KUALA LUMPUR (April 7): Malaysia should speed up and widen the roll-out of higher biodiesel blend programme nationwide for both transport and industrial sectors, a trade body said on Tuesday.

For locations with technically-capable infrastructure, higher biodiesel blending levels of up to B20 — a 20:80 mix of palm-based methyl ester and petroleum diesel — should be implemented immediately, the Malaysian Biodiesel Association said in a statement.

“While progress towards higher blends has been constrained by the readiness of blending infrastructure, the government should accelerate its upgrading to enable blending level of up to B30 nationwide,” the association said.

Malaysia has launched the B20 biodiesel programme for the transport sector was launched in February 2020. However, its implementation to date has been limited to Pulau Langkawi, Kedah, Labuan, and Sarawak, while B7 remains the applicable blend in the industrial sector.

Nearly six years on, nationwide roll-out has yet to be realised. Over the past weeks, President Prabowo Subianto has said that Indonesia will proceed with its plan this year to introduce B50 biodiesel, while Thailand is accelerating the adoption of B20 as petroleum diesel prices surged.

The ongoing West Asia conflict shows that higher biodiesel blends are no longer just a policy choice, but a matter of national strategic importance, the association stressed.

The association, which represents 17 biodiesel producers with a combined capacity of 2.5 million tonnes and six associate members, also called for measures to encourage the use of biodiesel beyond the mandate, including by exempting the 10% sales tax on biodiesel.

The combined impact of the national biodiesel programme and voluntary biodiesel use would help improve energy security, reduce emissions, save on foreign exchange and cushion against global oil price swings, while supporting the domestic palm oil sector, the association noted.

The impending implementation of the carbon tax mechanism in Malaysia should further encourage and justify the adoption of higher biodiesel blends in both the transport and industrial sectors in Malaysia, the association said.

Malaysia is set to implement carbon tax this year, targeting sectors such as iron, steel and energy, which are among the largest contributors to the country’s carbon footprint. The government, however, has yet to announce details about the tax, such as the rate and coverage.

“The current crisis presents not just risks, but an opportunity for Malaysia to reinforce its commitment to sustainable, domestically anchored energy solutions,” the association added.