26/08/2008 (Bernama), Kuala Lumpur - Malaysian palm oil producers should provide comprehensive traceability report of their production to comply with the European Union's new directive on renewable energy to better penetrate the market there.

The new directive would likely include sustainability and Green House Gas criteria that would influence market direction for biodiesel.

Ilmari Lastikka, Stakeholder Relations Manager in renewable fuels division with Neste Oil Corporation, said in Europe, companies cannot use palm oil as biodiesel unless they showed traceability of palm oil that had been used.

He said the biodiesel industry in developed countries want to know the origins of the biofuel or biofuel feedstock and detailed characteristics of its sustainability.

Neste Oil, which currently produces renewable diesel using palm oil as its feedstock, has been using segregation process as one way to show the traceability process of its feedstock.

"In future, we would need to do more than that. For example, by having the RSPO (Roundtable on Sustainable Palm Oil) certificate is one way to comply to that," he told reporters on the sidelines of the Second International Palm Oil Trade Fair & Seminar here Tuesday.

By having the RSPO certificate, palm oil exporters could penetrate into the European market as the certification confirms that a company had adhered to sustainable practices in the planting of oil palm and production of palm oil.

Lastikka, one of the seminar speakers, spoke about EU policies on renewable energy and biofuel sustainability.

He said part of the proposed EU sustainability criteria for the new directive would not permit the use of raw material from high biodiversity areas such as rainforest.