KUALA LUMPUR, Oct 4, 2010 (Malaysia) — The government has allocated RM5 million ($1.4M USD) to five petroleum companies to set up blending facilities and infrastructure to support the implementation of B5 biodiesel usage.

“The government is working on it and we have given the petroleum companies RM1 million each via the Malaysian Palm Oil Board. The biofuel plan for next year is still on target.

“The money allocated is for the construction of the blending facilities and infrastructure and there should be no problem for them to complete it by June 2011,” Minister of Plantation Industries and Commodities Tan Sri Bernard Dompok told reporters at the International Palm Oil Trade Fair and Seminar today.

The companies are Petronas, Shell, Chevron, Exxon Mobil and BHP.

The biofuel slated for public consumption next year, will be implemented in stages starting with the central region of the Peninsular comprising Klang Valley, Negeri Sembilan and Melaka.

“When the biofuel policy was first approved, it was only meant for the export market but eventually the external market did not materialise.

“The companies did not envision the country fully supporting the biofuel industry and we are now trying to kickstart the production back on line,” he said.

The B5 biofuel is a blend of diesel with five per cent palm-oil based biodiesel.

Meanwhile, sources said, about 4,000 vehicles in the public sector like the Malaysian Armed Forces (ATM) and Kuala Lumpur City Council (DBKL) has been using the B5 biofuel since February 2009. — BERNAMA