HANOI, Nov 16 (Bernama) -- Malaysia can become a global player in the bioenergy industry if it continues its aggressive plan to develop palm oil into biodiesel.

Pacific Food System Outlook's (PSFO) chairman, Walter J. Armbruster, said Malaysia encouraged local players to develop palm oil-based bioenergy sources.

"Going forward, Malaysia will become a major player in producing biodiesel and I think the opportunity to market it will expand.

"Currently, the US, North America and Europe are looking for alternatives to cut petroleum-based products which are beyond their own capacity to produce in their countries," he told Bernama in an interview at the Asia-Pacific Economic Cooperation (Apec) meeting here today.

PSFO represents the first regionwide coordinated effort to provide the outlook for the Pacific food system. Its goal is to help increase knowledge about the diverse components of the vital segment of the global economy.

It is a project of the Pacific Economic Cooperation Council (PECC) in collaboration with Farm Foundation and the Economic Research of the US Agriculture Department.

It has published a report on the current and future prospects for biofuel industry in conjunction with the Apec meeting.

Armbruster said although biofuel production was expanding in the region, it remained a modest element within a portfolio of energy policies of each country.

He said unlike previous high-priced periods which were short-lived, the current increase in oil prices spanned six years and was creating a sustained interest in agriculture as a supplier of energy.

He said ethanol offered a lot of potential as it only accounted for less than two percent of the world's transportation petrol supply.

Armbruster said while production was small in the PECC region, Malaysia and Indonesia were initiating big-scale programmes to develop biodiesel from palm oil.

"The continuing high or rising oil prices will boost the commercial prospects for alternative fuels while a decline will do the reverse.

"We also think that producing bioenergy or its reproduction is cheaper in the long run. That will make it competitive compare with petroleum," he said.

Last year, Malaysia initiated the National Biofuel Policy to spur the country's biofuel industry.

To date, the government has granted 32 licences to set up biodiesel plants with potential annual capacity of 3.3 billion litres.

-- BERNAMA