28/8/06 (The Edge News)  - Shell Malaysia sees the Malaysian government’s stance on biofuels as a move in the right direction but does not see the use of crude palm oil as a viable feedstock for biodiesel in the long term, its chairman Saw Choo Boon said.

“We support biodiesel and the government’s move on biodiesel and we will do whatever the government wants to do to promote biofuels. Having said that, our Shell group’s stand on biofuels is that we are looking more into the long term.

“Our belief is biofuels made from food sources are not sustainable in the longer term because they compete with the food chain. We believe biofuels made from cellulose waste and biomass are the fuels of the future,” he told FinancialDaily recently.

Saw said cellulose waste comprised things like weed and padi stalks and leaves while biomass was made up of matters such as wood chips.

He said the Shell group is investing in research on both types of biofuels and for the case of biomass, hopes to have a pilot plant up and running in Germany by the decade’s end.

“In the meanwhile, we are very active in the first generation of biofuels and believe we move the largest quantity of first generation biofuels in the world. We are probably the largest trader and marketer of ethanol in the world,” he added.

Saw said it would not be difficult for Shell Malaysia to comply with the government’s plans to have 5% crude palm oil content in all diesel sold locally next year.

“It’s a blend only. Very easy, all we need is tankage and that will incur some costs but not very major.”

While the government’s stance on biodiesel is to be applauded, Saw said the government also has to look into the suitability of using crude palm oil blended diesel for car engines.

“If it’s not suitable for engines, engine manufacturers may not want to give warranty; we have to address that.

“We have to ensure that the source of the biofuel is made from a sustainable source. Some people outside Malaysia are very concerned that if biofuels proliferate, this could mean the destruction of forests for more plantations.

“Malaysia, though, has the best sustainable programmes on our forests and plantations in the world but others may not,” he said.