3/6/06 (The Star)  - THE Government has approved the construction of 22 biodiesel plants, whose combined capacity could earn Malaysia some RM700 million in export revenue based on current crude palm oil prices.

Malaysia is vigorously producing palm oil-based biodiesel as an energy substitute to crude oil whose price is unstable and expensive.

So far, the Government has received 61 applications to set up biodiesel plants as companies bet on an expected strong demand for alternative fuel.

Global demand for biodiesel is expected to touch 10.5 million tonnes in two years, with Malaysia having the potential to capture a tenth of that, or about one million tonnes.

A biodiesel plant with a 60,000-tonne capacity each costs RM40 million to build.

Plantation Industries and Commodities Minister Datuk Peter Chin Fah Kui said currently 10 biodiesel plants are being constructed.

Out of the 10, three are joint ventures between the Malaysian Palm Oil Board and three firms - Golden Hope Plantations Bhd, Kumpulan Fima Bhd dan Carotino Sdn Bhd which are expected to be operational by year-end.

"We have also received numerous enquiries from potential buyers for our biodiesel from the European Union, the US, Australia and South Korea," Chin said on Wednesday.

His speech was read by the ministry's deputy secretary general I Mohd Zain Omar at the launch of Rimbunan Sawit Bhd's prospectus.