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    The potential and environmental ramifications of palm biodiesel: Evidence from Malaysia

    Access Status
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    Authors
    Szulczyk, Kenneth
    Atiqur Rahman Khan, M.
    Date
    2018
    Type
    Journal Article
    
    Metadata
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    Citation
    Szulczyk, K. and Atiqur Rahman Khan, M. 2018. The potential and environmental ramifications of palm biodiesel: Evidence from Malaysia. Journal of Cleaner Production. 203: pp. 260-272.
    Source Title
    Journal of Cleaner Production
    DOI
    10.1016/j.jclepro.2018.08.241
    ISSN
    0959-6526
    School
    CBS International
    URI
    http://hdl.handle.net/20.500.11937/71064
    Collection
    • Curtin Research Publications
    Abstract

    © 2018 Malaysia finds itself in a unique position. The large flourishing palm oil industry could produce enough biodiesel to completely offset Malaysia's entire diesel consumption. Consequently, we employ a dynamic, partial equilibrium model of the Malaysian agricultural sector to predict whether palm biodiesel can offset diesel fuel. The model indicates palm biodiesel cannot compete with diesel's price because of the high cost of palm oil. Nevertheless, the government could subsidize biodiesel production at Malaysian Ringgit (RM) 1.09 per liter (or United States Dollar 0.28/liter) since biodiesel could help the government achieves its greenhouse gas (GHG) emission targets in the Paris Agreement. Furthermore, the government should implement two new regulations to boost the GHG efficiency of its agriculture. First, the palm oil mills should treat their palm oil mill effluents (POME) because POMEs emit methane, a potent GHG gas. Second, the government should prevent deforestation. The destruction of rainforests reduces the carbon storage because oil palm trees store half the carbon as pristine rainforests per hectare. Finally, palm biodiesel could lead to greater agricultural employment but induce higher agricultural prices, loss of export revenue, and rising imports.

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