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Malaysia delays B10 biodiesel mandate amid rise in palm oil prices

KUALA LUMPUR: Malaysia has decided to delay the B10 biodiesel mandate as palm oil prices have risen considerably, said Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong.

“For the past couple of weeks, we’ve seen the gap between palm oil and diesel prices widening at the current volatile market,” he told Business Times in an interview today.

“Palm oil prices has risen considerably to near RM3,000 per tonne last week. This week it has come down a bit but still at a supportive level for oil palm planters,” he said.

“In this situation, it is best to defer the implementation of B10 biodiesel mandate for the transportation sector and B7 in industrial sector,” he said.

The minister explained that if the government were to raise the current biodiesel mandate of B7 to B10, diesel price at the pump will go up and burden many people.

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.

“My role in the government is to balance the needs of a diverse set of stakeholders, including diesel consumers,” he said.

Under the Malaysian Biofuel Industry Act 2006, the Plantation Industries and Commodities Minister is empowered to raise and lower Malaysia’s biodiesel mandate.

When the government mooted the biodiesel programme, more than a decade ago, the rationale is to help bring down the nation's palm oil stocks and support prices in the international market.

The palm oil industry is very important to Malaysia's economy as it supports more than two million livelihoods and jobs.

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