Crude oil rises sharply on improving economic outlook
Based on an improving global economic outlook, the crude oil price has risen sharply so far this year, and in the last week especially. In this note we revisit the biodiesel investment theme that drove a bullish CPO price run in 2006-08.
Challenges to boost biodiesel demand in Malaysia
Despite the recent jump in the crude oil price, biodiesel demand in Malaysia should remain lacklustre. The key issues are that mineral diesel is subsidised in Malaysia and there is no consistent subsidy for palm biodiesel. We also think the government is more likely to be concerned about the budget deficit than to commit extra funds to subsidise the biodiesel industry.
Non-tariff barriers hinder palm biodiesel expansion in the EU
Although biodiesel in the EU benefits from a lower tax than mineral diesel, the union has not approved it as a biofuel because palm biodiesel does not meet the EU’s minimum threshold greenhouse gas reduction rate of 35%. Palm biodiesel can still be exported to the EU, but only on a case-by-case basis.
We remain negative on plantations
Our conclusions: despite the recent rise in the crude oil price, we remain negative on plantations. Compared to a few years ago, opinion has turned more cautious about the use of vegetable oil-based biodiesel as a solution to energy/greenhouse gases. In addition, many governments around the world now face budget deficits, placing further disincentives on subsidising biodiesel.
Tidak ada komentar:
Posting Komentar