Higher Biodiesel Blend to Reshape Malaysia’s Palm Oil Demand

A potential shift towards higher biodiesel blends of B15-B30 could significantly reshape Malaysia’s palm oil demand dynamics, with consumption projected to rise between 380,000 MT and 1.5 million MT, according to the New Straits Times.  This will be equivalent to 1.8-7.4% of national crude palm oil supply, according to CIMB Securities Sdn Bhd analyst Ivy Ng Lee Fang. 
Malaysia plans to increase its mandate from B10 to B15, beginning with an initial implementation of B12, as part of efforts to enhance energy security and reduce reliance on fossil fuels. Economy Minister Akmal Nasrullah Mohd Nasir said the transition will not incur additional costs, as it will leverage existing blending infrastructure under the current B10 program.  The present mandate of B10 consumes about 750,000 MT of palm oil annually at full implementation.  The B12 planned rollout will increase utilization by a further 150,000 MT or roughly 0.7% of the country’s projected 2025 output.
In a related development, Datuk Seri Dr Ahmad Zahid Hamidi has said Malaysia now has 19 biodiesel production plants capable of generating about 1.5 million liters per month. The Deputy Prime Minister said that the expansion of biofuel production, which has been presented to the National Economic Action Council, involves collaboration between government agencies and private plantation companies.  He added that the 19 plants are currently producing biodiesel blends ranging from B15 to B50, with plans to further optimize output by utilizing sludge, a by-product of crude palm oil production.