Writing from Kuala Lumpur, a reporter for Thomson Financial explains that the high cost of palm oil is making biodiesel in Malaysia uncompetitive. As we mentioned earlier this year, Malaysia has other biodiesel problems that are delaying the implementation of the mandatory B5 fuel blends in the country. The latest news is that, of the 91 biodiesel plants that were approved as of a month ago, only four were in operation (another four are being tested). Plantation Industries and Commodities Ministry parliamentary secretary S Vijayaratnam said that, "Based on the high price of palm oil -- which is the raw material feedstock of the biofuel at the moment -- the use of biofuel is not competitive."

Sounds like a mixed blessing. Palm oil for biodiesel is unfriendly to the environment, but using the biofuel is cleaner than straight diesel. Guess things will just continue on as they have been.

[Source: Thomson Financial / Forbes]

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