Malaysia’s biodiesel mandate delayed to early 2022, prioritising economic recovery

MALAYSIA’S B20 biodiesel mandate will be delayed by about six months to early 2022, said Plantation Industries and Commodities Ministry secretary general Ravi Muthayah.

“Nationwide we are giving priority for the government’s post COVID-19 economic recovery plan, which is more crucial. We have limited resources and must identify priorities,” he said.

Earlier in the day, Indonesian Palm Oil Association (GAPKI) vice chairman Togar Sitanggang, who spoke at the virtual Malaysian Palm Oil Trade Fair and Seminar 2021 (POTS Digital 2021), confirmed that Indonesia’s plan to roll out the B40 mandate could be delayed beyond the end of 2022.

Plantation guru Dr James Fry, who is the chairman of LMC International, said at the same event that in  Malaysia, every year the implementation seemed to be “delayed, delayed and delayed”.

Responding to this, Ravi said it was not right to say that Malaysia had delayed the implementation of the biodiesel programme.

“We have implemented the B10 biodiesel for the transportation sector and B7 for the industry since 2019. It’s not right to say Malaysia has delayed the implementation of the biodiesel programme.

“We have implemented the B20 programme in Langkawi and Labuan as well, and next we will proceed to Sarawak and Sabah, once we have upgraded the depots,” he added.

The mandate to manufacture biofuel with a 20% palm oil component (B20) for the transport sector was first rolled out in January 2020, and was set to be fully implemented across the country by mid-June this year.

Meanwhile, Togar of GAPKI said Indonesia was still undergoing discussions and laboratorial testing before going to road test.

 “I would expect this (B40 laboratorial testing) to be done at least in the first half of year 2021.

“The B40 composition could be 40% fatty acid methyl ester (FAME) or 30% FAME plus 10% hydrotreated vegetable oil (HVO) or a FAME-HVO combination depending on the availability of HVO from Pertamina (Indonesian energy corporation),”  he said on the third day of POTS Digital 2021.

He said that while some would say 40% FAME was good enough, but the Indonesian automotive industry and the government believed that 30% was the maximum blending.

“I do not really see B40 (to happen) so fast even in 2022. It will depend on the economic and pandemic situations in 2021,” he said, adding that the pandemic had created problems in terms of logistics, machinery and people that built it, as they were not allowed to enter the country which resulted in the commissioning process being stopped.

Earlier in his presentation at the seminar, Oil World executive director Thomas Mielke said the biodiesel production/usage was still high in Indonesia, the United States, Brazil and the European Union in the October-December 2020 period.

“Indonesian palm oil producers and consumers in the importing countries partly finance the Indonesian biodiesel programme. But will mandates be reduced in 2021?” he asked, referring to the higher CPO trading prices. – Jan 7, 2021

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