Hauliers shy away from B20 due to high modification cost

They would have to fork out a minimum of RM3,000 for engine modification on each truck to accommodate the use of B20 biodiesel

by SHAHEERA AZNAM SHAH/ pic by TMR FILE

THE status of the B20 biodiesel mandate remains sketchy as hauliers steer clear from investing on modification of vehicles to accommodate the use of fossil fuel’s alternative.

Association of Malaysian Hauliers (AMH) president Datuk Nazari Akhbar said haulage companies have scratched the expenditure off their list, particularly on the installation of the filtration kit which is crucial for trucks’ longevity.

“With the Covid-19 impact, we are already running at a loss and to switch to biodiesel, especially the B20, will require a hefty amount of our cash upfront for upgrading investment.

“With the uncertainty of B20 implementation, I do not think anybody from the haulage community has invested in the preparation to accept the biofuel and there is no reason for us to switch when we have options such as the Euro 5 diesel,” he told The Malaysian Reserve (TMR).

According to Nazari, hauliers would have to fork out a minimum of RM3,000 for engine modification on each truck to accommodate the use of B20.

He said the installation of the filtration kit is necessary for the engines to be fuelled by biodiesel with a mixture of 20% palm oil and higher, as the current fleets used in the country are only able to run on a maximum biodiesel formulation of B10.

While the hauliers remain passive toward the B20 mandate, Malaysian Palm Oil Board (MPOB) DG Dr Ahmad Parveez Ghulam Kadir said it is still on the cards.

He said MPOB is currently collaborating with two Japanese automotive agencies — Japan Automobile Manufacturers Association (JAMA) and Japan Automotive Research Institute (JARI) — to study the effects of B20 on diesel vehicles.

“In preparation to introduce the B20, MPOB has been conducting studies with Japanese car associations to get Japanese manufacturers’ support in the biodiesel programme,” he said at the launch of the tocotrienol programme in Bandar Baru Bangi, Selangor, recently.

The campaign for the usage of B20 biodiesel, a common biofuel blend which consists of up to 20% biodiesel and 80% petroleum diesel, was launched in February.

The fuel has also been retailed in stages in Langkawi, Kedah, and Labuan since Jan 1 and Jan 15 respectively, while the rest of the country is running on B10 biodiesel.

Primary Industries and Commodities Minister Dr Mohd Khairuddin Aman Razali said in June that the programme would be held back until Sept 1 in Sarawak and Jan 1, 2021, in Sabah, rather than in April and August 2020 respectively.

According to Nazari, the B20 biodiesel usage is also expected to double the cost of maintenance for some fleets, which would also potentially shorten the intervals of the fleet’s servicing schedules.

“Some truck manufacturers have said using the B20 will affect the servicing schedules. The trucks are usually being serviced at 30,000km intervals and this would be reduced to 15,000km when we switch to B20.

“So, it will put additional costs on the owners.”

Nazari said the additional costs will also add pressure on independent truck owners who are already operating on a tight margin.

“While the biodiesel programme has a significant purpose of helping the oil palm smallholders, it comes at the expense of the independent truck owners.

“The haulage community is also made up of owner-driver hauliers who are essentially not making a lot of money, which is equivalent to the smallholders.”

Ultimately, Nazari said hauliers will end up choosing the Euro 5, which is deemed as the better diesel from the current Euro 2M widely available in Malaysia.

“Although it is about 10 sen per litre pricier and has not been widely available, hauliers will probably go for the Euro 5 diesel as hundreds and thousands of investment take a lot of our margins.

“Unlike Indonesia, the Malaysian government does not subsidise biodiesel, which gives us no room for savings. Should we have some savings, the hauliers could consider setting aside investment for the trucks’ modifications.”

Euro 5 fuel refers to the European exhaust emission standards which set the limits on the unhealthy pollutant emissions from the exhaust system of motor vehicles. It came into effect in Europe in September 2009.