The Edge, 20 July 2006

M'sia, Indonesia to allocate 6m tonnes of CPO each for biofuel a year

By Kevin Tan

Malaysia and Indonesia have agreed that each country allocates six million tonnes of crude palm oil (CPO) annually as feedstock for producing biofuel.

Malaysia’s Minister of Plantations, Commodities and Primary Industries Datuk Peter Chin Fah Kui said yesterday that the allocation of CPO would address manufacturers' concerns about lack of CPO for biofuel production.

Chin said the government had approved 43 projects for biofuel production, which would require 4.3 million tonnes of CPO feedstock annually. There were 98 applications, he said in Putrajaya.

“Based on this, the Cabinet set a ceiling on how much we can commit,” he said. The minister added that Malaysia produced 15 million tonnes of CPO a year, and there would be sufficient CPO for other oleochemical products.

The agreement to set the target was one of the initiatives of the joint committee meeting on bilateral cooperation on commodities between Malaysia and Indonesia in Medan on July 18.

Both countries also agreed to set up a fund to counter anti-palm oil campaigns. “Each country agreed to contribute 500,000 euros (RM2.32 million) for this purpose,” Chin said.

Among others, the fund will be used to engage an international public relations firm to draw up a programme on the matter.

He said Malaysia and Indonesia had also agreed to strictly implement policies of banning open burning to contain the occurrence of haze.

Malaysia was also trying to increase its CPO production to 18 million tonnes a year by 2010, Chin said. Besides increasing the country’s oil palm plantation size to the maximum of five million hectares from the current 3.9ha, Malaysia had embarked on a programme to increase yield.

He said the ministry's objective was to increase productivity to 25 tonnes of CPO from 35 tonnes of fresh fruit bunches (FFB). “Now we only produce about 20 tonnes of CPO from 35 tonnes of FFB,” he added.