Increasing Malaysia’s biodiesel mandate from B10 to B15 and eventually higher blends could significantly reduce the country’s reliance on palm oil exports by expanding domestic consumption, according to Felda chairman Datuk Seri Ahmad Shabery Cheek.
He said Malaysia currently produces about 20 million tonnes of crude palm oil (CPO) annually, but the bulk of output remains dependent on overseas markets.
“Out of the 20 million tonnes produced, about three million tonnes are used for food products such as cooking oil, margarine and butter, while only one million tonnes go towards biodiesel. The remaining 15 to 16 million tonnes depend on export markets,” he said.
Shabery noted that Malaysia has the capacity to utilise between five and six million tonnes of palm oil for biodiesel production, creating a larger and more stable domestic market for the commodity.
“More palm oil used domestically means less dependence on export markets. Some countries impose various conditions, quotas and taxes to protect their own industries,” he said.
He stressed that increasing palm oil usage for biodiesel would not compromise domestic food requirements, while helping strengthen the local plantation sector and safeguard settlers’ incomes.
The government is rolling out the biodiesel programme in phases, beginning with B15 before progressing to B20, with the potential to reach B50 within the next two to three years.
The move is expected to boost domestic palm oil demand and provide greater resilience against external market volatility as Malaysia seeks to diversify demand sources for its key agricultural export.
