09/10/2009 (The Star Online), Paris - The Malaysian government will be "careful" about subsidies for the renewable energy industry but may offer the necessary incentives to keep energy rates competitive for the consumer, Prime Minister Datuk Seri Najib Tun Razak said.

"Well, we might have to provide some incentives. We are very careful with the word subsidy because subsidy, once you introduce, you can't take it away. It's very difficult to take away," Najib told La Tribune, a French business daily, recently.

Najib was interviewed by the daily's Asia Desk editor Laurent Chemineau during his four-day official visit to France which ended on Wednesday.

He said that the key to the renewable energy sector was the price and that consumers expected it to be low.

The government might have to provide some form of incentives because the renewable energy players might not be able to get a return on investment if the prices were too low, he said.

Najib said the government planned to have "a better fuel mix" for the country, as currently, it depended highly on coal, which is a highly polluting energy source, and gas, a depleting resource.

The government would increase the percentage of hydro power production and look at other renewable energy sources like solar, although the cost was quite high, he said.

On Malaysia's nuclear technology sector, Najib said the country had only a "very basic” set up and was far from having the capability for nuclear reactors.

He said Malaysia's nuclear energy development was purely for peaceful purposes so that the country could have a better fuel mix.

Najib also said that Malaysia was exploring the possibility of using Marseille as a strategic gateway for the introduction of palm oil into Europe.

The proposal included setting up a palm oil refinery plant in Marseille, he said. "We are exploring that now."

Marseille, located on the southeast of France on the Mediterranean Sea, is France's largest commercial port.

Malaysia is in initial talks with Port of Marseille, he said.

Malaysia, one of the world's biggest palm oil producers and exporters, produced 17.7 million tonnes of palm oil last year.

Of this, 15 million tonnes were exported to more than 150 countries. - Bernama