According to MPOB, Malaysia's palm-oil-based biodiesel drive will add 300,000 tonnes in demand.
Malaysian Palm Oil Board says that palm oil-based biodiesel will 'increase by more than 300,00 metric tons annually, as it joins Indonesia, the world's largest producer, in raising the blending mandates to reduce the reliance on imported energy.
The Malaysian government announced on Tuesday that it will increase its mandate of 10% biodiesel, also known as B10 to a blend of 15% biodiesel without providing a timetable. The Malaysian government will begin with a 12% biodiesel blend, without incurring additional production costs. It will also use existing biodiesel plants.
Malaysia, which is the second largest palm oil producer in the world, has implemented the B10 mandate on the transportation sector. However, a 20% mandate was implemented for the federal territory Labuan, Langkawi Island and the state Sarawak, except the town of Bintulu.
In an email, MPOB Director-General Ahmad Parveez Ghulam Kadir said that the move from B10 B12 to B15 would 'increase biodiesel use by 130,000 additional tons per year. The expansion to B15 will increase consumption by 204,000 tons each year.
He said that the new mandate would benefit the economy by reducing dependence on fossil fuels imported, increasing the price of crude palm oil (CPO), and easing the burden for diesel users.
Ahmad Parveez, a government official, said that the biodiesel mandate would cover diesel fuel sold in retail stations as well as?other subventioned?sector, and that future expansion into the industrial sector could be considered, depending on 'policy decisions aligned to national interest.
Ahmad Parveez said that the incremental increase in domestic biodiesel use is expected to have a marginal effect on palm oil exports. This is because Malaysia's CPO?production capacity remains robust. He said that "overall export volumes will remain stable."
Malaysia exported 15.27 million tonnes of palm oil last year, and produced 20.28 millions tons. (Reporting by Ashley Tang; Editing by Subhranshu Sahu)
(source: Reuters)
