Archive for January 2010

Do three errors mean breaking point for IPCC?

I chanced upon an interesting commentary by a journalist from China named Li Xing. The original piece is published in the China Daily website.

Although this commentary does not mention palm oil, it questions the United Nations IPCC's credibility. The Inter-governmental Panel on Climate Change (IPCC) had, on many instances, relied heavily on "evidence" in reports by pressure groups like Greenpeace and WWF-Europe that blame oil palm planting for deforestation and global warming.

When it was awarded a share of the Nobel Peace Prize in October 2007, IPCC may well have been one of the most respected organisations in the world. Well, that was in 2007. With the recent spate of "Climategate", "Glaciergate" and "Amazongate" exposé, many people are starting to think twice.

Today, Gene J. Koprowski of reported that in the Fourth Assessment Report (AR4), issued in 2007 by the United Nations IPCC, scientists wrote that 40 per cent of the Amazon rainforest in South America was endangered by global warming.

But that assertion was discredited this week when it emerged that the findings were based on numbers from a study by the World Wildlife Fund for Nature (WWF) that had nothing to do with the issue of global warming -- and that was written by activists.

The IPCC report states that "up to 40 per cent of the Amazon forests could react drastically to even a slight reduction in precipitation" -- highlighting the threat climate change poses to the Earth. The report goes on to say that "it is more probable that forests will be replaced by ecosystems ... such as tropical savannas."

But it has now been revealed that the claim in AR4 was based on "a WWF study" by Rowell, A. and P.F. Moore, 2000: Global Review of Forest Fires. WWF/IUCN, Gland, Switzerland, 66 pp. This paper, carried out in conjunction with the IUCN – International Union for Conservation of Nature, barely related to the Amazon rainforest that was written "to secure essential policy reform at national and international level to provide a legislative and economic base for controlling harmful anthropogenic forest fires."

Who are the authors of the WWF report?
Dr Peter Moore is the coordinator of the WWF and IUCN Project FireFight South-East, Asia, Bogor, Indonesia. He works for both organisations. His comments on the Amazon rainforests are interesting, as he is by no means an Amazon specialist – or even a climate specialist. Andrew Rowell, a freelance journalist who writes occasionally for The Guardian and The Independent, has worked for Greenpeace, Friends of the Earth and anti-smoking organisations.

EUreferendum was the first to uncover that the IPCC made false predictions on the Amazon rainforests, referenced to a non peer-reviewed paper produced by an advocacy group working with the WWF.

The reference to the Amazon rainforest can be found in Chapter 13 of the IPCC Working Group II report, the same section of AR4 in which claims are made that the Himalayan glaciers are rapidly melting because of global warming.

How closely was the IPCC’s 2007 report verified? Why did it include such wild scare-claims, many based on unchecked statements by activist groups?

"If it is true that IPCC has indeed faked numbers regarding the Amazon, or used unsubstantiated facts, then it is the third nail in the IPCC coffin in less than three months," Andrew Wheeler, former staff director for the U.S. Senate's Environment and Public Works Committee, told

"For years, we have been told that the IPCC peer review process is the gold standard in scientific review. It now appears it is more of a fool's gold process."

Wheeler, who is now a senior vice president with B&D Consulting's Energy, Climate and Environment Practice in Washington, said the latest scandal calls into question the "entire underpinnings" of the IPCC's assessment and peer review process.

On 31st January, Jonathan Leake of the UK's TimesOnline in his article titled "UN climate panel shamed by bogus rainforest claim" reported that environmental pressure group WWF announced it will launch an internal inquiry into the year 2000 study.

The reporter interviewed Simon Lewis, a Royal Society research fellow at Leeds University who specialises in tropical forest ecology. Lewis described the section of Rowell and Moore’s report predicting the potential destruction of large swathes of rainforest as a mess.

“The Nature paper is about the interactions of logging damage, fire and periodic droughts, all extremely important in understanding the vulnerability of Amazon forest to drought, but is not related to the vulnerability of these forests to reductions in rainfall,” Lewis said. “In my opinion the Rowell and Moore report should not have been cited; it contains no primary research data,” he added.

WWF said it prided itself on the accuracy of its reports and was investigating the latest concerns. “We have a team of people looking at this internationally,” said Keith Allott, its climate change campaigner.

Scientists such as Lewis are demanding that the IPCC ban the use of reports from pressure groups. They fear that environmental campaign groups are bound to cherry-pick the scientific literature that confirms their beliefs and ignore the rest. It was exactly this process that lay behind the bogus claim that the Himalayan glaciers were likely to melt by 2035 — a suggestion that got into another WWF report and was then used by the IPCC.

Georg Kaser, a glaciologist who was a lead author on the last IPCC report, said: “Groups like WWF are not scientists and they are not professionally trained to manage data. They may have good intentions but it opens the way to mistakes.”

By Li Xing of China Daily
While covering the United Nations Climate Change Conference in Copenhagen, I took a morning away from the main venue to attend a forum of "climate skeptics". The speakers presented political, economic, and scientific analyses to counter the series of assessments by the UN Intergovernmental Panel on Climate Change (IPCC).

A few of the skeptics went so far as to suggest that the current international drive to tackle global warming would eventually lead the world into some kind of "energy tyranny". One even showed a video clip of how "energy police" would invade private homes in the American suburbs, unplugging and removing the owners' microwave ovens, television sets, and other appliances.

I left the forum before the morning session ended. I felt that most of the speakers were too emotional and politically charged to be considered objective. But I was impressed by the presentation of Dr Fred Singer, an atmospheric physicist and founding director of the US Weather Satellite Service, who challenged the IPCC findings with his research data.

In the next few days, I talked with several scientists, including IPCC chairman Dr Rajendra Pachauri, and asked them about Singer's data.

All of these scientists brushed aside Singer's arguments, saying that the IPCC's primary finding is indisputable: "Warming in the climate system is unequivocal".

I believed the IPCC reports, which summarize the research of some 4,000 scientists, but I had some serious reservations. For one thing, the IPCC reports contained very little data from Chinese researchers. I was told the IPCC refused to consider Chinese data because the Chinese research was not peer-reviewed.

China is not a small country. Its landmass spans several climate zones and includes the roof of the world. I have to wonder how data from China would affect the IPCC's findings. Several Chinese scientists who have gone over the IPCC report believe that the IPCC may have overstated the link between global temperature and carbon dioxide in the atmosphere.

In a paper published in the December issue of the Chinese language Earth Science magazine, Ding Zhongli, an established environmental scientist, stated that the current temperatures on earth look normal if global climate changes over the past 10,000 years are considered.

Ding's paper highlighted the fact that in its policy suggestions, the IPCC offered solutions that would give people in rich countries the right to emit a much higher level of greenhouse gas per capita than people in developing countries. It in effect set limits on the economic growth of developing countries, which will result in furthering the gap between rich and poor countries."

A series of "climategate" scandals now add more reason to give the IPCC research closer scrutiny. In November 2009, hackers revealed that some scientists had favored data which supports the case for "global warming" in order to enhance their grant proposals.

Just last week, the IPCC announced that it "regrets the poor application of well-established IPCC procedures" in a claim that glaciers in the Himalayas could melt away by 2035. Instead of coming from a peer-reviewed scientific paper, the statement was sheer speculation, the IPCC conceded.

Then over the weekend, more newsreports revealed that the IPCC had misrepresented an unpublished report, which it said linked climate change with an increase in natural disasters.

However, the author of the report, Dr Robert Muir-Wood, clearly stated the opposite: "We find insufficient evidence to claim a statistical relationship between global temperature increase and catastrophe loss." Muir-Wood is not a climatologist, but a researcher in risk management.

I am particularly troubled by the fact that top IPCC officials do not seem to take these revelations seriously. Interviewed by the BBC, Jean-Pascal van Ypersele, vice-chairman of the IPCC, dismissed the matter as a "human mistake".

Many Chinese consider three a breaking point. They could forgive two errors, but not a third. Now that the IPCC has admitted three "human" errors, isn't it time scientists gave its work a serious review?

Palm oil windfall tax to stay, for now

THE government said the windfall profit tax on oil palm planters stays, dismissing calls for a review of the calculation of the levy."The Cabinet has decided that the windfall tax on palm oil be maintained for now," said Plantation Industries and Commodities Minister Tan Sri Bernard Dompok.

Oil palm planters via millers in Peninsular Malaysia are at the verge of having to pay a windfall tax via millers starting January 1 this year when palm oil futures traded above RM2,500 per tonne. The Malaysian Estate Owners Association (MEOA), which represents small-and medium-sized estates of more than 40ha, appealed to the government to review the current windfall tax formula. This is because the calculation of windfall tax assumes all planters make money when palm oil prices in the physical market surpass RM2,500 per tonne.

MEOA president Boon Weng Siew reportedly said it would be more justified if the windfall tax is on actual profits of audited financial accounts, like corporate tax. "This is because not every planter makes tonnes of money as the profitability of oil palm plantations depends on the age and productivity of the trees. A newly-replanted estate would still be losing money even if palm oil prices surpass RM3,000 per tonne."

Oil palm planters in the peninsular have to pay the windfall tax when palm oil prices go beyond RM2,500 per tonne in the cash market. Planters in Sabah and Sarawak, however, only need to pay the windfall tax if the price crosses RM3,000 per tonne.

In the last three weeks, palm oil prices fell as the US dollar strengthened against ringgit. Yesterday, the third month benchmark crude palm oil price slid a further RM62 to close at RM2,407 per tonne on the Bursa Malaysia Derivatives Market.

Asked if he is comfortable with the current palm oil pricing trading above RM2,000 per tonne, Dompok said, "At RM2,400, RM2,500 and RM2,600 per tonne, there's still a margin. Farmers and plantation owners should be happy. When they're happy, I'm happy."

Msia still committed to B5 mandate

MALAYSIA is still committed to selling biodiesel nationwide, despite delays in the plan and a high palm oil price. The government had initially set January 1 as the deadline to sell B5 biodiesel, a mixture of 5 per cent palm oil and 95 per cent diesel at all petrol stations nationwide.

"We're still looking to go for the full B5," Plantation Industries and Commodities Minister Tan Sri Bernard Dompok told reporters after presenting his keynote address on "Outlook and Challenges for Malaysian Commodities at the 12th Malaysia Strategic Outlook Conference organised by Asian Strategy & Leadership Institute in Kuala Lumpur yesterday.

Once the government finalises the price of B5, the fuel will initially be sold in Selangor, Negeri Sembilan, Pahang and Johor. This will happen this year, Dompok said, declining to give a specific date.

The Cabinet needs to decide if consumers will have to pay extra for B5. The fuel has an extra cost of four sen a litre, which is mainly the cost to transport and blend the mixture. "That is in the Cabinet Paper that I'm preparing. The Cabinet will need to deliberate on whether to pass on the extra cost to diesel consumers or to the oil companies or absorb it as subsidy," he said.

Currently, there are a handful of biodiesel plants in active operation. They are spread out in Pasir Gudang, Kuantan, Lumut and Lahad Datu. These plants, which are built at seaports, are far away from towns and cities of high population. It costs extra money to transport biodiesel to the fuel depots to be blended with ordinary diesel. Oil companies like Petronas, Shell, Esso, Caltex and BHPetrol are positive on retailing biodiesel at the pumps, but when it comes to absorbing blending cost at all 36 fuel depots nationwide, they remain hesitant.

"If there was no consideration for subsidy, it would have been easier for the government to implement the B5 mandate," Dompok said.

Four months ago, when palm oil prices were trading at around RM2,200 per tonne, the minister hinted that the government may reduce the biodiesel blend mandate to B3 to save on subsidies. At that time, the subsidy for full implementation of B5 mandate was estimated to cost RM250 million a year.

Sarawak's first biodiesel plant

My colleague Sulok Tawie reports from Kuching, Sarawak.

SENARI Biofuels Sdn Bhd has launched Sarawak's first biodiesel plant at the Sejingkat Industrial Park, near Kuching. The RM80 million plant, which will have the capacity to produce 120,000 tonnes of methyl ester per year, is expected to be fully operational by March this year.

The plant components comprise product storage and feedstock pipelines from ASSAR Refinery to Senari Biofuels and connecting pipelines to the Senari Port.

Senari Biofuels chairman Datuk Abang Khalid Abang Marzuki said biodiesel from the plant will be distributed by petrol kiosks in southern Sarawak by the end of 2010. It will also be supplied to factories and power plants.

The biodiesel plant was launched by Sarawak chief minister Tan Sri Abdul Taib Mahmud. ASSAR Senari Group chairman Tan Sri Bujang Mohammed Nor, meanwhile, said the ASSAR Senari Industrial Complex Dua facility in Tanjung Manis will be completed in 2011.

He said upon completion, people in the central Sarawak region will have access to biodiesel from the Senari Biodiesels plant, probably at the same price as the normal petroleum diesel in the market.

Perks for palm oil millers to be green IPPs

THE government may offer specific incentives for palm oil millers to recycle waste to generate renewable energy and contribute to the national power grid, said Plantation Industries and Commodities Minister Tan Sri Bernard Dompok.

"We're carrying out a comprehensive study to help palm oil millers reduce their carbon footprint and at the same time become green independent power producers (GIPPs)," he told reporters after touring Bell Eco Power Sdn Bhd's biogas power plant in Batu Pahat, Johor yesterday. Also present were Bell Group chairman Dato' Low Boon Eng and chief executive Datin Liana Low.

"This will be in line with the country's overall policy to reduce dependence on fossil fuel. By 2020, we target annual usage of renewable energy to 2,000 megawatts(MW) from just 50MW now."

Dompok said his ministry will work with two other ministries - the Energy, Green Technology & Water Ministry and the Rural & Regional Development Ministry - to streamline new incentives with existing efforts on electrification of rural areas.

According to the Malaysian Palm Oil Board, there are now 417 palm oil mills in the country, of which 117 are in Sabah. Mills emit greenhouse gas like methane from retention ponds after oil extraction. Estate owners can trap methane from the mill sludge and re-use discarded empty fruit bunches to fuel up steam turbines and generate electricity, a renewable source of clean energy. Biomass and biogas technology is available now.

Currently, utility giant Tenaga Nasional Bhd via its Small Renewable Energy Programme buys renewable energy at 21sen/KWh. Bell Group's 60-tonne-per-hour palm oil mill is able to generate 2MW. By selling electricity at 21sen/KWh to Tenaga Nasional, GIPPs like Bell Group get to earn some RM3 million a year.

Not all palm oil millers can do the same as Bell Group because many are located far away from the national power grid and the cost to connect can be formidable. The Ministry of Energy, Green Technology and Water is facilitating RM1.5 billion worth of cheap loans via local banks for the provision and usage of green technologies. While palm oil millers can gain access to this cheap loans, this fund is shared with property developers and home owners looking to build and buy buildings incorporating energy-efficient lightings and water saving toilets.

Palm oil millers have suggested that if the government fund hook-up cost to the national grid and raise power purchase price to 30sen/KWh, the initiative to convert greenhouse gas to electricity for the benefit of neighbouring rural communities can be realised more quickly.

Dompok commented that incentives to encourage palm oil millers to be GIPPs will reinforce the notion that oil palm planting is sustainable. "It is important that we provide scientific evidence that palm oil is produced in a sustainable manner in view of the European Union's Renewable Energy Directive that will impose a target to only accept biodiesel that can reduce carbon dioxide emissions by at least 35 per cent versus fossil fuel," he said.

Currently, Europe considers palm oil produced by plantations that have not installed any greenhouse gas capture facility to save only 19 per cent carbon emissions versus that of fossil fuel. If oil palm estates were to capture and recycle these greenhouse gas, palm biodiesel shipped into the EU will definitely meet the technical qualifications specified under the EU Renewable Energy Directive.

"Also, since this carbon emission savings initiative can help in the electrification of rural areas like in Sabah and create jobs, it will be of national priority," Dompok added.

RAN protesters barking up wrong tree

This news was sourced from Minneapolis Star Tribune.

Rainforest Action Network (RAN) protesters unfurled a giant banner in front of General Mills' corporate headquarters in Golden Valley on Tuesday, 19 January 2010, accusing the food maker of using palm oil from suppliers that destroy rainforests.

About 40 RAN protesters walked onto General Mills' property, held up a banner, and posed for a photograph taken from a hired helicopter. Although security guards arrived to check out the protest, there was no confrontation.

"It was a non-event; they were polite. They seemed to be all about getting a photo, and they left," said General Mills spokesman Tom Forsythe.

Some of General Mills products, like Betty Crocker, Pillsbury, Nature Valley Granola Bars and Yogurt Burst Cheerios do contain palm oil but Forsythe said, the company has committed to using palm oil only from companies belonging to the Roundtable on Sustainable Palm Oil, a group that brings together growers, users, environmentalists and bankers, working toward the goal of a sustainable palm oil supply. Most of the palm oil shipped into the US originate from Indonesia and Malaysia.

"General Mills shares concern about palm oil exports, particularly in regard to expanding into tropical rainforests," Forsythe said, adding that "we have been engaged in the issue with suppliers."

Cargill, which supplies palm oil to General Mills, said in a statement, "We are making important contributions to ensuring that palm oil is grown sustainably throughout the entire palm oil industry. We are committed to sustainable palm oil production."

RAN activists claim growing demand for palm oil in recent years has fueled destruction of tropical rainforests in Indonesia, Malaysia and Papua New Guinea. RAN spokeswoman Margaret Swink called on General Mills "to be more transparent about their standards" in purchasing only sustainably grown palm oil. Until then, she said, "we'll be doing more fun and games to pressure General Mills."

Malaysia to depend less on fossil fuel, says Najib

My boss Mustapha Kamil reports from Abu Dhabi, United Arab Emirates.

MALAYSIA is mapping out a plan to reduce its dependence on fossil fuel, by such methods as increasing usage of energy from renewable sources to 2,000MW by 2020 from 50MW now.

The plan, which forms part of Malaysia's role in the global effort to cut carbon emission and improve global energy security, was highlighted by Prime Minister Datuk Seri Najib Razak in a keynote address at the World Future Energy Summit which started in Abu Dhabi yesterday.

Najib's address, which painted a gloomy picture if the world continued to ignore the negative impact excessive carbon emission was having on global climate change, could not have come at a better time since the world had been experiencing some of the most extreme weather patterns ever recorded. The northern hemisphere is facing one of its harshest winters in history.

He said Malaysia had introduced several incentives to promote renewable energy, including the Small Renewable Energy Programme which provided for a higher purchasing price for electricity generated through renewable energy resources by the grid operator. "We are in the process of instituting a renewable energy law and one of the mechanisms we are looking into is feed-in tariffs to promote usage of this type of energy."

Feed-in tariffs is a mechanism which guarantees that energy generated through renewable sources is purchased by the national grid operator. It has worked successfully in Europe and is being practised in more than 60 countries. He also spoke of Malaysia's plan to increase the use of solar power through the "Suria 1000 Programme".

Reminding the developing economies to make their energy industries more efficient amid increasing energy prices and harmful emissions, Najib said Malaysia had commissioned a study to restructure and realign its energy sector. Malaysia established the Energy, Green Technology and Water Ministry in early 2009, essentially to transform the country into a green nation.

"We will be looking at four main sectors to implement green technologies, namely energy, transport, buildings and water. "To benefit from a green economy while reducing carbon footprint, Malaysia has launched the National Biotechnology Policy and the National Biofuel Policy in 2005. The policies seek to leverage on the natural strengths of Malaysia where at least 50 per cent of land area remains forested.

"Our embracing of green technology is not only to conserve our resources, but also to act as a new economic impetus for Malaysia." He said the international community failed to seize the opportunity at the last summit on climate change in Copenhagen as they did not manage to face the issue decisively.

Najib, here on a working visit, was scheduled to visit Dubai, an emirate in the United Arab Emirates. He was scheduled to meet UAE Vice-President, Prime Minister and Ruler of Dubai Sheikh Mohammad bin Rashid Al-Maktoum and tour the world's tallest building, the Burj Khalifa.

Why palm oil does not deserve its bad press

Southeast Asia’s palm oil industry is under sustained attack in the West. TIM WILSON says the consequences of a consumer boycott are poverty for smallholders and more environmental damage as producers switch to alternative lower-yielding crops.

RECENT campaigns against palm oil show non-governmental organisations are more interested in pandering to rich country donors than promoting sustainable economic and environmental development for Southeast Asia's poor.

Following attacks from palm oil industry interests in November last year, the chief executive of NatureAlert, Sean Whyte, claimed "Non-governmental organisations don't want to see it (the palm oil industry) closed down and neither are they seeking a boycott of palm oil", but to see it prosper without doing "damage to the environment".

In making such claims, however, Whyte clearly cannot see the oil palm from the plantation. In Australia and New Zealand, NGOs have convinced celebrities, television stations and taxpayer-funded zoos to campaign for government regulation requiring manufactured food products to label palm oil ingredients separately from vegetable oils. Their objective of mandatory labelling is to encourage consumers to choose products that don't contain palm oil and effectively introduce a consumer boycott.

The NGO campaign has had some success, with Australian Senator Nick Xenophon recently announcing he would introduce legislation directing the bi-national regulator, Food Standards Australia New Zealand, to require compulsory separate palm oil labelling.

With mandatory palm oil labelling in force, supported by consumer boycotts, food manufacturers will be faced with the business reality of either losing sales or switching to other oils in manufacturing to keep customers.

It's a decision confectionery manufacturing giant Cadbury made last year after NGOs identified they were using palm oil in their chocolate products and encouraged a consumer boycott, leading Cadbury to dump palm oil as an ingredient.

In Europe, NGOs have gone one step further and successfully lobbied to introduce Europe-wide regulations blocking palm oil biofuel imports unless they meet strict emission standards. In developed countries, NGO campaigns often prey on the ignorance of well-intentioned donors who aren't confronted with the consequences of NGO policies on out-of-sight and, therefore, out-of-mind rural workers.

NGOs then add images of "cute" orang utans whose habitats are claimed to be lost to palm oil-caused deforestation, to encourage donors to open their wallets. But garnering donor sympathy to fight the palm oil industry comes at the expense of the exports and livelihoods of the more than 40 per cent of Malaysia and Indonesia's smallholder oil palm growers who rely on the crop for their incomes.

In total, at least two million Malaysian and Indonesian workers depend on the palm oil industry for their livelihoods, including from the large plantation communities that make up a majority of the planted oil oil palm, who don't just provide salaries for workers but also heavily, or wholly, subsidised healthcare, housing and education services.

Attacks on the industry also ignore the clear benefits of palm oil. At a side-event at the United Nations Copenhagen climate change conference, critics attacked palm oil because, like many other comestibles, it may contribute to the contraction of diabetes.

But palm oil is also a rich source of vitamin A and, according to the United Nations Children's Fund, each year a million infant deaths are caused by vitamin A deficiencies.

But there's no choice between accepting one million preventable infant deaths and allowing the consumption of palm oil that may lead to the contraction of a manageable chronic disease later in life.And the crop is also substantially more sustainable in comparison with other oils because oil palm yields at least five times the same tonnage per hectare as equivalent oilseeds. As a consequence, oil palm needs less land and less resources to produce more.

The irony of the attacks on the oil is that if activists were successful in blackballing its use in food manufacturing, producers would have to switch to alternative lower-yielding crops to maintain their livelihoods. The consequence would be that they would require more land and more resources to produce less.

Palm oil isn't perfect and it is responsible for some deforestation caused by rogue growers. But the benefits of palm oil far outweigh the costs. NGOs may think that eliminating consumer demand may remove the environmental consequences caused by the industry, but attacking the root of environmental degradation won't be solved by attacking palm oil.

Around the world, the key driver of environmental degradation is rarely a single industry, but poverty. When urban and rural communities are poor, their best escape option is through the exploitation of primary natural resources that promote economic growth and drive the development of manufacturing and service industries.

Without the development of these industries, communities will always be trapped in subsistence living, where the environment will always come second to families finding ways to stay alive and secure food and shelter, especially in rural areas.

Protecting the environment only becomes a priority when societies prosper and can afford environmental protection regulation and the resources to sustainably manage and conserve their natural assets.

Anti-palm oil NGOs like NatureAlert, Greenpeace, Wetlands International and Friends of the Earth may think demonising palm oil will help Malaysia and Indonesia improve their environmental health. But any short-term environmental improvements will be traded off against the livelihoods of the rural poor, who would be better able to protect their environment when they have economically developed and can afford to do so.

The writer, Tim Wilson is director of the Sustainable Development Project at the Institute of Public Affairs based in Melbourne, Australia.

Oil palm companies should build biomass power plants

This newsreport was published in Berita Nasional Malaysia (Bernama) website.

SANDAKAN, 14 Jan 2010-- Large oil palm plantation companies are being encouraged to generate electricity using empty fruit bunches (EFB). This is to overcome the shortage of electricity supply in Sabah.

Minister of Energy, Green Technology and Water, Datuk Seri Peter Chin Fah Kui said the effort is important as the use of EFB can help overcome the shortage of electricity, especially on Sabah's east coast.

He said the oil palm industry in the state was among the biggest and surely the EFB from it can be recycled to generate electricity.

"If large plantation companies use EFB as one of the fuel sources to generate electricity for their factories, it will help in efforts to overcome power shortage problem in the state," he told reporters after visiting the Main Intake Substation at Buli Sim-Sim, Sandakan here today. The substation has 20 sets of mobile power generation sets with the ability to produce 20MW of electricity and has been operational since last year.

According to Chin, if necessary, it will be made mandatory for large plantation companies in the country to build biomass power generation plants to process the EFB at their respective factories.

"I will forward the proposal to the Minister of Plantation Industries and Commodities Tan Sri Bernard Dompok, as one of the long-term plans to overcome the shortage of electricity in Sabah," he said.

In Sabah, there are five biomass power generation plants processing the EFB and only three sell electricity to the Sabah State Electricity Board (SESB) under the Renewable Energy Power Production Agreement (REPPA). The three plants are Kina Biopower Sdn Bhd and Seguntor Bioenergy Sdn Bhd, both operating here and the other being, TSH Bioenergy Sdn Bhd in Tawau.

Outlook mixed for palm oil

CRUDE palm oil (CPO) prices could fall temporarily on news that the commodity's stock hit a 13-month high before rising again as demand from China kicks in, traders said.

The Malaysian Palm Oil Board reported yesterday that December palm oil stocks surged 15.7 per cent to a 13-month high of 2.24 million tonnes as demand fell faster than production.

"The latest set of numbers was quite scary. Exports were lower and stock levels were higher than our estimates. There is an immediate bearish reaction and prices slid. We think, at most, prices could fall to RM2,550 per tonne," brokerage Oriental Pacific Futures Sdn Bhd's executive director Ricky Chin said.

In a separate telephone interview from Singapore, a senior trader remarked that the December stock of 2.2 million tonnes was surprisingly high and he was seeing more commodity funds back in the market.

The funds were said to be instrumental for palm oil prices reaching a record of more than RM4,000 a tonne in 2008 as these big investors rushed to find secure investments. "We're starting to see more speculative play than physical demand. The funds are back in the markets. They'll push prices up and down with more volatility," he said.

Yesterday, third month benchmark palm oil futures traded on the Bursa Malaysia Derivatives market fell RM41 to close at RM2,585 per tonne.

Still, palm oil traders and futures brokers think prices could rise as high as RM2,900 per tonne by March.

In the next few weeks, however, we anticipate more buying from China as the demand for cooking oil heightens in preparation for the Lunar New Year," Chin told Business Times. He thinks palm oil is likely to trade at a higher band of between RM2,800 and RM2,900 per tonne in the longer term.

A trader with a multinational oil palm plantation company in Kuala Lumpur, however, had a lukewarm outlook. "At present, the futures market is rather quiet. There's not much movement. Maybe it is because it is still early in the year," he said.

"But as we enter into low crop months, we may see lower stock levels in January and February. In the short term, we can expect palm oil to trade sideways at between RM2,500 and RM2,700 per tonne."

Cooking oil price to go up?

My colleague Vasantha Ganesan reports on cooking oil subsidy.

KUALA LUMPUR: Will the cooking oil subsidy be the next to go after the end of the bread subsidy? The government is reviewing the subsidy, which costs the government about RM1 billion annually.

Beginning this year, the government removed the subsidy on white bread, saving RM89 million in hand.

The secretary-general of the Ministry of Domestic Trade, Cooperatives and Consumerism, Datuk Mohd Zain Mohd Dom, said the ministry has started talks with the Ministry of Plantation Industries and Commodities on the matter.

"Our ministry started discussions with the Ministry of Plantation Industries and Commodities late last year to study the future of subsidy for cooking oil," Zain told the New Straits Times.

The price of cooking oil depends on the international price of palm oil. The average price of palm oil last year at RM2,300 per tonne was lower than in 2008 at RM2,800 per tonne. But this year, the average price is expected to increase to around RM2,600 per tonne. Zain, however, did not say if rising international palm oil prices meant the government would altogether remove the subsidy for cooking oil or reduce the quantum of subsidy.

For the first 11 months of last year, the government subsidy of cooking oil was RM900 million. Based on data from the ministry for the June-December 2007 period, the subsidy was RM398.74 million while in 2008, the government spent RM1.18 billion in cooking oil subsidy.

The government has been forking out subsidies for essential items like petrol/diesel, liquefied petroleum gas (LPG), general purpose flour, cooking oil and the Super Tempatan series of 5 to 20 per cent of broken rice.

The government started to subsidise sugar last year and it cost RM720 million. Rising international raw sugar pricing had forced the government to reduce subsidy. Since January 1 2010, sugar retail price went up 20 sen per kg. At this price, the government is estimated to spend RM1.008 billion in sugar subsidy this year. Had it not increased the price of sugar, the government would have to pay RM1.26 billion.

It is understood that the RM89 million saved from the removal of white bread subsidy would be channelled to subsidise sugar.

Msia Green Technology Financing Scheme

I was browsing Energy, Green Technology and Water Minister Dato' Seri Peter Chin Fah Kui's blog and I came across this - cheap green loans that will benefit NEW energy-efficient palm oil mills, bio-fertiliser, biodiesel, biomass and biogas plants which have not been funded and partly funded.

Budget 2010 established the RM1.5 billion Green Technology Financing Scheme to encourage supply and usage of green technologies. This scheme benefits companies who are producers (max of RM50 million for 15 years) and users (max of RM10 million for 10 years) of green technologies.

The Government will bear 2% of the total interest/profit rate and guarantee 60% of the green loan via Credit Guarantee Corporation Malaysia Bhd (CGC), with the remaining 40% financing risk to be borne by participating banks.

The Green Technology Financing Scheme application forms are available at Pusat Tenaga Malaysia (or Malaysia Energy Centre) at Bandar Baru Bangi, Selangor. The GTFS HOTLINE is 1-800-88-4837. Please click here.

Registrar: I never singled out SAM

PUTRAJAYA: Registrar of Societies (ROS) Datuk Mohd Alias Kalil said he never singled out Sahabat Alam Malaysia (SAM) in his statement on the possible action faced by non-governmental groups for going against national interests.

Mohd Alias said his statement should also not be taken as a “threat” aimed at stopping the environmental body from carrying out its work. He said he was merely responding to a general question from reporters on the steps that ROS could take on such a complaint, one of which could be the NGO’s deregistration if the claims proved to be true.

“Conducting an investigation and taking action if such claims were proven true are part of our standard operating procedure. That’s what I was trying to explain. One of the journalists only raised SAM later, and I told them that it too would have to undergo the same process.

“And I had made it clear then that I had not received any formal complaint against SAM. Of course, we will not investigate or take action against any NGO unless there is a complaint,” he said when contacted here yesterday.

Mohd Alias had been quoted in Miri on Monday as saying that SAM could face deregistration if there was proof that it was engaging in activities threatening the nation’s interests and that ROS was also monitoring non-governmental groups, which were acting “extremely.” SAM has been involved in activities against commercial logging, plantation development and the building of dams in the country.


"Not a front for campaign"
KUALA LUMPUR: Global Environment Centre (GEC) is not funded to act as a front for an anti-palm oil campaign, its director Faizal Parish said.

He said this in reference to the report titled "Credibility of green groups questioned" which appeared in the New Straits Times yesterday. "This article mentions the Global Environment Centre and implies that we're funded to act as a local front for WWF and Wetlands International as part of an anti-palm oil campaign," he said.

Faizal added that GEC was working with many government ministries, agencies and the private sector to develop solutions to the environment and natural resource management problems such as river pollution and trans-boundary haze.

Separately, Wetlands International head of office in Malaysia Alvin Lopez said, "the article alleges that Wetlands International receives funding from WWF to fund anti-palm oil campaigns. Wetlands International does not conduct 'anti-palm oil' campaigns and we're not financially supported by WWF."