AreaMalaysia
Commodity GroupBiofuels
CommodityBiodiesel
Date01/02/2019
Policy CategoryRenewable energy
Policy InstrumentBiofuel policy
DescriptionConsidered increasing the countrys mandatory biodiesel blending rates further in 2020, with the objective of raising domestic palm oil uptake, thereby helping to stabilize prices and reduce stocks of the commodity.
NotesFurther to the ongoing implementation of higher biodiesel blending mandates for road transport and industrial uses (see MPPU Dec.18), the Government is considering to raise mandatory blending rates further in 2020. The target is to elevate domestic uptake of crude palm oil for biodiesel by an additional 1.3 million tonnes per year, thereby helping to stabilize prices and reduce stocks of the commodity. The corresponding blending rates would be 20 percent for road transport and 10 percent for the industrial sector (compared to current rates of, respectively, 10 and 7 percent). To support higher consumption, the government is also exploring the possibility of setting up a biofuel stabilization fund, which would be used to keep local biodiesel prices competitive. The fund would be fed by levies collected on exports, similar to the scheme in place in Indonesia and to plans under consideration in Thailand.