The B10 programme targets to increase the blending ratio of palm biofuel in diesel from 7% to 10%

By AFIQ AZIZ / Pic By ISMAIL CHE RUS

Petrol stations nationwide will have to switch to B10 biodiesel from the current B7 diesel blend by February, said Primary Industries Minister Teresa Kok.

She said the B10 biodiesel programme was rolled out in December last year for the transportation sector, and has been implemented in phases.

“The B10 programme targets to increase the blending ratio of palm biofuel in diesel from 7% to 10%.

“The government has announced the B10 mandate for the transportation sector as part of the  palm oil (CPO) supply management mechanism to stabilise palm oil prices by reducing the high domestic stock level and increasing the sustainability of energy sources,” she said in her keynote address at the Palm Oil Economic Review and Outlook Seminar 2019 in Putrajaya yesterday.

Her speech was read by her deputy Datuk Seri Shamsul Iskandar Md Akin (picture).

Kok said the B7 programme for the industrial sector will be implemented starting July 1 this year, which would boost local demand for palm oil to 386,993 tonnes per year from the current 373,512 tonnes.

“The mandatory implementation (of the programmes) in both sectors is estimated to require 760,505 tonnes of palm oil annually and is expected to have a positive impact on palm oil prices,” she said.

Kok said the government also plan to increase the biodiesel blend from B10 to B20
by 2020.

She said the local palm oil industry’s performance last year was somewhat mixed, with the industry recording a 3.6% growth in the export of palm oil products.

“But the CPO price declined to an average of RM2,232 a tonne in 2018 from RM2,783 in 2017, influenced by the weaker soybean oil price, its main competitor in the world market, and a high domestic palm oil stockpile,” she added.

As a result, the revenue from palm oil products dropped by 12.3% to RM62.68 billion during the January-November period in 2018, compared to RM71.44 billion in the corresponding period of 2017.

“Overall, it was a very challenging year for the trade in vegetable oils and fats.

Meanwhile, Shamsul told reporters that the government has voiced its opposition to a report by the World Health Organisation (WHO), which equated palm oil marketing to tobacco and alcohol lobbying.

“We will use all channels to have WHO retract and rectify the wrongful report from its Bulletin,” he said.

On Jan 8, the WHO published a study claiming the palm oil industry is deploying tactics similar to those from the alcohol and tobacco industries to influence nutrition research.

Palm oil has been hit with negative perceptions, especially after the European Union decided to phase out palm oil-based transport fuel by 2030.

Prime Minister Tun Dr Mahathir Mohamad had sent a protest note, seeking explanation from the French government, on its decision to declassify palm oil as a biodiesel feedstock from 2030.

According to the Malaysian Palm Oil Board and the Statistics Department, Malaysia’s 2018 palm oil exports dropped 13% to RM65.12 billion from RM74.75 billion in the previous year.

Meanwhile, Shamsul said the ministry will start aggressive trade missions to palm oil export markets, in Europe and the Middle East, hoping for more demands that could stabilise CPO price moving forward.

“We are heading to the countries that have good potential market. Tomorrow, we are going to Pakistan to promote our palm oil products at the Pakistan Edible Oil Conference.

“We are meeting the industry players to lock-in deals,” he said, adding that relevant agencies will also visit Iran and Turkey for a similar purpose.

Earlier during the speech, Shamsul said the 13% fall in palm oil exports was mainly due to the decline in CPO price.

“Among the challenges that palm oil exporters face are low pricing, the build-up of domestic palm oil stocks and volatility of ringgit against the US dollar,” he said.