Malaysia's biodiesel exports to the European Union nearly doubled to 24,696 metric tons in 2007 from 12,598 tons a year earlier, but absolute numbers continued to remain low due to high prices of the feedstock crude palm oil, said a government official.
"There hasn't been much growth in terms of volumes because the cost of feedstock is prohibitive," the official said earlier this week.
He said rapeseed oil is still the dominant feedstock to produce biodiesel in the E.U.
The E.U. produces around a third of the world's rapeseeds and uses 60% of its rapeseed oil to produce biodiesel.
The region is one of the largest importers of palm oil by volume, to bridge a shortfall in its cooking oil requirements.
"Malaysian suppliers are just executing biodiesel export contracts finalized several months ahead of shipments, when prices were low," said an official at a Malaysian biodiesel producing company.
He said it isn't economically viable to produce palm oil-based biodiesel if CPO prices are above MYR2,500/ton.
Last week, benchmark third-month CPO futures on Bursa Malaysia Derivatives reached an all-time high of MYR4,486/ton, more than double year-earlier levels.
At 0848 GMT, the contract was trading at MYR3,804/ton.
Last month, Malaysia's government said it was looking at the option of providing subsidies to put its biodiesel producing program on track.