Malaysia will delay the nationwide rollout of its B20 palm oil biodiesel mandate to early next year.
The reason behind the move was prioritise an economy that has been battered by the COVID-19 pandemic, the state news agency Bernama reported.
The mandate to manufacture biofuel with a 20% palm oil component - known as B20 - for the transport sector was first rolled out in January last year, and was set to be fully implemented across the country by the middle of this year.
"Nationwide we are giving priority for the government's post COVID-19 economic recovery plan, which is more crucial," Plantation Industries and Commodities Ministry secretary general Ravi Muthayah said. "We have limited resources and must identify priorities.”
Rival and top producer Indonesia has also pushed back plans to raise the bio-content of palm oil-based biodiesel to 40% and instead raised export levies to finance its B30 programme after the pandemic triggered a collapse in crude oil prices.
A rally in Malaysia's benchmark crude palm oil prices to its highest in nearly a decade has also widened its premium over crude oil, making palm a less sustainable option for biodiesel feedstock.
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