Malaysia’s exports of palm-based biodiesel are likely to fall this year to their lowest since 2017 due to European Union restrictions and the COVID-19 pandemic, the Malaysian Biodiesel Association (MBA) revealed.
Exports from Malaysia are estimated to fall to 350,000 tonnes from 378,582 tonnes in 2020, MBA president UR Unnithan said at the Virtual Palm and Lauric Oils Price Outlook Conference.
The EU accounts for nearly 80% of Malaysia and Indonesia’s exports of palm methyl ester (PME), the bio component of biodiesel that comes from palm oil.
Exports have slowed since the bloc in 2019 moved to cap the use of palm oil for transport fuel at 2019 levels due to deforestation concerns, with an aim to phase out its use by 2030.
“Malaysia’s biodiesel exports are unlikely to better the performance seen in 2019 due to the EU Delegated RED II Act,” Unnithan told the conference.
MBA estimates the EU’s total consumption of palm biofuel in 2019 was 6.2 million tonnes. It said that actual exports this year will start at much lower levels because EU member states pushing for a no palm-biofuel agenda can set a lower limit.
Exports this year will be the lowest in four years due to the impact of the EU rule, a rising crude palm oil-gas oil spread and reduced usage of vehicles due to coronavirus containment measures, he added.
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