BINTULU: Malaysia will go ahead with discussions on implementation of a higher ratio for its biofuel mandate, undeterred by falling oil prices.

Plantation Industries and Commodities Minister Datuk Seri Douglas Uggah Embas (pic) said the government is the midst of consulting all related stakeholders on the implementation of the B10 biodiesel programme, including automotive associations.

Asked if the B10 policy will be implemented this year, Uggah said: “God willing.”

He said the government has to take the long-term view for the industry and despite low oil prices, the government’s biodiesel mandate is to keep palm oil inventory in check.

This is crucial in view that Indonesia and Malaysia, the world’s top two producers of palm oil, are targeting crude palm oil production to reach 50 million tonnes per year by 2020, he said.

“We have to weigh the pros and cons. There may be a wider price variation compared to when oil prices were high, but we have to look at the long term,” Uggah told reporters after launching the B7 biodiesel programme for Sabah and Sarawak here on Saturday.

“The objective of the biodiesel programme is to increase palm oil domestically, but a lot of the time, overstock totalises that. One of the simplest way to curb that is to use it for biodiesel,” he added.

On the B7 biodiesel programme in Sabah and Sarawak that began last month, Uggah said it is expected to be completed by the end of this month. The programme sees the B7 blend — 7% of palm methyl ester with 93% petroleum diesel — supplied to 366 petrol stations in the two states.

This will utilise 138,000 tonnes of biodiesel, completing the targeted usage of 576,000 tonnes a year.

The entire programme will result in close to 667.6 million litres of savings in fossil fuel usage in a year.

However, according to the Malaysian Palm Oil Board, biodiesel exports in December 2014 had plunged to 614 tonnes from 20,000 tonnes in the previous month.

Earlier, Uggah also launched a biodiesel plant run by Sarawak Oil Palm Bhd’s subsidiary SOP Green Energy Sdn Bhd.

The facility, with an annual operating capacity of 100,000 tonnes, is the first biodiesel plant in Sarawak.

This article first appeared in The Edge Financial Daily, on January 19, 2015.