“The ministry will engage in dialogue with Poma soon to discuss on ways to upgrade their mills, in terms of its technology which could reduce carbon emission,” Chin said after opening the Asian Biofuels Roundtable 2009 here yesterday.

He added the discussion would include possible incentives for millers who would upgrade their technology.

“We understand millers are sensitive to costs involved, hence we would explore various ways to address the cost issues,” Chin said.

He also said the ministry may set a deadline for oil palm mills to install methane-gas trapping technology, as part of its bid to meet the European Union’s (EU) proposed targets to cut carbon emission.

According to published reports, the EU had proposed that biofuels produced from renewable sources need to meet the sustainable criteria, which include a reduction of greenhouse gas. The EU said carbon emission by biofuels should be reduced by at least 35% compared with fossil fuels.

“After the dialogue with millers, we may set a target date,” he said, adding that the government would discuss with millers on why they were not able to adopt bio-gas trapping technology.

In his speech, Chin said the EU directive on the renewable energy for biofuels were burdensome to comply with and imposed barriers for biofuels import into the EU countries, in particular palm-based biodiesel.

Since Feb 1, several Malaysia government agencies had imposed the use of biodiesel in their vehicles since Feb 1 this year while privately owned vehicles would have to use palm-based biodiesel by next February.

Chin said his ministry was discussing with oil companies on the infrastructure to supply biodiesel in the Klang Valley.

“The oil companies were very supportive of the (biodiesel) plan, but we still need to work out the logistics and the investments involved for the blending facilities,” he said, adding that these facilities could run “in the millions” of ringgit.

It also planned to expand its biodiesel blending plans in the state of Sabah, Chin said.

“We plan to introduce biodiesel in high-population centres, industrial centres and those areas that already have biodiesel manufacturing units. There are two biodiesel manufacturing plants in Sabah, so we plan to start blending there once (the) logistics are in place,” he said.

However, it may take some time for the programme to kick off given the geographic location of the biodiesel plants and industrial and high population areas in Kota Kinabalu. The biodiesel plants are located in Sandakan and Lahad Datu.

Malaysia exported 182,108 tonnes of palm methyl ester (PME), worth RM610.7 million in 2008. In January this year, PME exports totalled 12,731 tonnes valued at RM30.19 million.

Meanwhile, the Federal Land Development Authority (Felda) will start its oil palm cultivation project, involving some 30,000ha of land in Tefe, Brazil this year, Brazil’s ambassador to Malaysia Sergio De Souza Fontes Arruda said.  

Brazil had offered the land to Felda, which would see it teaming up with a local company there, Braspalma, to develop up to 100,000ha in Manaus and Tefe in Amazonas state. The agreement to undertake the development was signed in September last year.

Felda’s venture into Brazil was part of its plans to expand its presence globally. Felda’s other overseas’ investments include 105,000ha of land in Papua New Guinea and 45,000ha in Aceh, Indonesia.

It has been reported that the agreements would be signed soon. Other Felda investments include biodiesel plants in the US and Canada. It also owns real estate, hotels and restaurants in Saudi Arabia.

This article appeared in The Edge Financial Daily, March 25, 2009.