Thursday, 11 March 2010

Outlook for biodiesel less than shiny

By Zaidi Isham Ismail

THE outlook for biodiesel this year is choppy given the high prices of its feedstock crude palm oil (CPO) and waning interest, Frost & Sullivan Asian director Chris de Lavigne said.De Lavigne said that in the current world situation, interest in petroleum-based ethanol was down 70 per cent from its highest point in 2008; and in vegetable oil-based biodiesel, down nearly 80 per cent since it was highly realised in 2005.Interest in biodiesel peaked in 2007 and dropped 70 per cent by the end of last year. Its outlook was choppy, de Lavigne said in his working paper, "The future of biodiesel in uncertain markets".He was sharing his views with conference delegates at the annual Palm and Lauric Oils Conference and Exhibition (POC) in Kuala Lumpur yesterday.
De Lavigne said that history would repeat itself as palm oil prices were expected to rise, especially in the next two years, which would result in the commodity being too expensive to be used as biodiesel.He said the price uptrend would be caused by several things happening at the same time.However, he added that biodiesel was here to stay as numerous research and development activities were going on to make the renewable energy source attractive again in the future.He also said that the biodiesel sector needed the support of consistent and coordinated government policies, low raw material but high energy prices, improved feedstocks and advances in technology.