It is believed that the continuous growth of the renewable fuel will promise relief to the high demand, while there is a receding supply of petroleum.
At present Biofuel market worldwide has set the price of biodiesel ranging between 21 cents and 32 cents more per gallon than standard diesel.
The market research report namely “Biofuel Market Worldwide (2006)” by RNCOS tells that between 2002 and 2004, the biodiesel production in the US has nearly doubled from 16 million gallons to 31 million gallons.
Europe meanwhile is still the leader in global bio-diesel production. Germany, France, and Italy combined produce nearly eighteen times more bio-diesel than the entire United States.
Other non European nations, from India to Australia and Japan are also busily expanding their bio-diesel industries.
In Vietnam, the government is now compiling a scheme on intensifying bio-fuel production and application to serve its transport industry, ensure energy security and better protect environment from now to 2020, according to Vietnam’s Industry Ministry.
Under the scheme drafted mainly by the Science and Technology Department under the Industry Ministry, Vietnam will, from 2006 to 2010, raise public awareness about bio-fuel, access foreign advanced bio-fuel-related technologies, build infrastructure for distributing the fuel in some localities, and produce 30 million liters of ethanol and 20 million liters of bio-diesel on a trial basis.
In the 2011-2015, the country will develop facilities to produce and distribute bio-fuel, apply gene and related technologies in turning out more materials needed for the production like cassava, sugarcane, potato, soybean, peanut and pineapple, and master some technologies necessary to bio-fuel production.
In 2020, Vietnam will master all advanced technologies necessary to the production so that it can make five billion liters of ethanol and 500 million liters of bio-diesel each year.
To this end, the Vietnamese government should fully or partly cover expenses regarding research and development, manpower training and technology transfer, and encourage experts to engage in bio-fuel production, according to the ministry.
According to estimation of local transport experts, Vietnam will, between 2002 and 2010, see annual rise of 13-17 percent in the number of road transport means. Specifically, estimated annual growths in the number of cars, buses and trucks are 13-18 percent, 16-22 percent and 13-14 percent, respectively.
In Malaysia, the government has announced the introduction of a National Biofuel Policy on August 10 2005, according to a study.
The policy is primarily aimed at reducing the country’s fuel import bill, promoting further the demand for palm oil which will be the primary commodity for biofuel production (alongside regular diesel), as well as to shore up the price of palm oil especially during periods of low export demand.
Malaysia’s National Biofuel Policy (interchangeably known as the National Biodiesel Policy) introduced by the government basically entails a four-prong strategy, which encompass:
1. Producing a bio-diesel fuel blend of 5% processed palm oil with 95% petroleum diesel.
2. Encouraging the use of biofuel among the public, this will involve giving out incentives for oil retail companies to provide biodiesel pumps at stations.
3. Establishing an industry standard for biodiesel quality, this will be the responsibility of SIRIM.
4. Setting up of a palm oil biodiesel plant, which is targeted to be built in Labu, Negri Sembilan.
The report added tha the Malaysian government will also set up a demonstration mill for the production of biofuel for cold climates, which is a strategy for the marketing of Malaysia’s biofuel in the export markets.
The government will also award a contract to a plantation company to ensure a consistent supply of palm oil for the production of palm oil biofuel.
It will also provide some sort of incentive to automotive companies to produce biofuel-ready engines. To encourage the use of biofuel on a trial basis, oil companies will be asked to cooperate with the Malaysian Palm Oil Board (MPOB) to create pioneer kiosks.
In the longer term, the National Biodiesel Policy will include establishing a national Biofuel Industry Act as well as providing several more incentives.
Need for alternative fuel
Another reason for introducing the policy is the need for the Malaysia to develop alternative fuels.
This is especially crucial now in an environment of high oil and gas prices.
The primary initiative of the Policy, and which is the prerequisite for the other measures in the policy, is for the country to start the blending of diesel with palm oil based biodiesel to power cars and electricity generators.
Diesel, which is heavily subsidized by the government, will be mixed with 5% palm oil biodiesel before being sold to consumers.
The government envisages that Malaysia will be able to cut its diesel imports by 500,000 tonnes a year as a result of producing the new palm oil biodiesel product.
Market opportunities At the same time, having our own blend will give us an edge to cater to the growing global demand for biofuel.
For example, ethanol, which is an alcohol-based alternative fuel produced from biological feedstock such as sugarcane and corn, is already used in many countries, such as in North and South America.
Brazil, the world's second largest producer of soybean, has passed a Bill making it compulsory to produce a 2% bio-diesel fuel blend, made from castor oil and soyaoil.
This percentage will be increased to a 5% blend (i.e., 5B) in 2008.
Brazil has indicated its aim to increase production capacity in edible oil refinery since a 5% bio-diesel blend requires 2.2 million tonnes of additional edible oils per year.
In addition, rapeseed oil is being substituted for fuel in Europe, while the US plans to increase the use of soybean oil as a source for biofuel, as indicated in its new Energy Bill.
Edible oils analysts, meanwhile, indicate that European countries use rapeseed oil more for bio-diesel than for processing into edible oil.
For Malaysia, it is envisaged that the palm oil diesel blend will receive strongest demand from countries such as Japan and South Korea.
Malaysia is already set to invest in large-scale biodiesel plant with Petronas planning to build a 200,000 tonne per year methyl ester plant within the next three years.
