06/09/2005 (The Edge Daily) - Malaysia will be able to export itsbiodiesel following the completion of the RM40 million pilot plant byOctober 2006, said Malaysian Palm Oil Board (MPOB) director general TanSri Dr Yusof Basiron.

He said work on the plant would start in October this year and it wouldhave an expected production capacity of 60,000 tonnes per year when fullyoperational. The biofuel would comprise 5% processed palm oil and the restpetroleum diesel.

Initial production from the plant would be for the export market, he toldreporters after the AmInvestment Group Bhd Investors Conference in KualaLumpur on Sept 6.

"There are 10 companies, including non-plantation firms, which are biddingto operate the plant," he said. He expected more of these plants to be setup over the next two years to produce between 300,000 to 400,000 tonnes.

Yusof expected biodiesel palm oil to be "profitable" due to high oilprices. Oil prices recently hit an all-time high of US$70 (RM263.48) perbarrel before easing to around US$66 on Sept 6.

He said the target market for the biodiesel would be the transport andindustrial sectors. He added palm oil was much cheaper compared withrapeseed oil which was also being used in biofuel in Europe.

He said MPOB wanted to commercialise biofuel technology under ananticipated national biofuel policy and it had teamed up with PetroliamNasional Bhd on the RM40 million palm diesel plant.

He forecast that over 10% of the expected annual production of palm oil,estimated at 15 million tonnes, to be allocated for biofuel.