Malaysia increases green fuel mix to B20

The increase to 20% of palm methyl ester will help stabilise palm oil prices in the long term and help reduce CO2 by 3.8m tonnes annually

by SHAHEERA AZNAM SHAH / pic by MUHD AMIN NAHARUL

MALAYSIA is expanding the green fuel programme to B20 as the country seeks to increase the production of biodiesel, provide a safeguard to the palm oil sector and reduce fuel cost subsidy.

The earth-friendly B20 programme which will be rolled out in phases — starting with Langkawi last month — would see the country’s palm oil consumption for domestic biodiesel industry rise to about 1.3 million tonnes annually.

Biodiesel mixes palm oil with regular diesel. Previously, the standard for the country’s green fuel was B7.

Primary Industries Minister Teresa Kok said the increase to 20% of palm methyl ester will help stabilise palm oil prices in the long term.

Kok (left) with Deputy Prime Minister Datuk Seri Dr Wan Azizah Wan Ismail at the launch of B20 Biodiesel. Previously, the standard for the country’s green fuel was B7

“The palm oil sector will benefit from the higher blend of palm in biodiesel. Malaysia is currently using B7 for the industrial sector, while the transportation sector will begin to use a higher blend of B20.

“The additional palm oil blend in B20 will increase the edible oil’s uptake of biodiesel to 534,000 tonnes, of which if combined with B7 usage, the total domestic biodiesel consumption will reach 1.3 million tonnes,” she said at the launch of B20 Biodiesel Programme in Kuala Lumpur yesterday.

Kok said the higher biodiesel blend will help reduce CO2 by 3.8 million tonnes annually.

Malaysia has been pushing the higher blend of the green fuel to boost usage of palm oil and help to remove glut in the market.

The move would also help increase the price of the commodity. Indonesia had launched the highest mix of 30% palm-based fuel as the most populous Islamic country sought to reduce its fuel import cost. Jakarta is already testing a higher palm-mix of B40, which the country plans to launch next year.

Indonesia is expected to use up to 8.3 million tonnes of palm oil to cater for its domestic biodiesel sector.

The move would leave little for the world’s largest producer of palm oil for the export market.

Meanwhile, Kok said her ministry is discussing with the Finance Ministry (MoF) to include players in the commodity sectors in the “soon to be announced” stimulus proposal.

“We know many sectors including tourism, are affected by the Covid-19 outbreak. However, for the palm oil sector, the crude palm oil price has been doing quite good ranging between RM2,700 and RM2,800 per tonne.

“There are several industries under the commodity sector that we think will benefit from the stimulus package. My ministry will submit a proposal to MoF to include the commodity sector,” she said.

The economic stimulus package will be announced by Prime Minister Tun Dr Mahathir Mohamad on Feb 27, 2020.

The B20 biodiesel is being sold at petrol stations in Langkawi and Labuan since last month. It will be introduced in Sarawak in April and Sabah in August before it is implemented for the peninsula by June next year.

Petroliam Nasional Bhd, Petron Malaysia Refining and Marketing Bhd, Chevron Malaysia Ltd and Boustead Petroleum Marketing Sdn Bhd are supporting the programme.

The higher-blend biodiesel will be available at 3,400 petrol stations nationwide by the middle of next year.

Ministry of Primary Industries undersecretary of biofuel division Dr Sang Yew Ngin said biodiesel usage can be extended to the maritime industry as global shipping companies are interested in lowering their carbon footprint.

“Fishermen in Malaysia are already using B10 and with this newly launched programme, they will switch to B20.

“Through the International Maritime Organisation, shipping companies are seeking to lower their carbon emissions level by 2050 and biodiesel could help them achieve the goal,” Sang said.

Hapag-Lloyd AG, German-based shipping and container giant, has started using B20 biodiesel in one of its vessels.