19/08/2008 (Bernama), Kuala Lumpur - Usage of Envo diesel, a palm-based biofuel, can start this year if the crude palm oil price (CPO) remains at below RM3,000 a tonne, Deputy Minister of Plantation Industries and Commodities A. Kohilan Pillay said today.

"If the crude palm oil price is below RM3,000 a tonne, it will be commercially viable, but if it is more than RM3,000, it will be difficult," he said after opening the First International Conference on oil palm biomass.

CPO price is currently hovering at RM2,500 a tonne.

Kohilan Pillay said envo diesel would still be subsidised as its price had to be the same as diesel but it was an alternative for consumers as it was more environment-friendly. Diesel is being sold at RM2.58 a litre.

Envo diesel, a mixture of five percent processed palm oil and 95 percent petroleum diesel, will be used in stages, starting with selected government vehicles and later moving on to public use.

The CPO industry has entered a bearish stage with prices remaining soft due to external factors such as soyoil and crude oil prices.

In view of falling prices, industry experts had called on the oil palm industry to play a greater role in carbon trading and biomass.

Kohilan also called on the industry to seize the opportunities in biomass and trading in carbon credits.

"Ever since carbon trading was introduced as an instrument under the Kyoto Protocol to mitigate the global increase in greenhouse gas emissions, many projects in the oil palm industry qualify for support to earn carbon credits," he said.

Asked whether there would be a change in the Windfall Tax threshold price, he said there was no decision yet.

Planters were reported to have asked for a higher threshold price to calculate windfall tax on oil palm companies in view of falling crude palm oil prices.

They had asked for crude palm oil threshold price of RM2,500 a tonne, revised from the current threshold price of RM2,000 a tonne.