1/10/05 KUALA LUMPUR,(Bernama) -- Felcra Bhd is in the process ofidentifying biodiesel technology, which can be used to determine palm oilpercentage in diesel, says its chairman Datuk Hamzah Zainuddin.

He said that the proposed five percent palm oil usage in diesel is verysmall and Felcra wanted to increase it.

Based on this percentage, the usage of palm oil in biodiesel is less than180,000 tonnes per year, he told Bernama here.

He said that in line with the effort to identify the most efficient andcompetitively priced technology, Felcra is discussing with the MalaysianPalm Oil Board (MPOB) and European countries as well as China to increasethe percentage of palm oil in diesel.

"Felcra also had in depth discussions with a number of companies, but wehave yet to determine which company wants to cooperate with us," he said.

Apart from price, Hamzah said there should also be a thorough study on thetechnology to be used to ensure that it could expand and increase thequality of diesel to the maximum level.

Compared with vegetable oils, palm oil has high potential not only interms of content, but also in price stability in the world market, hesaid.

"Although palm oil has to compete with other vegetable oils, it has a firmfuture," he said.

Hamzah also said that using biodiesel could help improve the environment.

He said that if all countries in the world agreed with the Kyoto Protocolto reduce carbon content in the environment, it would mean that biodieselwould have huge potentials.

"Using biodiesel will result in a good environment, and as such I feel ithas a good potential," he said.

Felcra currently owned more than 200,000 ha of plantations and isdiscussing with states like Pahang, Sabah and Sarawak to expand it.

"If it is possible, we would like to see the area increasing 10,000 ha peryear. I feel that it will also help in Malaysia's palm oil production," hesaid. Touching on the 2006 Budget tabled in the Dewan Rakyat by PrimeMinister Datuk Seri Abdullah Ahmad Badawi yesterday, Hamzah said that thegovernment is serious in efforts to turn Malaysia into a major globalbiodiesel player.

He said that the Prime Minister, who is also the Finance Minister, wantedto see the new source of energy, including biodiesel, used widely.

-- BERNAMA