28/09/05 PETALING JAYA, (Bernama) -- Biodiesel based on palm oil wouldhave higher chances of survival under certain conditions compared withbiodiesel based on canola oil or rapeseed, a consultant from Germany,Wolgang Rupilius said Wednesday.

He said that although currently canola oil based biodiesel is the fastestgrowing oleo chemicals product, this development is largely artificial,since it is based on the tax exemption for biodiesel.

He said that studies have shown that in order to produce one tonne ofcanola oil based biodiesel, 1.2 tonnes of fossil fuel had to be used butthat is not the case for palm oil.

Palm oil production did not require (much fossil) energy because palmbased biomass is used in the system in order to heat boiler that producesbiodiesel, he said at the International Palm Oil Congress (PIPOC) 2005,here Wednesday.

Rupilius said that by "eliminating political influence and subsidies" palmoil will survive in the biodiesel sector and is the right product as rawmaterial.

He pointed out that producing palm oil based biodiesel is much morecheaper, and "if you have a free economy, European biodiesel producerswill stop buying canola oil and rape seed oil and instead start buyingpalm oil."

"Hence, I am sure some kind of restrictions will come or otherwise palmoil will take over completely the biodiesel market in Europe, which wouldnot be accepted by the biodiesel producers and population in Europe," hesaid.

Rupilius said that the cost to produce one tonne of palm oil basedbiodiesel is between 150 to 200 euros but rape seed would cost between 500and 600 euros.

He said that European companies involved in the biodiesel business werefully aware that the development of biodiesel depended on tax exemptionand they have started to think about the future utilisation of theirplants in case biodiesel is not profitable anymore.

The alternatives are either to look into cheaper raw materials or toproduce methyl ester for the chemical industry using their currentfacility, he said.

New developments in Europe and the US also showed that there were moreefficient methods to manufacture diesel from renewable resources, witheven lower total green house emissions, he said.

He said that the production of methyl ester sulfonates (MES) has a largepotential, since the alternative petrochemical raw material alkyl benzeneis today more expensive at around US$1,300 (US$1 = RM3.76) per metrictonne than the palm based methyl ester.

Palm-based methyl ester is also readily biodegradable. The lowest cost rawmaterial for the manufacture of MES is hydrogenated palm stearins methlyester, which is between US$500 and US$600 per metric tonne.

-- BERNAMA