Singapore (Platts)--21Jan2009

Proper biodiesel blending can prevent flow performance problems in
freezing conditions and should not inhibit the use of the fuel in cold
climates, trade sources in Asia said Wednesday.

On Friday, schools in one Minnesota district had to close because the
biodiesel in its school buses was not cooperating with the frigid weather.

Elements in the biodiesel fuel turned into gel-like substance due to
subzero temperatures, and the problem left dozens of students stranded in
frigid weather, a district's spokesperson was quoted as saying by local
reports.

"It just reinforces the need to use the correct biodiesel blends in
the appropriate season. That's why there are a number of feedstock sources in
the market," said Mike Thorley of Malaysia-based SPC Biodiesel, a unit of
the Australian Securities Exchange listed Sterling Biofuels Group.

"The extreme weather they have [in the US] this year is the coldest
they've had in recent years," Thorley said.

Even fossil diesel could get clogged up in extreme cold, several sources
pointed out. "That's why they have different grades of diesel for different
uses," a biodiesel trader said.

Minnesota was the first US state to mandate the use of biodiesel,
requiring all diesel sold at filling stations to contain at least 2% of the
product made from soybeans.

Soybean-based biodiesel is said to have a cold filter plugging point, or
CFPP, of around minus 6 degree Celsius. CFPP gives a prediction of the lowest
temperature at which a fuel will still flow through a specific filter.

"The benefits of being able to blend the different values of biodiesel
from rapeseed, soybean and palm oil provide the opportunity to meet all
seasonal demands," Thorley said.

Palm-based biodiesel has about five different CFPPs depending on which
grade of refined palm oil is used to produce biodiesel, he said.

Biodiesel made from palm kernel oil, for example, can have a CFPP ranging
from minus 12 degrees Celsius to as high as plus 18 degrees Celsius if palm
stearin is used, he added.

Generally though, biodiesel made from palm oil is thought to have a CFPP
of about 12 degrees Celsius. This means it can solidify in cold temperatures
and stop the flow of fuel to a vehicle's engine, making it unsuitable for use
in winter weather conditions.
--Weilyn Loo, weilyn_loo@platts.com