KUALA LUMPUR: The National Association of Smallholders Malaysia (NASH) has expressed its support for the government's move to raise the current biodiesel mandate from B7 to B10 next month.
Its president Datuk Aliasak Ambia said raising the biodiesel mandate in Malaysia would help bring down the nation's palm oil stocks and therefore support palm oil prices in the international market.
“We support the government's decision to raise the biodiesel mandate, which will raise palm oil consumption, just like what the Indonesian government is doing,” Aliasak said.
The biodiesel B10 is a blend of 10 per cent palm methyl ester (PME) and 90 per cent regular diesel, while B7 is of a lower blend of 7 per cent PME.
Apart from the B7 mandate going up to B10, the industrial sector, which all this while has been using only regular diesel, will also start to use the B7 blend.
Fuel stations selling Euro 5 grade diesel are exempted from the B10 mandate but will be required to retail the B7 blend.
At press time, the third month benchmark crude palm oil futures on Bursa Malaysia Derivatives Market is trading at RM3,000 per tonne.
Meanwhile, on a macro-level, Aliasak estimated that every RM100 increase per tonne in palm oil prices can translate to an additional RM2 billion value adding to Malaysia's economy.
Over the last five years, the government via the Ministry of Plantation Industries & Commodities and its agency Malaysian Palm Oil Board (MPOB), had been taking a slow-and-steady approach in rolling out the B5 and then B7 blends.
The government has been and continues to be in regular consultation with Malaysia Automotive Institute, Ministry of International Trade and Industry, the Malaysian Automotive Association and Japanese Automotive Manufacturers Association (JAMA) on engine warranty issue.