12/10/06 KUALA LUMPUR: Golden Hope Plantations Bhd maintained that it was still commercially viable to produce palm oil-based biodiesel despite the weakening crude oil prices.

Group chief executive Datuk Sabri Ahmad said on Thursday: "It is feasible (for biodiesel conversion) if crude oil stays around US$58 per barrel and crude palm oil (CPO) continues to be traded within RM1,450 to RM1,500 per tonne range."

Golden Hope is the local plantation group with the most biodiesel plant projects in hand – three in Malaysia and one in the Netherlands. 

Once operational by end-2007, the plants are expected to generate an annual production of about 400,000 tonnes.

It was believed that the group is eyeing to set up biodiesel plants in China, South Korea and Indonesia.

Sabri told reporters after the group's subsidiary Mentakab Rubber Company (Malaya) Bhd AGM on Thursday that demand for biodiesel was not only driven by crude oil prices but also, regulatory and environmental reasons.

He said Europe and the United States are supporting the move for alternative energy. 

"Many are putting up legislations to make it mandatory for biofuel usage," Sabri said adding that no petroleum tax was imposed on biodiesel in Europe.

He added that Europe is expected to increase its palm oil uptake to about one million tonnes this year onwards where the commodity was widely used as feedstock for power generation.