11/08/05 KUALA LUMPUR (Bernama) -- In response to the government's call toproduce and use palm oil-based biofuel, Malaysia Palm Oil Association(MPOA) said that a total of 500,000 tonnes of palm oil would be neededeach year for the purpose.

This is because the fixing of the composition of the biofuel wouldcomprise five percent processed palm oil biofuel and 95 percent diesel oil(B5 Blend).

MPOA chairman Datuk Sabri Ahmad said the mere five percent increase in thesale of palm oil, would result in an additional revenue of RM1 billion inthe industry.

"As many countries race towards reducing Green House Gases by five percentrelative to the 1990 level by 2008-2012, the demand for bio-fuel willincrease tremendously," he said in a statement here Thursday.

Bio-diesel is a solution to the escalating price of fossil fuel and itsinevitable depletion.

Wednesday, Prime Minister Datuk Seri Abdullah Ahmad Badawi announced thethree-pronged plan under the National Bio-Fuel Policy that would in manyways contribute to the nation's economy as well as a healthierenvironment.

Sabri said besides boosting the local palm oil industry, the long-awaitedpolicy would help reduce the country's dependency on fossil fuel.

Bio-diesel refers to chemically reacted vegetable oils to produce themethyl esters which have properties similar to petroleum-based diesel.

Bio-diesel is made from rapeseed oil, soy oil, palm oil, sunflower andother edible oils.

He said Malaysia's move towards bio-fuel would also help stabilise theprice of palm oil as proven in the case of other vegetable oils used inbio-diesel, and that it could be the country's first step towards becominga main producer like Germany, France and Italy.

Sabri also hoped that the government would consider providing incentivessuch as corporate tax rebates for palm oil producers to venture into theproduction of bio-fuel.

He added that it was necessary as companies need to invest heavily inresearch and development (R&D) as well as new machinery and equipment.

-- BERNAMA