gudang in Johor.

Last year, Malaysia produced 15 million tonnes of palm oil products, of which 90 per cent was exported to over 140 countries, earning the country some RM30 billion in sales.

Two months ago, Malaysia and Indonesia - the two biggest palm oil producing countries in the world - agreed to set aside six million tonnes of crude palm oil (CPO) a year as feedstock for biofuel and biodiesel manufacturing.

This reassured biodiesel investors that there would be adequate supply of raw materials for their factories.

The Government has time and again reminded oil palm plantation owners in Malaysia to produce more CPO through replanting high-yielding clones, instead of expanding their plantation area.

"By 2010, we aim for a yearly CPO production of 18 million tonnes gathered from a total of five million hectares of planted area," Chin said.

While the evaluation process is being carried out, new applications for biodiesel licences will be put on hold. "As I have said before, the freeze is temporary. We need to be thorough in processing all those applications, and that can take some time," Chin said.

Asked how soon the Government would lift the freeze and start accepting biodiesel applications again, he said: "Hopefully, by the end of the year, when we've built up a comprehensive evaluation of the various downstream activities in the palm oil industry