Abstract

The aim of this paper is to carry out a comparative analysis of the Brazilian bioethanol sector and the Malaysian palm biofuel sector.  The major findings for the Brazilian experience are economic nationalism, mandatory policy with initial focus on the domestic market, a nationwide biofuel infrastructure, incentivized mill construction and the adoption of flex-fuel vehicles are the cornerstone of its success.  Production factors like abundant sugar cane feedstock and evolving production technologies have made immense contribution.  The Malaysian experience however differs from that of Brazil's.  The miniscule domestic market, a lack of biofuel infrastructure on a nationwide basis and a small number of diesel passenger vehicles force the Malaysian biofuel producers to be reliant on the international market.  The viability of palm biofuel is very much dependent on petroleum prices.  If food value is higher than fuel value, palm oil would be diverted towards food production and vice versa.

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