Malaysia hopes to increase its use of palm oil as fuel

Commodities Minister Peter Chin said laws were being drafted to make the use of such fuel compulsory by 2008.

Negotiations have begun with petroleum companies, to persuade them to produce fuel using both mineral and vegetable oils, the government has revealed.

The government favours fuel from 19 parts diesel to one part palm oil, and says engines do not need modification.

However, environmentalists are likely to have mixed feelings about the move. While it marks a shift away from fossil fuels, it could cause other problems.

Search for alternatives

As demand for oil rises and reserves dwindle, countries like Malaysia are looking for alternatives, according to the BBC correspondent in Kuala Lumpur Jonathan Kent.

Palm oil is made from the fruit of the oil palm, and Malaysia is the world's largest producer.

Last month, Malaysia announced a joint venture with private partners to build three plants that will make the new fuel for export to Europe.

The switch to alternative courses of fuel is not all good news for environmental campaigners.

Malaysia has lost much of its ancient rainforest to palm oil plantations, and Malaysian companies are thought to be behind moves to expand palm oil production in Indonesia.