According to an Asian biodiesel pioneer Long Tian Ching, Managing Director of Singapore's Vance Bioenergy, the palm oil biodiesel business may not be as lucrative as some people believed. His company is one of the largest companies involved in the manufacture of biodiesel from palm oil. He is bullish on the future prospects for biofuels and biodiesel but not as bullish when it comes to price and profit margins. According to him, escalating prices for raw materials have significantly eroded profit margins.
A year ago, things were different. Palm oil prices were relatively lower, while crude prices were soaring. Now it is the other way round, and not surprisingly, that is not good news for palm-based biodiesel producers.
In addition, Europe, one of the major consumers of diesel and biodiesel, has always viewed palm-based biodiesel with a bit of scepticism as the region is more familiar with fuel from rapeseed and soy. The other criticism for palm based biodiesel is something that many other energy crops are suffering from as well - widespread deforestation and disruption of wildlife
The above summary was based on an article in Dow Jones, Feb 27
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