Malaysian palm oil giant Golden Hope Plantations Bhd wants to acquire more vegetable oil refineries in Europe and is currently looking at two or three options, a senior company official said on Friday.
Jan van Driel, regional director Europe, Middle East, Africa, told Reuters in an interview that expansion in downstream activities in Europe as well as the biodiesel sector were on the Malaysian company's agenda.
Golden Hope set foot in Europe in 2002 by acquiring Dutch-based vegetable oil refiner Unimills from Anglo-Dutch consumer goods giant Unilever.
The fast-growing biodiesel market in Europe is also of interest to Golden Hope, van Driel said.
The company has announced plans to build a 200,000-tonne-a-year biodiesel plant in the Netherlands in addition to building two more plants in Malaysia. It launched its first Malaysian biodiesel plant earlier this month.
The Dutch plant is expected to become operational at the end of 2007 and use a variety of vegetable oils, van Driel said.
High crude oil prices and growing use of diesel cars in Europe have made biodiesel produced mainly from rapeseed oil very attractive in the EU, where tax incentives in some countries have further stimulated green fuels production.
From a capacity of less than 50,000 tonnes in 1993, the industry boasted some 3.5 million tonnes of installed capacity last year, making Europe the world's biggest biodiesel producer.
Europe's biodiesel appetite has been the catalyst behind a recent boom in biodiesel projects in Malaysia, the world's largest palm oil producer, and in neighbouring Singapore with the main idea of exporting to Europe.
But van Driel was cautious, saying the use of palm oil in Europe's biodiesel production was uncertain for now as it depended on EU's policies and competition with the food sector.
"Politics is one unknown factor," van Driel said.
Industry analysts expect that countries with strong agricultural lobbies such as France, Germany and Poland would remain protective of domestic industries and try to hinder imports of Asian palm oil biodiesel through possible trade restrictions.
Currently over 90 percent of EU's biodiesel is made from locally produced rapeseed oil. In the long-term, though, the EU would have to use alternative oils to make up for local rapeseed supply shortages and rising prices, van Driel said.
Some European biodiesel producers are converting their plants to start blending rapeseed with cheaper palm oil as well as soybean oil as early as next year.
Van Driel said the debate on the environmental sustainability of using palm and other vegetable oils to produce biodiesel also posed a question mark for palm oil.
"It is very likely that EU governments in particular, but maybe others as well, will introduce sustainability criteria on the use of any oils and fats in the energy sector," he said.
Environmentalists say biofuels - such as ethanol and biodiesel, which turn organic matter into energy - damage biodiversity and can put a squeeze on food needs. They have urged policy makers to set tight sustainability rules.