THE WHAT? Malaysia is increasing the palm oil content in its biodiesel programme as rising oil prices and Middle East disruption drive stronger demand for palm oil.
THE DETAILS Starting in June, Malaysia will introduce B15 biodiesel nationwide, increasing the palm oil blend in diesel fuel from 12% to 15%, with plans to gradually move to B20 and potentially B50 over the next few years.
The move comes as diesel prices surged following disruption linked to the Middle East conflict and instability around the Strait of Hormuz. At the same time, Malaysia’s palm oil futures climbed to their highest level in more than a year in late March, supported by increased demand tied to the energy market disruption.
Government officials said biodiesel is being positioned as a practical short-term alternative fuel that can reduce dependence on imported fossil fuels while supporting domestic palm oil consumption. Malaysia currently has annual biodiesel production capacity of 2.36 million metric tons.
THE WHY? Higher crude oil prices are increasing demand for palm-based biodiesel, supporting palm oil prices while encouraging Malaysia to expand domestic biodiesel usage.
Source: Nikkei Asia
