GREENING MALAYSIA: THE PALM OIL INDUSTRY AND BIOFUEL POTENTIAL

Abstract

The depletion of fossil fuels and the increasing awareness about the reality of climate change has created a surge in the research and development of renewable fuels. Malaysia, being the main producer of palm oil in the world, has ventured into palm oil based biofuels. This thesis discusses the origin, development and potential of palm oil based biofuel industry in Malaysia. Interviewee's in relation to the study included Government officials, Industry players and NGO personnel. The study found that Malaysia's biofuel industry would not enhance the sustainability of the country unless the country walks the talk for sustainable biofuel production practices. Shortsighted planning has marred the vision of the government for the overall sustainability in the country. The biofuel industry in Malaysia is skewed towards an export market. This study found that there is no concrete plan with relevant targets for biofuel in the National Biofuel Policy to be used within the country because the government is bent more on development and economic growth than on environmental protection and sustainability. The findings show that Malaysia currently produces 44% of world palm oil and has 4.17 million hectares of palm oil plantation in the country. Out of the 15.4 million tons of palm oil being produced in the country, 6 million tons is being used as biofuel. Although Malaysia argues that palm oil is the most efficient vegetable oil for conversion to biofuel when compared to other vegetable oils, the growth of palm oil plantations to cater to the increasing demand for biofuel will eat into the existing diverse forests and replace it with a monoculture crop. Increased transparency and stricter regulations at the ground level is necessary to protect the forests in the country. The export of biofuel as the main aim of the Malaysian government is short sighted and likely to be environmentally costly in the long run for Malaysia. The government has to commit to making changes and admitting that there is a problem with the blind rush towards the biofuel industry. There are economic incentives and political considerations for the industry but there are also environmental concerns that need to be addressed before the country takes a giant leap into the biofuel industry.