Govt to double palm oil content for transport biodiesel to 20%

Malaysia’s palm oil inventories fell to 3.001 million tonnes in January on increasing demand and falling production. (Bernama pic)

KUALA LUMPUR: Malaysia aims to double the palm oil content in biodiesel used for the transport sector to 20% next year, as Southeast Asia’s third-largest economy looks to cut record stockpiles and boost prices, a government minister said today.

The government will also raise the palm oil content in biofuel for the industrial sector to 10% next year from a 7% quota being rolled out this July, Primary Industries Minister Teresa Kok said, speaking at a conference.

Malaysia’s palm oil inventories fell to 3.001 million tonnes in January on increasing demand and falling production, but that was still near the two-decade high of 3.22 million tonnes recorded a month earlier.

The increases in the amount of palm oil mandated for biodiesel – known as B20 for transport and B10 for industrial use – should lift use of the vegetable oil in biofuels to 1.3 million tonnes annually, Kok said.

Indonesian Deputy Minister for Food and Agriculture Musdhalifah Machmud, who was also present today, said trials for B50 biodiesel fuel were ongoing in the country.

“Trials are being held on cars travelling from Medan to Jakarta. No damage to the cars has been reported,” Musdhalifah, who is also coordinating minister for economic affairs, said in a press conference.

She said Indonesia began using B20 in 2015 with the government making it mandatory for the transport industry last year.

Use of B30 is expected to be implemented by next year.

“We are now at the implementing stage,” Musdhalifah said.

In December, Prime Minister Dr Mahathir Mohamad challenged Malaysia to emulate Indonesia in its move to introduce B20 biodiesel fuel by 2020.

He said Indonesia had surpassed Malaysia as the largest producer of palm oil and had already introduced B20 – a blend of 20% palm methyl ester and 80% petroleum diesel – in its transportation sector.

Kok said her ministry was committed to achieving the target with the help of other ministries.

She said cars could use up to B100 biodiesel fuel but noted fears in the automobile industry that this could damage vehicle engines.