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Spire Research and Consulting estimates that biofuel demand in Asia will
grow by more than 50% a year over the next three years. As the region ramps up biofuel production, Singapore will be well-placed to compete
for refinery contracts, but will face competition from producer countries
eager to develop integrated biofuel value chains, such as India, Malaysia
and the Philippines.
According to the World Bank’s World Development Indicators (2006), trade in
fuels totaled US$715 billion worldwide in 2004. Coupled with the fact that fossil
fuel supplies are diminishing at an alarming rate, renewable energy sources are
also expected to compete economically with more conventional energy sources in the long term.
As a successful petrochemical hub in Asia and the world’s third largest oil refining
center, Singapore would be well-positioned to diversify its portfolio to include
biofuel refinery.
Peter Cremer (Singapore), the Asian arm of Germany's Cremer
Gruppe, has already planned to set up a US$20 million plant in Singapore by mid
this year with enough capacity to produce 200,000 tonnes of biodiesel. Natural Fuel, too, announced this year that they have chosen Singapore
as its site for their US$130 million state-of-the-art biodiesel production
refinery. Expected to be one of the largest biodiesel facilities in the world, it is
currently undergoing construction on Jurong Island, Singapore's petrochemical hub, and scheduled to begin production by the end of
2007.
Van Der Horst is building a biodiesel refinery in partnership with the local
Institute of Environmental Science and Engineering. It plans to build a second, similar plant in the country. The first plant, which will cost US$25
million, will be able to produce up to 200,000 tonnes/year of biodiesel from jatropha and other feedstocks, when it opens at the end of 2008. The
second plant will be a similar size when it opens in 2012.
However, other countries in the region are giving the Island Republic a
good run for its
money:
Philippines state-owned PNOC-Alternative Fuels Corp.
recently signed a US$1.3
billion deal with British company NRG Chemical Engineering Pte. to build a biodiesel refinery and two ethanol plants in the
country.
Mission Biofuels is establishing a 100,000 tonnes-per-year biodiesel refinery
at Kuantan Port, Malaysia.
In India, private sector giant Reliance Industries Limited (RIL) set aside
US$500 million to set up a biodiesel refining plant last year and earmarked
200 acres of land at Kakinada in Andhra Pradesh as a pilot project to cultivate jatropha
shrubs.
Engineering firm MPI Group will build
one of the biggest biodiesel refineries in the Asia Pacific region in a deal with East Timor that will create up to 20,000
jobs there. The 250 million litre-a-year biodiesel refinery is planned for
Darwin, Australia, although MPI may be considering other sites in Asia.
Regional countries which have a comprehensive plan to develop biofuel refining
capabilities include India, China, Indonesia, etc. These countries may have the
advantage of being able to build an integrated value chain spanning crop
cultivation to refining. To stay ahead, Singapore will need to leverage its
established fossil fuel logistics sector, its existing refinery base and above all its
government’s ability to act quickly and invest in infrastructure ahead of demand.
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