‘Cheaper to Use Biodiesel Now’

Deliver Dispense, Feedstocks, Field/Orchard/Plantation Crops/Residues, Infrastructure, Malaysia, Opinions, Policy

November 1, 2018

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(New Straits Times) Primary Industries Minister Teresa Kok said at current low palm oil pricing, it is cheaper for trucks and busses to use biodiesel or palm methyl ester (PME) than petroleum diesel.

Crude palm oil, which is currently trading at RM2,200 per tonne, is the main feedstock used in the production of PME or biodiesel.

“As of todate, diesel that is being sold at the fuel stations is priced at RM2.31 per litre while PME cost RM2.28 per litre,” she said.

The minister was speaking to reporters here today, after officiating a launching ceremony of a collaboration between Malaysian Palm Oil Board and Kajang Municipal Council to boost usage of PME to a B20 blend in their diesel-powered vehicles.

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Kok estimated the government stands to save about RM10.7 million per year in subsidy if Malaysia raise the biodiesel mandate for the transport industry, from the current B7 to B10.

B7 is a fuel blend of 7 per cent PME and 93 per cent regular diesel while B10 connotes a higher 10 per cent of renewable fuel in the blend.

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On top of that, Kok also highlighted the government can also save about RM1.6 billion per year in diesel import costs.

Kok explained that the nation’s biodiesel programme was introduced in 2011 with a blend rate of B5 (5 per cent PME mixed with 95 per cent petroleum diesel).

In view of the current favourable pricing opportunity of petroleum and palm oil, she encouraged companies in the logistics, plantation and manufacturing sectors to support the government efforts to raise domestic palm oil consumption through the use of B10 biodiesel blend. READ MORE

Proposal on price stabilisation mechanism for biodiesel submitted to cabinet (Borneo Post)

Govt to spend less on fuel subsidy with B10 mix (The Malaysian Reserve)

Malaysia not aggressive enough in biodiesel mandate, says expert (The Edge Markets)

Talk of Malaysian B10 mandate in Feb seen unlikely to boost low CPO prices: analyst (SP Global Platts)

Malaysia to lift bio-content in biodiesel from December 1 (Reuters)

Excerpt from The Malaysian Reserve: The B10 biodiesel mandate has faced several delays in recent years. The government first anticipated the policy to be introduced on Dec 1, 2016. However, it was postponed twice.

In August last year, the previous administration said it was in the middle of gathering statistical evidence to prove that locally produced palm biodiesel does not harm diesel engines.

Efforts to implement the B10 programme in Malaysia have been dampened by pessimistic comments from automakers. German companies BMW AG and Volkswagen AG, for instance, said the B10 mixture was not compatible with their diesel engines. READ MORE

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