Malaysia outlines phased expansion of national B20 biodiesel rollout

Malaysia plans to extend its palm‑based B20 biodiesel programme nationwide in stages, with the pace of implementation shaped by the sensitivity of palm oil prices relative to petroleum, according to the country’s Plantation and Commodities Minister.
As the world’s second‑largest producer of palm oil, Malaysia currently applies a B10 biodiesel mandate for the transport sector, with B20 already in place in Labuan, Langkawi and most of Sarawak.
Recent surges in crude oil prices, driven by the conflict involving Iran and the closure of the Strait of Hormuz, have renewed calls for the government to accelerate the shift towards higher biodiesel blends.
Responding to questions from Reuters, Minister Noraini Ahmad said the government remained committed to gradually increasing biodiesel usage. She noted that most regions still operate on B10, leaving “significant room” to move towards B20 and eventually B30.
Neighbouring Indonesia has already adopted a mandatory B40 blend and aims to begin B50 this year, a policy that has previously tightened global supply and pushed palm oil prices higher.
Malaysia produced 975,207 tonnes of biodiesel in 2025, well below its total production capacity of 2.36 million tonnes.
Noraini emphasised that upgrading blending depot infrastructure is essential, with approved funding allocated to enhance facilities in Sandakan, Tawau, Sepanggar and Bintulu. She added that these upgrades will be carried out in phases to ensure they align with the country’s financial position.