KUALA LUMPUR, Sept 1 (Bernama) -- Envo Diesel, the made-in Malaysia biofuel comprising five percent palm oil and 95 percent diesel (B5), will be made available at selected pump stations soon.

Envo Diesel will also be used by government vehicles in Putrajaya by the end of this year, said the Ministry of Finance's 2006/2007 Economic Report.

The fuel will also be introduced to selected transport fleet operators, heavy machinery operators as well as power generation and industrial users, the report said in a special article.

Towards this end, MoF foresees that annual imports of petroleum diesel could be reduced by 500,000 tonnes when all diesel vehicles in the country are involved in the Envo Diesel programme.

The report said independent tests on Envo Diesel are presently being carried out to reassure interested parties such as the Automobile Association of Malaysia (AAM), oil companies, vehicles suppliers, engine manufacturers and the Department of Environment (DOE) on the acceptability of the fuel.

"The immediate goal is to obtain recognition and acceptance of the B5 blend while the long-term objective is to increase the blending ratio to 20 percent from five percent," it said.

On the progress of setting up palm oil-based biodiesel plants, MoF said that to date three companies had collaborated with the Malaysia Palm Oil Board (MPOB) to set up the plants in the country using MPOB's technology.

The annual capacity of each plant is estimated at 60,000 tonnes.

These plants have also incorporated a demonstration plant for the production of winter palm-oil based biodiesel for export.

On the National Biofuel Policy, which encompasses the formulation of a national Industrial Biofuel Act as well as the provision of various incentives to encourage private sector involvement, is scheduled to be tabled in Parliament by the end of 2006, and will be underpinned by five strategic thrusts.

Such efforts will see Envo Diesel supplied to the industrial sector for firing boilers in manufacturing, construction machinery and generators.

-- BERNAMA