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Malaysia to raise its biodiesel mandate

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Reuters reports that on the 26th of November Malaysia announced that it intends to start phasing in a higher biodiesel mandate starting from next month. The new rule will be officially put into place from February 2019 as the country hopes that this will bolster palm oil prices.

The provisionally named B10 biodiesel programme intends to raise the minimum bio-content that local producers are meant to put into their biodiesel. The biodiesel that is used to fuel transportation is to be raised from 7% to 10% which will potentially boost demand for palm oil as a feedstock.    

According to Reuters, Malaysia’s Primary industries minister, Teresa Kok said that the B10 programme would be implemented for the transportation sector in phases starting from the 1st of December. And that the mandatory implementation will begin on the 1st of February.

As the world’s second biggest producer of palm oil after Indonesia, Malaysia has been affected by the recent ‘slump’ in the price of vegetable oil. Reuters state that benchmark palm oil prices fell to a near three-year low last week because of high inventories, rising production and inactive demand.    

The B10 programme will increase local consumption of crude palm oil and should help to reduce stock Kok says. “At the current low price of palm oil, now is the right time to implement the expanded biodiesel programme” the minister concluded.