POINTERS: Outlook for Global Biodiesel Supply and Demand for 2013

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Questions & Answers (7) :

Samsudeen Ganny

11 years ago

Dear Hafidz, 1. The market for biodiesel in Malaysia can be said relatively although not in proportion divided into (a) transport (b) industrial ( c) fishing sectors. It is the intention of the government to mandate B5 progressively nationwide in the transport sector by July 2014. Also the drive to promote in other sectors are also done in parallel by which more CPO will be taken out from the stock pile. The challenges to the industry in transport sector is to increase to B10. Although continental vehicles can consume more than 10% of biodiesel in diesel but Japanese cars had it's limitations. The Japanese Automobile Manufacturers Assosciation ( JAMA) can only allow max up to 7% (B7) to guarantee the warranty are not affected. Therefore at this present moment the B10 to be aggressively promoted in the industrial sector and for it there is a subsidy of RM 300 per ton given to the consumer ( industry). 2. There are market for B10 and at the present time it not a mandate but voluntary. The industry players are skeptical as to the usage of the B10 in their plant equipment like boilers, generator sets, tractors, lorries, and etc. MPOB is also checking with manufacturers ( different brands) on the warranties. The latest report from EU that biodiesel are very good in respect to performance and maintainability of the combustion engines. The Malaysia Palm Oil Board ( MPOB) with Malaysia Biodiesel Association ( MBA) are working with various agencies and authorities in promoting the B10 in the sectors mentioned above.

POINTERS SECRETARIAT

11 years ago

Dear Mr Samsudeen Ganny. Q1) With the biodiesel B10 programme going ahead next year, the issue now is that vehicles marketed in Malaysia cannot accept a B10 blend. Similarly, this blend is not acceptable in most of Asia. So, what is the market for this? Q2) Are there markets that can accept a B10 blend? 3. ) If not, why is there a push for B10 and is there a market for it? ( These questions are e-mailed to the POINTERS secretariat by Hafidz Baharom of Business Writer – Focus Malaysia)

Samsudeen Ganny

11 years ago

Dear Sarala, The challenges of biodiesel is in the export market to Europe. The window for export is only in summer and palm biodiesel is not a winter grade fuel as compared to rapeseed biodiesel & etc. With the current market conditions no biodiesel producers would like to invest in additional capital expenditures to produce winter grade fuel. There is a wind of change in Europe with the anti dumping penalty imposed on Indonesia biodiesel and CPO tax structure in Malaysia there are hopes for better returns in this business. To correct the understanding jet fuel is not a high grade neither the biodiesel or blended diesel is low grade. It is in the fossil fuel cracking operations the oils are derived from. In fact the cheapest raw material like biodiesel produced from jatropha is being tested in the aviation industry. As stated above palm methylester ( biodiesel) had its challenges in the cold temperature. Therefore flying at higher elevation the temperature is very low in the atmosphere and palm biodiesel is not suitable. The latest report from EU is that biodiesel are very good for combustion engines in respect to performance and maintanibility of engines. I hope to share the findings later in my next review.

Sarala Aikanathan

11 years ago

Dear Mr Samsudeen Ganny: What do you think is the best strategy to get the high returns for Malaysian biodiesel. Should the Malaysia palm oil biodiesel producer focus on jet fuel or lower fuel grade production?

Samsudeen Ganny

11 years ago

1. Presently the mandate is B5 for nation wide and it's implementations are in stages basing on regions namely central, southern, northern and eastern in Peninsular Malaysia and East Malaysia. There are plans to increase it to B7 to meeting the automobile industry standard. As for B10 it is a voluntary for industries. There is a subsidy of RM 300 per ton to encourage the usage in their boilers, generator sets and etc. Petroleum companies terminals can blend maximum of 10% of bioidesel in diesel. Discussions are being held between biodiesel producers, petroleum companies and MPOB on the logistics and subsidy in East Malaysia in respect to the infrastructure conditions for logistics. 2. The roll out of B10 is mentioned above. The consortium Malaysia Biodiesel Sdn Bhd understood was approved under the NEAC for three prong strategy for CPO stock inventory control, manage the downtrend of CPO price of late and to revive the bioidesel industry. A consultant was appointed to prepare out the framework and structure of it's activity and believe that the new Executive Chairman Ybhg Tan Sri Sabri Ahmad will make the announcements on it's mechanism and modus operandi.

POINTERS SECRETARIAT

11 years ago

How would the distribution of B10 be like? Since B10 will be blended into diesel by the petrol companies, I assume that the petrol companies would be the ones distributing the blended diesel to northern and southern region using their container trucks? Is that right? What about the arrangement for Sabah and Sarawak where the transport system is poor? How much funds have been allocated to subsidise B10? ( This question was e-mailed to the POINTERS secretariat by a member of the palm oil industry)

POINTERS SECRETARIAT

11 years ago

What’s the progress on the roll out of B10 biodiesel? What is the actual business activity of Biodiesel Consortium Sdn Bhd? What is the pricing like ie what would the price be when planters sell biodiesel to Biodiesel Consortium and what would the price be when Biodiesel Consortium sell to the petrol companies? ( This question was e-mailed to the POINTERS secretariat by a member of the palm oil industry)