A Malaysian firm claimed it has the potential to solve global warming issues and the world's energy woes by pioneering the production of ethanol from nipah palm trees as an alternative fuel source.

Pioneer Bio Industries Corporation officials said the company had already secured a five-year contract worth more than US$66 billion from a global trading firm to supply the nipah palm-based ethanol.

Pioneer Bio chairman Badrul Shah Mohamad Noor said the company was working closely with the Malaysian government's biofuel project and expected its first refinery to begin commercial production by the end of 2008.

"By 2020, ethanol will represent 30 percent of global energy. With the existing nypa palm that we have identified, we can produce enough ethanol for the requirements of the world," Badrul Shah told reporters.

Ethanol is produced commercially as a biofuel in Brazil and Europe, derived from other plant sources such as sugar cane, cassava, corn and sugar beet.

Studies by the company's scientists indicate the nipah palm is capable of producing up to 15,600 litres of ethanol per hectare, more than twice the yield of sugar cane.

RM43 bil investment

Badrul Shah said Pioneer Bio would invest some RM43.2 billion to build 15 refineries in Malaysia, as well as an integrated township, which would include a port to export the ethanol produced.

"Our first plant will be ready by the end of 2008 and we aim to build the others within two years," Badrul Shah said, adding the refinery would have a capacity to produce 6.48 billion litres of ethanol per year.

The plant will be built in Perak, where the company has also secured rights from the state government to extract ethanol from nipah trees growing wild in swamplands along the coastal area.

Pioneer Bio will pay the Perak state government RM324 million a year to harvest the sap from 10,000 hectares of nipah palm trees.

Malaysia, a net crude oil exporter, is expanding its biofuel industries, mainly sourced from palm oil, as high prices for crude oil cause demand for alternative fuel sources to soar.