Vol. 11 (1) March 2011 – OPIEJ

A Study on the Malaysian Oil Palm Biomass Sector – Supply and Perception of Palm Oil Millers

mpob_admin — Tue, 28 Aug 2018 14:02:00 +0000

From 379 palm oil mills in Malaysia that responded to the survey, about 30% or 120 of them were involved in utilising biomass [either empty fruit bunches (EFB) or palm oil mill effluent (POME)] by turning this biomass into EFB fibre, bio-fertiliser or biogas. Nevertheless, some of the millers who have not been involved in ... Read more

Socio-economic and Feasibility Study of Utilising Palm Oil Derived Biofuel in Malaysia

mpob_admin — Tue, 28 Aug 2018 14:00:14 +0000

In May 2006, the Malaysian government introduced the National Biofuel Policy to reduce the nation’s dependence on non-renewable fossil fuels. This study was carried out to determine the feasibility of using palm oil derived biofuel (Envodiesel) in Malaysia in term of socioeconomic impact to both, the government and consumer. Among the parameters studied were the amounts of excess crude palm oil available for palm biofuel blending without affecting local and international consumption of palm oil and financial costing or government savings in term of subsidy from the use of palm biofuel blends (B5, B10, B15, B20, B25) in Malaysia. It is concluded that the supply of local palm oil is enough to cater biofuel usage up to B15 without disturbing supply for other used of palm oil. Furthermore, Malaysian government needed to subsidise nearly RM 4 billion annually in order to keep the price of biofuel remains at competitive level.

Strengthening the Malaysian Palm Oil-based Biodiesel Industry: Solving Current Issues and Impact on CPO Prices

mpob_admin — Tue, 28 Aug 2018 13:58:38 +0000

The palm oil-based biodiesel industry can be considered as a ‘golden egg’ of the Malaysian palm oil supply chain. This is due to the role it plays in improving price scenario of crude palm oil (CPO) as well as creating value addition for palm oil products. This benefits all subsectors in the Malaysian palm oil supply chain. Based on the last four years scenario, total additional income received by oil palm growers was RM 20.835 billion. This scenario adds up another RM 61.50/t or 16% in support of fresh fruit bunch (FFB) prices. Meanwhile, under the Bx implementation programme, price of CPO is estimated to increase by RM 13/t if B1 programme implemented were to be. If the production of palm methyl ester (PME) increased to 0.3 million tonnes (B3) the price of CPO is expected to increase by RM 55/t. The aggressive implementation of biodiesel blending at 5% (B5) would result in the price of CPO to increase by RM 120/t. However, although still at infancy stage, the palm oil-based biodiesel industry has already faced a few challenges. These challenges can be either within the oil palm industry itself or outside the industry. The analysis on cost of PME production in 2009 shows that biodiesel industry is still not viable as producers cannot fully recover depreciation in their operation due to the problem of overcapacity. Meanwhile, the main challenge is the implementation of the Bx programme for the local market. It can be a ’key‘ to the success of the Malaysian biodiesel industry in particular and the whole industry in general. Meanwhile, the challenge from outside the market is beyond the control of the industry as it is difficult to be solved. The challenge is related to rules and regulations from importing countries in order to protect their own products. Meanwhile, palm oil industry itself should always produce palm oil products in a sustainable manner at all levels of production to ensure this industry can sustain in the future.

RSPO P&C – The Challenge of Making the Principles and Criteria Operational

mpob_admin — Tue, 28 Aug 2018 08:43:28 +0000

The Round-table on Sustainable Palm Oil (RSPO) Principle and Criteria(P&C) took effect in 2007. Since then, 5% of the RSPO oil has been certified as ‘sustainably produced’. Nevertheless, deforestation continues at an alarming rate, leading to intensified criticism of the palm oil industry’s practices. This study assesses members’ capacity to comply with the RSPO P&C beyond the moment of certification. Thirty-six companies operating 4.25 million hectares of oil palm plantations generate USD 3 billion in net profit but only two have set up in-house capacity to implement the RSPO P&C. Limited understanding of the RSPO P&C at conceptual level, rather than lack of commitment, is a key weakness amongst the industry stakeholders. Concurrently, environmental NGO often give technical criticism rather than offer broad operational support to the industry, which reduces the general perception of the RSPO P&C to specific regulations that require reactive measures instead of adopting and integrating it conceptually in a proactive manner at the earliest planning stages of the operations. Finally, ambiguous HCV-evaluation and assessments, and lack of a common standard add to the confusion and often leave industry players in unreasonable and costly management situations.