Sunday January 23, 2005 MIRI: The Plantations, Industries and CommoditiesMinistry is seeking the Government’s approval to set up a RM200milrefinery to produce bio-diesel from palm oil.

"There are two proposals that we are looking at, the first is to blendpetroleum diesel with palm diesel and the other is to convert palm oilinto methyl ester which can be used as fuel," said Minister Datuk PeterChin Fah Kui.

"We already have the technology to turn crude palm oil into bio-diesel,but we need the Government to sanction this project," he told a pressconference here yesterday.

Chin added that such a huge project would require private sectorinvestment.

The ministry estimates that RM200mil will be needed for the plant.

Chin, who is Miri MP, said legislation pertaining to bio-fuel would bediscussed in Parliament soon.

He stressed that the bio-diesel project was significant to the ministrybecause Malaysia produces some 14 million tonnes of crude palm oil yearly.

"If we can turn 500,000 tonnes into bio-diesel, it will be a lot. Thiswon't jeopardise the petroleum industry, but will enormously benefit thepalm oil industry," he stressed.

Chin noted that similar bio-diesel projects had been successful in Europe,where rape seeds and sunflower seeds were being converted into methylester, adding that Brazil was now experimenting with sugar cane.

He said diesel usage in Malaysia reached 4.5 billion litres from Januaryto October last year compared with 3.7 billion litres for the whole of2003