The Malaysian Biodiesel Association (MBA) said it was against a move to reduce or retract the biodiesel mandate in Malaysia.
In a statement, the MBA urged the Malaysian Palm Oil Board to engage the biodiesel industry before taking any precipitative action.
With reference to Reuters’ recent report, the MBA explained that it was important to note that the global supply and demand of vegetable oils were controlled by a number of factors.
The MBA said: “The palm oil industry as a whole, both upstream and downstream biodiesel would suffer from any such action, as it would result in CPO price crashing to a very low level.
“This, in turn, would affect the over three million smallholders globally.
“Without doubt, the current Russia-Ukraine war further worsened the global vegetable oil supply chain constraints, since Ukraine is the world’s largest producer of sunflower oil.
“The Indonesian government’s decision to ban palm oil export is aimed at protecting its domestic cooking oil market. They, however, did not retract its biodiesel mandate which is currently at B30.”
In addition, the MBA said that countries like the US, Argentina and Brazil as well as the EU have not come up with any recommendations to retract their biofuel programmes.
“As such, Malaysia should not reduce or stop its biodiesel mandate as the biodiesel industry hardly consumes one million tonnes of palm oil annually, against over 40 million tonnes used globally,” it concluded.
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