As the current Gulf war tightens its grip on global crude oil supply chains, Malaysia—like many nations—is staring into the abyss of a prolonged fuel shortage.

The conflict has sent diesel prices to eye-watering levels—RM6.72 presently. As a result, you do not see so many pickup trucks on the road these days. They are parked away, reserved only for use in absolute necessity.

The urgent question echoing across Putrajaya is simple: how do we keep our logistics, agriculture and transport sectors moving?

Predictably, one preposterous suggestion has surfaced, calling for an increase in the palm oil component in Malaysia’s B7 biodiesel to 20%—or even higher.

On paper, it sounds patriotic. Malaysia is the world’s second-largest palm oil producer, so why not grow our own fuel? The reality, however, is far less romantic. Palm oil is significantly more expensive to produce than conventional diesel.

B7 was never designed as a cost-saving measure; it was promoted by the European Union as a sustainability measure, blending 7% vegetable oils with 93% fossil diesel to slightly lower the carbon footprint.

Pushing that ratio to B20 and beyond would be an economic disaster. It would divert massive volumes of palm oil away from lucrative food and cosmetic exports—where it commands premium prices—only to be burnt in lorry engines at a loss.

Worse, because B7 in Malaysia’s case already relies on subsidised palm oil, any increase would balloon the government’s subsidy bill at a time when war-related inflation is already squeezing the budget.

At the end of the day, B20 today will not bring energy independence; it is a subsidy suicide note.

But here is the deeper, more frustrating irony. While we obsess over blending more expensive vegetable oil into diesel, we are deliberately ignoring a vast, homegrown, renewable source of gaseous fuel that is literally bubbling out of our own palm oil mills and pig farms.

Malaysia’s palm oil industry produces an enormous volume of Palm Oil Mill Effluent (POME). When treated, POME generates biogas—primarily methane. This is not a futuristic fantasy. It is a proven, renewable natural gas (NGV) source that already powers thousands of taxis, buses and heavy commercial vehicles today in Sweden, Germany and the UK.

This bio-gas is also discreetly used in remote parts of Sabah where palm oil mill operators have bought Chinese-made compressed natural gas (CNG) tankers to fuel up. I say “discreetly” because the transport ministry has banned this fuel.

But the reality is that CNG users have a commercial advantage.

Malaysia has the feedstock. We also have the technology. And we have a National Energy Transition Roadmap (NETR) that supposedly champions low-carbon solutions.

Yet, a few years ago, the transport ministry effectively disallowed the use of this biogas for vehicles. Their reason? There was no procedure to test and certify the compressed gas cylinders on taxis and heavy commercial vehicles.

Let me say this more simply: a clean, domestically produced fuel was banned because there was no bureaucratic checklist.

Think about the absurdity. During the current Gulf war-induced fuel crunch, we are considering burning expensive, subsidised palm oil in diesel engines while simultaneously blocking the use of a free, renewable gas that arises from the same palm oil production chain.

We are proposing to spend more money on a less efficient solution, while locking away a zero-cost alternative because the paperwork doesn’t exist.

This is not just poor policy. It is a direct contradiction of the NETR’s stated goals. The roadmap calls for increasing renewable energy share, reducing import dependency, and decarbonising transport.

POME-derived biogas ticks every single box. It reduces methane emissions (a potent greenhouse gas), displaces imported diesel, and provides a cheaper fuel source for the hard-pressed logistics sector.

Instead of chasing the expensive mirage of B20, the transport ministry should be rushing to reverse its previous decision. Develop the testing standards. Certify the cylinders. Amend the regulations. We have the gas. We have the vehicles. All we lack is the political will to connect the two.

The Gulf war is a crisis, yes. But it is also a wake-up call.

Malaysia cannot claim to be serious about energy transition while strangling a homegrown renewable gas in its cradle. The palm oil we should be fighting over is not the kind we burn in engines, but the waste we refuse to fuel them with.

Smarter people have seen the opportunity, and the Malaysian Investment Development Authority last year approved the BAC RE Asean Biofuels Storage and Exporting Hub in Tanjung Langsat, Johor, with its first shipment scheduled to start next year.

The project’s proponents estimate that converting palm oil waste into biogas and subsequently upgrading it into biomethane could yield up to 3.3 million tonnes of Bio‑LNG (Liquefied Biomethane Gas) annually across the region.

Bio‑LNG represents the logical step forward from Bio‑CNG. Biogas derived from palm oil mill effluent (POME) is upgraded into biomethane, which closely mirrors the composition of piped natural gas, aside from trace amounts of ethane and propane.

This biomethane can then be compressed into Bio‑CNG or liquefied into Bio‑LNG. Both fuels serve as viable options for trucks operating as natural gas vehicles (NGVs).

Malaysia must address its fuel folly—stop the B20 charade, unlock the biogas from POME.

The answer isn’t in higher biodiesel blends—it lies in the very gas we’ve banned from powering our own land transport.

Yamin Vong is on Facebook at yamin.com.my.

The views expressed are those of the writer and do not necessarily reflect those of FMT.